Manufacturing output in the U.S. is at an all time high

Actually, it’s pretty much always been at an all time high.

That is – I think – a big part of the reason so many pols insist on talking about bringing back manufacturing jobs. Here is President Obama at 2013 SOTU talking about manufacturing:

Our first priority is making America a magnet for new jobs and manufacturing.

After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. After locating plants in other countries like China, Intel is opening its most advanced plant right here at home. And this year, Apple will start making Macs in America again.

Leaving aside the president’s weird fixed pie allusions, It really is only the jobs that have been disappearing, not the output (as Obama is well aware).

Here is manufacturing output and manufacturing employment in the United States since 1975. Though the start end years for the graph were already chosen for me, I think 1975 is a good year to start because it’s around that time everyone points to as the beginning of the decline in U.S. manufacturing:

Man output versus jobs since 1975

Also worth busting before I go up to eat breakfast: the notion that the United States used to be all about manufacturing, until the 1970s, when everything started going overseas. Relatively speaking, this just ain’t so. Manufacturing has NEVER been the largest sector of the economy, not by output, not by employment.

new one

Sorry, I guess output in manufacturing accounted for a plurality of total output for a few (20ish) years in the late 19th century. But, even then, 59 percent of output was services and agriculture.

And here is private sector employment, only from 1948, because that’s what I found when I googled this all up:

another new one

I know that’s a lot of weird start and end dates to deal with. If you could combine all the data (which you can), you would get a picture of the U.S. economy that looks something like this: manufacturing output has always been on the rise, and it continues to rise. For a long time, output increased faster than gains from productivity, so that employment in the manufacturing sector continued to rise. Starting around the mid-1970s, U.S. manufacturing productivity really began to take off. The economy hasn’t just learned to produce more with less at the margins. The whole industrial base has shifted, so that more is produced with less total labor, not just less additional labor. As a result, manufacturing jobs have and will disappear, both in total numbers and as a share of all jobs.

Except for forcing us back to the stone age, there isn’t really anything the government can do to change that. Even if you accept for argument sake that government lead forays into manufacturing R&D are the best way to go to spur economic growth – again, POTUS from SOTU:

Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything. There’s no reason this can’t happen in other towns. So tonight, I’m announcing the launch of three more of these manufacturing hubs, where businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs. And I ask this Congress to help create a network of fifteen of these hubs and guarantee that the next revolution in manufacturing is Made in America.

 – the country just isn’t going to see many new net manufacturing jobs for a long time. Marginal additions to high-tech manufacturing employment from innovation will be more than balanced by the disappearance of manufacturing jobs in older sectors of the economy that introduce high-tech processes to increase efficiency.

UPDATE 3/9/13: According to this website, at least as late as 2009, THE UNITED STATES REMAINED THE WORLD’S LARGEST MANUFACTURER:

The United Nations Statistics Division compiles global data on manufacturing value-added, and its most recent data shows the United States continues to lead, with close to 21 percent of all global manufacturing output in terms of constant dollars (real manufacturing value-added in 2009). China is the second largest, with about 15 percent of global manufacturing. No official data are available for 2010 yet, but given the gap between the top two manufacturers, China will not have surpassed the United States in 2010.

21 percent of all global manufacturing output with only about 4.2 percent of population. No bad. Not bad at all.

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