We Should Always be Building in America.

How the gospel of globalization broke its promises—and left American workers behind.

In an ideal world, a wealthy nation like the United States might comfortably move beyond “dirty” or labor-intensive industries, focusing instead on high-tech innovation and services. In theory, outsourcing low-skill and even much high-skill manufacturing to countries with cheaper labor maximizes efficiency, boosts GDP, and offers consumers lower prices. But the reality on the ground paints a far darker picture. For millions of Americans—especially those without advanced degrees—manufacturing jobs have been a lifeline, often the only path to a stable, middle-class life. As the U.S. aggressively outsourced manufacturing in recent decades, many of these Americans were left with no comparable alternatives. The result has been devastated communities and a fraying social fabric. One stark example is Youngstown, Ohio: once a bustling steel town, Youngstown lost some 50,000 jobs within five years of its major mill closures in the late 1970s, and its population today has collapsed to under 65,000 (from a mid-century peak over three times higher).¹ Such “Rust Belt” stories are sadly common across the Midwest and Appalachia – entire regions left behind in the pursuit of cheap labor and higher corporate profits.

The Enduring Importance of Manufacturing for Americans

Economists often speak of a post-industrial society, but manufacturing still matters enormously in America – not only for GDP, but for innovation and livelihoods. The manufacturing sector remains a cornerstone of the economy, accounting for about 12% of U.S. gross domestic product and employing roughly 12 million workers (about 9% of the workforce). Crucially, it also contributes about 60% of U.S. R&D, underpinning the nation’s technological leadership. These broad statistics, however, mask an even deeper truth: manufacturing jobs have an outsized impact on communities. Each factory job often supports many other local jobs – by one rule of thumb, every steel mill position sustained about four additional jobs in the surrounding economy.² When a plant closes, the effect isn’t a contained layoff; it’s a local depression. Small businesses, from diners to hardware stores, lose customers. City budgets shrivel as the tax base erodes, forcing cuts to schools and services. In this way, a single factory closure can trigger a domino effect of decline.

Perhaps most importantly, manufacturing historically provided accessible, decent-paying work for Americans without college degrees. Even today, the majority of U.S. manufacturing workers have no education beyond high school.³ For generations, a high school graduate could walk into an assembly plant or steel mill and earn a solid, family-supporting wage – the kind of opportunity that is vanishing in our new service-driven economy. As one Youngstown resident recalled, the typical life path in that community was straightforward: finish high school, serve your country, then come home and get a job at the mill.⁴ That reliable path to the middle class has closed off for many. Yes, America’s economy has evolved, and new jobs have appeared – but a service-sector or retail job usually cannot match the pay, benefits, and long-term stability that manufacturing once provided. The decline of these jobs has thus torn a hole in the fabric of working-class America.

Who Really Benefits When We Outsource?

Proponents of unfettered globalization insist that outsourcing production to the lowest international bidder benefits everyone in the long run. It’s true that there are broad economic gains: U.S. corporations enjoy lower labor costs and higher profits, and consumers get a flood of cheaper imported goods. For instance, one analysis found that China’s integration into the world trading system has lowered U.S. consumer prices by roughly 1–1.5%, saving the average American household up to $850 a year in cheaper goods.⁵ From the vantage point of aggregate GDP or the stock market, outsourcing can indeed look like a winning formula.

But these aggregate benefits conceal a massive redistribution of costs and pain. The gains have been concentrated – accruing largely to multinational shareholders and to upper-income consumers – while the losses are localized and often permanent. When a factory moves to China or India, American workers lose their jobs and often their sense of purpose. The typical displaced factory worker in the Midwest doesn’t suddenly land a lucrative tech job or start a successful new business thanks to cheaper imported TVs and T-shirts. More commonly, they face long bouts of unemployment or take a big pay cut in whatever service job they can find – if they find one at all. Even years after offshoring-driven layoffs, research shows many affected workers never fully recover their prior income levels.⁶ Meanwhile, new jobs that do arise domestically tend to be lower paying, with shakier benefits and less security than the manufacturing jobs that vanished. As one detailed study concluded, even a decade after the early-2000s import surge from China (“the China Shock”), the impacted U.S. regions saw no easy adjustment. Workers who lost industrial jobs often ended up in worse-paying work or dropped out of the labor force; their communities struggled to replace the economic base that had been lost.⁷

So who really benefits from chasing the lowest wages globally? Primarily, those at the top: the owners of capital and the professional elites. They enjoy higher returns and cheaper inputs. The broader American middle gets a mixed bag – yes, slightly cheaper consumer goods, but at the cost of diminished earning opportunities and hollowed-out hometowns for many. Even other countries’ workers may not truly “win” in the long run, as the global race-to-the-bottom pushes factories from one low-wage locale to the next (China itself has started losing factories to places like Vietnam as labor costs rise). What’s left behind in the American context are shuttered factories and broken promises.

