American Manufacturing: The Picture Is Really Not So Bleak

Republicans and others who wish to impugn President Barack Obama and blame him for everything claim that he is responsible for loss of American jobs, especially manufacturing jobs. We see pictures of shuttered factories and impoverished areas in "Rust Belt" cities, and hear much about the rate of unemployment.

The peak year for employment in American manufacturing was 1979. Jobs declined continually since then—up until 2009, when they actually began to increase--and this turnaround point was, of course, during Obama's presidency.

Not that Obama gets all the credit for any increase, any more than he deserves the blame for 30 years of decline.

But let's look at some facts. The current number manufacturing jobs is quite a bit below its all-time peak; but, on the other hand, the value of American manufacturing has increased.

It's not simply a story of outsourcing of American jobs to China, Mexico, and other countries where labor is cheaper (although I have tended to feel that the American worker has priced himself out of the world labor market). Greater efficiency—automation, use of industrial robots, and so forth—has meant that the production of American factories can be achieved with fewer workers. So, if you want to, blame the robots for declining unemployment in American manufacturing.

But this means that American ingenuity has permitted goods to be produced with less labor—and thus lower labor cost, which of course is important in world competitiveness.

So, the situation of American manufacturing is much more salubrious than some people would have us believe.

Copyright © 2012 by Richard Stein