Above is a chart of the ISM's manufacturing index. Notice it recently printed the highest number in ten years, indicating manufacturing is growing at strong rates. In fact, manufacturing was one of the economic sectors that pulled the U.S. out of the last recession.
Above is a chart of total manufacturing output of the top manufacturing countries in the world. Notice that we're still the largest manufacturer in the world.
So -- we still make plenty of things here in the U.S., indicating that the "death of US manufacturing" theme is 100% wrong.
The real issue is manufacturing employment, which has dramatically dropped:
Notice we're now at levels not seen since right after WWII. The real reason for this is a continued increase in productivity, as measured by output per worker:
2 comments:
Great post.
Quick question - productivity is important but do we know how much of the decline in manufacturing employment is due to automation?
The Sat NY Times Business Section had a pic of the new Hyundai plant in Alabama and it appeared the whole floor was filled robots doing the manufacturing. That wasn't true 30-40 yrs ago.
Capitalism holds that there is only one priority: efficient production. So within the bounds of that, having a high rate of growth in productivity is a benefit because more goods can be produced at a faster rate. That requires less labor input and so it reduces costs. Win all around.
The theory is that people who were making cars are now freed up to do something else. That through retraining people can become productive elsewhere in the economy. But the problem is that the growth of productivity is so rapid that we're destroying jobs faster than we can create them.
So when people talk about the death of US manufacturing, what we're really talking about is the death of US manufacturing employment, true. But who gives a damn about manufacturing in the abstract if it means nobody gets jobs from it?
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