There’s also a moral question: What obligations do a nation and its businesses have to their own people? In the mid-20th century, major U.S. employers often saw themselves as having some duty to provide stable careers for American workers. That ethos has been replaced by a fixation on quarterly earnings and cost-cutting. Corporate executives scour the globe for the cheapest labor and laxest regulations, and government policy has largely encouraged this, treating workers as an afterthought. As one laid-off Midwestern steelworker bitterly observed, companies that he and his co-workers had devoted their lives to “[were] letting the people of America down”. Those workers felt betrayed – and not without reason. Decades of offshoring and plant closures have eroded the implicit social contract that if you work hard and are loyal to your employer, you can earn a decent living. Instead, many loyal blue-collar workers have been cast aside as “economically expendable” in the relentless pursuit of efficiency. Decisions by corporate and political leaders to prioritize stock prices and GDP growth above all else have, in aggregate, sacrificed the well-being of entire communities. We have to ask: is a marginal bump in profit or a slight drop in consumer prices worth the devastation of an American town? For too long, the prevailing philosophy answered “yes.”

The Cultural and Social Costs of Deindustrialization

The damage from outsourcing and deindustrialization in the U.S. is not merely economic; it is social, cultural, and generational. A manufacturing plant is more than just a workplace – it is often a source of community identity and pride. When that plant shuts its doors, the effects ripple outward in ways that are hard to quantify but painfully real. Sociologists and local leaders in the Rust Belt have catalogued the social costs in affected towns: rising unemployment and poverty, population loss as young people flee, and an increase in a host of social ills – substance abuse, family breakdown, and even suicide and crime rates tend to climb in the wake of mass layoffs. In places like Ohio, Michigan, West Virginia, and Pennsylvania, the decline of manufacturing has coincided with an opioid addiction crisis and a surge in “deaths of despair” among working-class Americans. This is not a simple coincidence. A seminal study by economists found that regions hit hardest by import competition from China experienced significantly higher rates of drug overdoses and other mortality as the local economic malaise set in.⁸ In those same trade-ravaged communities, children were more likely to grow up in poverty and in single-parent households, as the stress of job losses strained families to the breaking point. In short, when we talk about outsourcing’s winners and losers, we’re talking about much more than spreadsheets – we’re talking about the shredding of the social fabric in countless American towns.

Culture, in the anthropological sense, also suffers. In many once-prosperous factory cities, the closing of the mills or factories meant the loss of a shared way of life. Take again the example of Youngstown: for generations, the rhythms of daily life – the whistle of the mill signaling lunchtime, the glow of the furnaces in the night sky – defined the community’s identity. Multiple generations of the same family might have worked on the factory floor; neighborhoods were built around the plant; local charities, sports leagues, even churches thrived with support from blue-collar paychecks. When that economic base collapses, the sense of purpose and cohesion can collapse with it. The community’s “sense of competence,” as one report put it, is deeply undermined, creating a cycle of struggle and failure that is difficult to escape. Pride in one’s work and town gives way to despair and disillusionment. Indeed, many deindustrialized communities develop a kind of collective trauma – visible in everything from the dilapidated Main Streets to the cynical, angry turn in local politics.

And speaking of politics: the cultural fallout from outsourcing has arguably reshaped our national politics in the 21st century. Voters in the hardest-hit manufacturing regions have swung towards anti-establishment, nationalist candidates who promise to bring back jobs and restore lost dignity. Political analysts have noted that areas most exposed to the China trade shock disproportionately shifted toward the populist right in recent elections.⁹ It’s not hard to understand why. People who feel abandoned by bipartisan elites’ embrace of free trade and globalization are demanding a change of course, even flirting with “somewhat nativist” ideas in hopes of reclaiming a semblance of the stability that was lost. In this way, the outsourcing frenzy didn’t just impoverish some communities – it also frayed the cultural and political unity of the nation, pitting the “left-behind” heartland against the cosmopolitan coastal centers that benefited more from globalization. The social contract has not only been broken; the resulting distrust and division are a wound we are still struggling to heal.

