Everyone has heard that America’s manufacturing sector is deteriorating. World competitors like China and Taiwan offer faster production times at lower costs, and so the U.S. manufacturing business has significantly dropped over the past 50 years. This transformation in the economy has led many Americans to find alternative careers; it has contributed to the rise in professional service jobs and has sparked the recent trend of many middle-aged Americans going back to school to earn more advanced college degrees.

Myths About U.S. Manufacturing Sector

The media has depicted a crisis in the American manufacturing industry. Though the manufacturing industry has significantly shrunk in the U.S., no one can deny that the manufacturing business is still very strong. Manufacturing generates over 1.5 trillion dollars (more than 10 percent of the GDP) to the U.S. economy every year, and it employs over 17 million citizens. According to the United Nations Statistic Division, the U.S. produces more manufactured products than any other country in the world. The U.S. makes more than 20 percent of global manufactured products, compared to China’s 15 percent (second place) and Japan’s 12 percent (third place).

The decline in Manufacturing: A Transition

According to the Bureau of Labor Statistics, manufacturing jobs accounted for more than 30 percent of the U.S. workforce in 1950. As of 2002, that number had dropped below 15 percent. Since 2002, the American manufacturing industry has continued to decline. In fact, over 2 million people have been laid off since then, which represents over 10 percent of the manufacturing workforce. Foreign countries have more liberal working regulations and no worker unions, so the cost of labor and production in foreign countries is much lower. Hence, foreign countries can offer the same quality goods at lower prices than many of the U.S. factories. Since 1992, over 1 million manufacturing positions have been transferred from the U.S. to foreign countries.

Effects of Manufacturing Changes

Barbara Hagenbaugh published an article in USA Today that surveyed and compared various American industries over time. In 1960, the country had just over 1 million healthcare workers, but now it has nearly 15 million healthcare workers. Similarly, the business service sector has grown more than 15 times in the past 50 years, and the educational career opportunities have grown more than 4 times. In essence, where manufacturing jobs have declined, service careers have expanded. People are going to school longer to get college degrees, as professional service industries (i.e., healthcare, education) continue to exponentially grow.

The Car Manufacturing Industry

A good example of how the economic transition has effected manufacturing in the U.S. is the car manufacturing business. More people are gaining advanced degrees, so better assembly lines are being created. Now cars are being manufactured with less and less assembly line employees, however, more technical jobs have been created to facilitate and operate machinery. We can see the effects of the decline in manufacturing, as the number of car manufacturing employees dropped from 1.2 million to below 800,000 in 2009.

Resources

• www.bls.gov/iag/tgs/iag31-33.htm
• www.nam.org
• https://usatoday30.usatoday.com
• www.cepr.org
• www.bls.gov/iag/tgs/iagauto.htm