Building Blue-Collar … Burgers?

Fast food, burger and fries AP

Manufacturing jobs making things like airplane engines, cars and farm equipment are disappearing from the American economy.

Or are they? According to a White House report, new manufacturing jobs might be as close as your nearest drive-thru.

The annual Economic Report of the President has already stirred controversy by suggesting the loss of U.S. jobs overseas might be beneficial, and predicting that a whopping 2.6 million jobs will be created in the country this year.

As first reported by The New York Times, the fast food issue is taken up on page 73 of the lengthy report in a special box headlined "What is manufacturing?"

"The definition of a manufactured product," the box reads, "is not straightforward."

"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" it asks.

Manufacturing is defined by the Census Bureau as work involving employees who are "engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products."

But, the president's report notes, even the Census Bureau has acknowledged that its definition "can be somewhat blurry," with bakeries, candy stores, custom tailors and tire retreading services considered manufacturing.

"Mixing water and concentrate to produce soft drinks is classified as manufacturing," the president's report reads. "However, if that activity is performed at a snack bar, it is considered a service."

The report does not recommend that burger-flippers be counted alongside factory workers.

Instead, it concludes that the fuzziness of the manufacturing definition is problematic, because policies — like, for example, a tax credit for manufacturers — may miss their target if the definition is overly broad or narrow.

But reclassifying fast food workers as manufacturing employees could have other advantages for the administration.

It would offset somewhat the ongoing loss of manufacturing jobs in national employment statistics. Since the month President Bush was inaugurated, the economy has lost about 2.7 million manufacturing jobs, according to the federal Bureau of Labor Statistics. That continues a long-term trend.

And the move would make the growth in service sector jobs, some of which pay low wages, more appealing. According to government figures, since January 2001 the economy has generated more than 600,000 new service-providing jobs.

The annual economic report — most of which consists of charts and statistics — has been the focus of unusual scrutiny this year, perhaps reflecting the presidential campaign and concern about the lack of job creation despite an ongoing recovery.

The report first touched off a furor with a statement regarding the "outsourcing" of U.S. jobs overseas, where wages are lower.

"When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically. This allows the United States to devote its resources to more productive purposes," the report read.

The statement, which reflects standard economic theory about the efficiencies of trade, was denounced by Democrats and Republicans alike.

"These people, what planet do they live on?" asked Democratic presidential candidate and North Carolina Sen. John Edwards.

Even Republican House Speaker Dennis Hastert wrote to the White House protesting at the claim.

The president's top economic adviser and the lead author of the report, Gregory Mankiw, replied to Hastert that "My lack of clarity left the wrong impression that I praised the loss of U.S. jobs."

Critics of the White House also seized on a chart in the report that suggested the administration expects 2.6 million new jobs by the end of the year.

"I've got a feeling this report was prepared by the same people who brought us the intelligence on Iraq," said Democratic presidential candidate John Kerry, a Massachusetts senator.

The White House insisted the figure was just an estimate.
  • Jarrett Murphy

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