Sunday, November 13, 2011

America Doesn’t Make Anything Anymore: Wrong! Manufacturing Stronger Than Ever

In the mistaken belief that outsourcing is a major factor contributing to America’s loss of manufacturing jobs, Congress continues to push bills that limit manufacturers’ ability to expand abroad. Combined this with the hyper-bolic “America Does Not Make Anything Anymore,” and legislators feel compelled to offer bills restricting manufacturing firms’ flexibility to expand geographically. This legislation not only breeds uncertainty, but chills U.S. economic growth.

In 1948, the nation’s gross domestic product (GDP) in manufacturing was $70.1 billion. By 2010, U.S. manufacturing GDP had expanded to $1.8 trillion for an annual growth of 5.3 percent. During this same period of time U.S. manufacturing lost nearly three million jobs. Thus between 1948 and 2010, each worker’s productivity skyrocketed with GDP per worker expanding from approximately $5,000 to $145,000 over the 62 year period.

If manufacturing GDP per worker had grown at the slower rate of the rest of the economy, U.S. manufacturing employment would have been 5.8 million higher in 2010. Thus, the real culprit explaining U.S. manufacturing employment declines has been soaring productivity driven by vastly improving technology and processes.

As a result, critics that wish to blame out-sourcing for pullbacks in U.S. manufacturing employment should more properly turn their scorn to rising productivity which has generated ever improving living standards for Americans.

Only Luddites and hyperbolic politicians would limit the freedom of manufacturers to choose the levels of capital, labor and outsourcing that are most appropriate for their firms. American manufacturing productivity growth, much like agriculture before it, has been a driver of higher U.S. living standards. Ernie Goss.


Jeff Malone said...

What are we manufacturing in the US?

Ernie Goss said...

We are producing autos, computers, and all other products with high human capital content. We are not manufacturing products that can be produced by unskilled, lower wage workers.

Sidd said...

Its time the average American realized that the only way for them to save their jobs and thus their economy is to:
1. Buy American, preferably local.
2. Buy from the small neighbourhood store instead of the large corporations.
There is absolutely no other solution. You might save a couple of bucks buying 'made in china', but in the long run you are going to end up exporting your jobs to them.
Buying from large corporations means you are most probably buying stuff made elsewhere, at the cost of American jobs.
There are many websites to point you to 'made in America' on google.

Anonymous said...

lol sure, all you nigs are on crack, we don't manufacture we assemble, there's a difference, manutards

MJK said...

Thanks for clarity regarding manufacturing in the U.S. Whether curmudgeons like it or not, the U.S. is still the strongest economy in the world and still the largest manufacturer to the world. Yes, we have lost too many jobs, businesses and manufacturing facilities. But we've lost them due to bad management, arrogance and narrow thinking of the manufacturers and their management teams. Companies with management teams that recognized that there is competition in the world and that their company needs to compete with good products and efficient processes have done amazingly well. There is no reason we cannot recapture manufacturing growth if we manage by intelligence as oppose to arrogance.

Anonymous said...

Move to China. It is the new land of opportunity. America is a waste land. Why pledge allegiance to something with No future? Go EAST, young man!

Anonymous said...

seems like having babies and living off the state is the new business of america.