By John Norton, Contributing Writer
Some argue that
United States manufacturing power peaked during World War II. Demands of the war created what economists call a wartime economy. Many fear that this golden age has ended, though, and that the days of Americans building ships, cars, and refrigerators are over.
Continued trade deficits and globalized credit markets give the impression that US manufacturing is well past its peak. To the contrary, recent trends in corporate behavior reaffirm consistently positive manufacturing data that US manufacturing is still the leading producer in the world.
Last week the Wall Street Journal reported better than expected domestic capital expenditures, as US companies showed signs of shifting production and spending back home due to rising overseas costs. Carlisle Company, manufacturer of tires, insulation, and restaurant supplies, plans to bring tire production back to the US from China, citing rising wages and transportation cost. Furthermore, the post-recession auto industry is profitable and expanding once more.
Granted, the US manufacturing industry has changed dramatically over the last decade. According to the Bureau of Labor Statistics, manufacturing employment decreased from 17 million in 1997 to just over 14 million in 2007. Furthermore, the manufacturing sector was not immune to the rise in unemployment during the Great Recession from 2007-2008. With an increasingly global economy, inexpensive labor abroad will undoubtedly result in fewer manufacturing jobs at home, due to the laws of comparative advantage.
Still, the manufacturing might of the United States continues to out-do the rest of the world, producing 21 percent of manufactured goods in 2009 compared to China’s 15 percent according to the Statistics Division of the United Nations. Taken by itself the US manufacturing sector would be the 9th largest economy in the world.
The misperception of the state of US manufacturing stems from a failure to distinguish manufacturing employment from manufacturing production. Much complaint comes from the loss of manufacturing jobs of Americans who have specialized in no longer viable skills.
However, as recent surges in domestic employment reaffirm, manufacturing jobs are still available for the highly skilled and relatively expensive American labor force. The United States remains, as it has since World War II, the worldwide leader in manufacturing production and the highly skilled and innovative American labor force continues to drive that production.
John Norton is a senior Economics and Finance major at the University of Dallas and is a contributing writer for GenWhyPress.