The “GDP at All Costs” Mantra – And Its Blind Spots

Why did the United States, especially its leaders on the right, allow things to reach this point? A big part of the answer lies in an economic ideology that took hold in the late 20th century – one that treats GDP growth as the ultimate goal, trumping all other considerations. For decades, Republicans and mainstream conservatives (joined often by pro-business Democrats) have extolled the virtues of unfettered markets, free trade, and relentless efficiency. In this view, often inspired by classical economists like Adam Smith, commerce is an absolute good: voluntary trade is “always advantageous,” as Smith wrote.¹⁰ By this logic, opening our markets and chasing global supply chains would increase overall wealth – and indeed, U.S. GDP and corporate profits did rise dramatically in the era of globalization. Defenders of this approach argue that cheaper imports and higher efficiency benefit everyone by making the economic pie larger. Any job losses or local hardships, they said, would be temporary – creative destruction at work – as the economy shifted workers into newer, better opportunities.

For a while, this “rising tide lifts all boats” narrative held sway in Washington. The American right especially embraced it as doctrine: being “pro-growth” and “pro-free trade” became synonymous with patriotism and progress. Skeptics who worried about factory closures or trade deficits were dismissed as protectionist or short-sighted. During the 1980s and 1990s, the U.S. forged trade deals and admitted China into the World Trade Organization, pursuing a vision of a liberalized global economy. The guiding star was always GDP – if the aggregate economy expanded, it was assumed Americans as a whole must be better off.

In hindsight, that philosophy was myopic. It failed to account for distribution and for the lived experience of millions. Yes, GDP grew – but who reaped the gains? Since the 1970s, U.S. productivity and GDP have risen far faster than median wages or family incomes, indicating that growth has not translated into broad-based prosperity. The “GDP first” mantra also ignored what the numbers do not measure. A spreadsheet will show the efficiency gained by outsourcing, but not the despair of a 50-year-old machinist in Ohio who can’t find work after his plant moved overseas. It will show an uptick in corporate earnings, but not the blighted homes and broken communities left behind. In short, what gets measured (profits, output, stock prices) crowded out what truly matters (people, communities, the dignity of work).

Many conservative thinkers and economists persisted in arguing that factory job losses were simply a natural evolution from manufacturing to services – essentially saying to the Rust Belt, “This is fine. Adapt.” They leaned on the concept of creative destruction: the idea that the old must give way to more productive new industries. But in case after case, the promised new opportunities never fully materialized for displaced workers. You can’t tell a former assembly-line worker in Michigan to just become a software engineer or a biotech researcher; the economy doesn’t work like that in practice, especially without significant support and retraining that have been lacking. As one analysis bluntly noted, deindustrialization in America has not reliably generated good new jobs to replace those lost – instead, it has often just created low-pay service jobs or no jobs at all. The blind pursuit of GDP growth glossed over these hard truths.

It’s worth noting that even some of the economic arguments for unrestrained outsourcing have started to crumble. For years, conventional wisdom held that automation (robots, technology) was responsible for most manufacturing job losses, not trade. Indeed, one often-cited study attributed as much as 88% of factory job decline in the 2000s to productivity gains from automation, and only around 13% to import competition.¹¹ If that were true, outsourcing wasn’t really the issue – technology was. But more recent research paints a far more nuanced picture. Analysts have pointed out that the 88% figure is likely an overestimate, skewed by how productivity is measured in certain industries. In fact, sectors like electronics showed enormous productivity on paper largely due to improvements in product quality (e.g. faster computers), not because factories became super-automated. Meanwhile, peer-reviewed studies of the 2000s trade shock with China have found very real and sizable employment impacts from imports, including 2 million or more U.S. jobs lost.¹² And tellingly, Germany – a nation with high wages and lots of automation – lost only about 5% of its manufacturing jobs from 1997 to 2013, while the U.S. lost 31% in that period. The difference? Germany maintained a trade surplus and kept industrial policies that supported its manufacturers. This comparison undercuts the idea that job loss was inevitable or solely due to robots – policy choices and trade decisions clearly mattered. Unfortunately, in the U.S., the dominant policy for too long was to prioritize abstract economic growth and let the chips fall where they may for workers.

The American right, in particular, needs to reckon with how its free-market absolutism and GDP-focused mindset have betrayed its own constituents. After all, conservatives traditionally speak of patriotism, national strength, and “leaving no one behind.” Yet under the spell of neoliberal economics, many on the right turned a blind eye as American factory towns were hollowed out. So long as the stock market was up and GDP ticking higher, the human costs were rationalized as “market forces” or even shrugged off as the fault of workers being “unskilled” or unwilling to move. This approach has proven shortsighted and politically self-destructive. Those left-behind voters have understandably rebelled, demanding that their leaders put American workers first for a change – even if that means questioning free trade dogmas.

