Monday, August 23, 2010

A Lie: US Manufacturing is in decline!! Why are we constantly told this? Let the truth set you free...

There has been alot in the news lately about the decline of American manufacturing, considered the backbone of our economy. In terms of jobs in manufacturing there has definitely been a decline in the numbers of people working in this sector. The first graph below shows this long term trend:

 Business Insider

Please note that this decline has occured in good times and bad (the bad are recessions marked by the gray bars).  This second graph below shows a more recent change in manufacturing output relative to jobs in manufacturing: 
Carpe Diem

What is going on?  Numerically we are absolutely producing more "stuff" (look at the BLUE line) BUT we are doing it with fewer workers (RED line).  How can that be? Are workers more efficient? Do they have access to,and employ more technology and labor saving devices/techniques than workers in the past?  The next graph seems to bear this out:
Cafe Hayek
Has there been a silent (silent or people not paying attention)  revolution in manufacturing, and technology has made many workers obsolete? It could be said, in terms of manufacturing jobs, the US is in decline, BUT in overall output of goods we are at historical highs, so US manufacturing is VERY healthy, right? Can't have it both ways.  You make the call...What do you think??
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