Nice piece from Marc Chandler of Brown Brothers who looks more closely at the manufacturing employment and output numbers. This is the hot topic that so many have been discussing during this recession. Our trading partners have taken all of the good jobs away from the US. We do not manufacture anything in this country. The answer is wrong.
We have a greater share of global manufacturing than ever before. China has been a significant gainer but the US is still a market leader and with an increasing share. It is true that manufacturing is down as a percentage of total US output. It is not as important to the overall US economy. The problem is that productivity has increased significantly. We are producing more with less workers. This is a positive to economic growth. We are using capital and labor to produce more with less. If you increase productivity, there will be less jobs and this may be the key driver of the declines in manufacturing employment.
We have a greater share of global manufacturing than ever before. China has been a significant gainer but the US is still a market leader and with an increasing share. It is true that manufacturing is down as a percentage of total US output. It is not as important to the overall US economy. The problem is that productivity has increased significantly. We are producing more with less workers. This is a positive to economic growth. We are using capital and labor to produce more with less. If you increase productivity, there will be less jobs and this may be the key driver of the declines in manufacturing employment.
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