Saturday, March 21, 2009

Decline in Manufacturing?

I am not quite sure why I always hear people saying that the United States should manufacture more. I suppose now that I think of it, I hear it mostly from people like politicians with little real background in economics. Still, despite all the talk, manufacturing in America it is doing just fine. As this article points out:

“Manufacturing makes up about two-thirds of U.S. exports, and contributed more to G.D.P. growth over the last 20 years than any other sector of the U.S. economy,” said David Huether, chief economist for the National Association of Manufacturers in Washington. “Our share of global manufacturing output has remained steady at 20 to 23 percent over the past decade.”
With 5 percent of the world's population it really seems to me like we are doing more than our fair share of the manufacturing. What has changed is low skill factory workers have been replaced by robots. So there are a lot less jobs in the field. This is a good thing however as it frees up labor for other tasks. Just like when we reduced the percentage of the population that worked on farms this will ultimately improve the lives of most Americans.

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