Rebuilding an Economy That Puts Citizens First

If there is a silver lining to this painful story, it’s that the conversation is finally changing. Across the political spectrum – and especially in what some call a new pro-worker right – there is a growing recognition that GDP growth alone cannot be the sole compass for policy. An economy is not truly successful if it is booming on paper but leaving large swaths of its people in despair. The measure of a nation’s economic health must include the well-being of its working class and the vitality of its communities. In practical terms, that means rethinking policies that treat labor as just another cost input and recognizing that offshoring everything to save a buck can inflict greater costs down the line. It means considering targeted industrial policies to revitalize manufacturing in the U.S., whether through smarter trade deals, incentives for domestic production, or investment in workforce training for the kinds of modern factory jobs that can sustain a family.

Critics will argue that this sounds like nostalgia or protectionism. But wanting a solid manufacturing base is not about turning back the clock so much as maintaining balance and resilience. The COVID-19 pandemic underscored the dangers of over-reliance on foreign supply chains for essential goods. There is a strategic case, as well as a moral one, for rebuilding capacity at home. More profoundly, providing meaningful work for citizens is part of the social contract. A republic that doesn’t offer broad-based economic opportunity risks decay of its democratic foundations. Look again at those Rust Belt communities: their economic void fueled social troubles and extremist politics – outcomes that affect us all, not just those who lost jobs. In that sense, outsourcing American jobs to the lowest bidder wasn’t just an economic choice; it was a social experiment with disastrous results for our cohesion and civic trust.

Engaging with the critics of this view, one must acknowledge that globalization and technology are complex forces. We cannot (and should not) bring back every lost factory or seal ourselves off from the world. But the pendulum swung too far toward an idealized global market at the expense of our neighbors. Course correction is possible. We can aim for trade that is fair – that doesn’t ask American workers to compete against exploitative wages or nonexistent environmental standards abroad. We can prioritize “smart growth” over raw GDP – growth that comes from innovation and productivity gains at home, not just shifting work to cheaper locales. And we can invest in our own people, so that when new technologies do displace old jobs, workers are prepared and supported to move into the next opportunity, rather than left to fend for themselves.

Ultimately, this is about what kind of country we want to be. Are we just an economy, or are we a nation with a shared destiny? If we are the latter, then we owe some loyalty to our fellow citizens who build and sustain that nation through their labor. For years, those ordinary Americans were told that their jobs were simply the cost of doing business in a global era – that their pain was inevitable and even worth it for the greater good (defined in terms of GDP). That was a lie, or at best a gross half-truth. The greater good cannot be measured solely in dollars. It must be measured in the dignity of work, the strength of families, and the health of communities. By that measure, we have paid dearly for the gospel of outsourcing at all costs.

It’s time to remember that economic policy is not a game of abstract numbers – it’s a covenant with the citizens of the nation. The USA may never again dominate global manufacturing as it did in 1950, and indeed not every low-skill factory job can or should be saved. But abandoning an entire class of jobs and the people who relied on them was a choice – one that we can choose not to repeat going forward. As we strive to restore a sense of ordered liberty in our society, we must balance the freedom of the marketplace with the duty we have to one another. The true measure of our economy’s success should be its ability to provide fulfilling, productive livelihoods for the many, not just endless wealth accumulation for the few. In a more perfect America, no hardworking citizen will be treated as a disposable line item. Achieving that ideal will require challenging the old GDP-at-all-costs mantra and remembering that an economy exists to serve the people – not the other way around.

1. https://beltmag.com/40th-anniversary-youngstowns-black-monday-oral-history/

2. https://beltmag.com/40th-anniversary-youngstowns-black-monday-oral-history/

3. https://fivethirtyeight.com/features/dont-blame-a-skills-gap-for-lack-of-hiring-in-manufacturing/

4. https://beltmag.com/40th-anniversary-youngstowns-black-monday-oral-history/

5. https://www.uschina.org/articles/understanding-the-us-china-trade-relationship/

6. https://equitablegrowth.org/how-the-china-trade-shock-impacted-u-s-manufacturing-workers-and-labor-markets-and-the-consequences-for-u-s-politics/

7. https://beltmag.com/40th-anniversary-youngstowns-black-monday-oral-history/

8. https://equitablegrowth.org/how-the-china-trade-shock-impacted-u-s-manufacturing-workers-and-labor-markets-and-the-consequences-for-u-s-politics/

9. https://equitablegrowth.org/how-the-china-trade-shock-impacted-u-s-manufacturing-workers-and-labor-markets-and-the-consequences-for-u-s-politics/

10. https://www.cato.org/publications/the-conservative-case-for-globalization

11. https://www.washingtonpost.com/politics/2019/10/17/are-jobs-lost-due-bad-trade-policy-or-automation/

12. https://www.epi.org/publication/high-wages-arent-to-blame-for-the-decline-of-u-s-manufacturing/