Creation of Twenty Million Manufacturing Jobs
Posted on May 26, 2021
The United States has lost over twenty million manufacturing jobs to other competitive industrial countries because they produce goods at a lower price. Improving U.S. competition to bring back those jobs, the nation’s production costs must be lower. The single cost factor U.S. companies have but foreign companies do not have are employee benefits. All countries provide some social services, of Social Security and Healthcare, the top 35 industrial countries provide universal health care coverage. The difference is how the costs of the services are covered. The other countries pay through a company and personal income tax system while the United States has the employers pay for the benefits.
An examination of the U.S. Gross Domestic Product (GDP) for the past forty years shows a direct correlation of the loss of manufacturing revenues as healthcare revenues increased. The illustrated chart shows the GDP percentages of the Manufacturing Industry and the Healthcare Industry over forty years. As health care costs increased, the manufacturing industry lost companies and jobs.
The solution is simple but extreme. The U.S. must eliminate a system where employers pay for all social services and adopt a revenue system where corporate and personal income taxes pay for the social benefits. An income tax is not a production cost. This system will create a financial revenue environment that supports a strong manufacturing industry. Shifting the costs of employee benefits lowers the breakeven point of the manufactured goods and makes a more competitive price. The chart below illustrates the elimination of the costs of social services.
Moving to a Single-payer healthcare system will save two trillion dollars. The revenues now paid by the employers for social benefits will be paid to the employees. A flat tax of three percent will increase corporate income taxes, and personal income taxes will cover the lost FICA tax. The revenue numbers and tax increase will be in the ranges as follows: Employees will see an increase in their pay of about four trillion dollars, the FICA taxes will be eliminated and replaced by a 3% increase flat tax across all tax revenue levels to cover the costs of the Social Security and Healthcare services, initially, the employers and employees will see an increase of disposable income of two trillion dollars, which is the savings realized of going to a universal health care system, the increase of the salaries given to the employees will be paid every year. With the rise of new manufacturing companies and the expansion of existing companies, the twenty million lost employees will be rehired. With the rise of manufactured goods in the United States, the trade deficit will be eliminated.
The financial well-being of the nation is in the hands of the people. I hope the country adopts this proposal and we bring manufacturing jobs back to the United States.