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Interestingly, the US manufacturing output today is the greatest it has ever been. Jobs get lost mostly due to automation. This a good thing: Do more with less

Interestingly, the US manufacturing output today is the greatest it has ever been. Jobs get lost mostly due to automation. This a good thing: Do more with less and focus on higher-value activities.

matwood 6y ago
Yep. Even if the US brought manufacturing back (whatever that means since output is higher than ever), the jobs would not come back.
twobitshifter 6y ago
This belief, that US manufacturing is doing better than ever and job losses are due to automation is false and based on statistics that overvalue microprocessors. Here’s a great paper on that with an excerpt from the introduction. http://www.upjohn.org/MEG/papers/Measuring%20Mfg_Houseman_Bartik_Sturgeon.pdf http://www.upjohn.org/MEG/papers/Measuring%20Mfg_Houseman_Ba... First, it is generally unknown that the robust growth in real GDP in the manufacturing sector is largely driven by one industry: computers and electronic products. For most of manufacturing, real output growth has been relatively weak or negative.5 When the computer and electronic products industry is excluded, real GDP growth in manufacturing falls by two- thirds between 1997 and 2007, the decade leading up to the Great Recession. In 2011, without computer-related industries, real GDP in the manufacturing sector was actually lower than in 2000. The computer and electronic products industry similarly drives real manufacturing output growth in most U.S. states. Real manufacturing GDP growth between 1997 and 2007 falls by more than half in a majority of states and by at least 25 percent in all but 10 states. Furthermore, the extraordinary growth in real value added and accompanying productivity growth in the computer and electronic products industry results largely from prices for two sets of products: computers and semiconductors that, when adjusted for quality improvements, are falling rapidly. These quality improvements, in turn, largely reflect better design and increases in the density of electronic circuitry. While changes in manufacturing processes are necessary to produce these improved designs, the production processes in computer and semiconductors have been automated for many decades. Thus, the high growth in real value added and productivity in the computer and semiconductor product segments, and by extension the manufacturing sector, reflects, to a large degree, product improvements from research and development rather than automation of the production process. Unlike productivity resulting from automation, which involves the substitution of capital for labor, productivity arising from improvements to product design and production processes does not, in and of itself, cause job losses. Ironically, the extraordinary growth in real value added and productivity in the computer and semiconductor industries does not signal the competitiveness of the United States as a manufacturing location for these products. Drawing on new market research data, we provide evidence of the shift in the location of computer and semiconductor manufacturing to Asia. Few personal computers and servers are assembled in the United States today, and consequently the United States runs a large trade deficit for these products. The United States retains a significant presence in semiconductor wafer fabrication, but over the last decade manufacturing capacity has expanded much more rapidly in Asia, and, as a result, U.S. market share has declined rapidly. Although many of the computers and semiconductors produced overseas are still designed in the United States, the shift in the location of production has important implications for the number and types of U.S. jobs.
legolas2412 6y ago
I've seen this argument, but i never understand the people making this argument. China is called the factory of the world, and it is undeniable that a lot of chinese labor force works in manufacturing. So if jobs weren't lost due to outsourcing, then what are these industries and jobs doing in china? I think the standard response is that usa's manufacturing output has increased, but comparing 1970s manufacturing output to 2020 isn't at all fair. You need to consider the alternate world, where globalism wasn't this big a force, and most manufacturing stayed in usa. There would be even more manufacturing in USA, so globalism did lead to job loss.

Interestingly, the US manufacturing output today is the greatest it has ever been. Jobs get lost mostly due to automation. This a good thing: Do more with less and focus on higher-value activities.

matwood 6y ago

Yep. Even if the US brought manufacturing back (whatever that means since output is higher than ever), the jobs would not come back.

twobitshifter 6y ago

This belief, that US manufacturing is doing better than ever and job losses are due to automation is false and based on statistics that overvalue microprocessors. Here’s a great paper on that with an excerpt from the introduction. http://www.upjohn.org/MEG/papers/Measuring%20Mfg_Houseman_Bartik_Sturgeon.pdf http://www.upjohn.org/MEG/papers/Measuring%20Mfg_Houseman_Ba... First, it is generally unknown that the robust growth in real GDP in the manufacturing sector is largely driven by one industry: computers and electronic products. For most of manufacturing, real output growth has been relatively weak or negative.5 When the computer and electronic products industry is excluded, real GDP growth in manufacturing falls by two- thirds between 1997 and 2007, the decade leading up to the Great Recession. In 2011, without computer-related industries, real GDP in the manufacturing sector was actually lower than in 2000. The computer and electronic products industry similarly drives real manufacturing output growth in most U.S. states. Real manufacturing GDP growth between 1997 and 2007 falls by more than half in a majority of states and by at least 25 percent in all but 10 states. Furthermore, the extraordinary growth in real value added and accompanying productivity growth in the computer and electronic products industry results largely from prices for two sets of products: computers and semiconductors that, when adjusted for quality improvements, are falling rapidly. These quality improvements, in turn, largely reflect better design and increases in the density of electronic circuitry. While changes in manufacturing processes are necessary to produce these improved designs, the production processes in computer and semiconductors have been automated for many decades. Thus, the high growth in real value added and productivity in the computer and semiconductor product segments, and by extension the manufacturing sector, reflects, to a large degree, product improvements from research and development rather than automation of the production process. Unlike productivity resulting from automation, which involves the substitution of capital for labor, productivity arising from improvements to product design and production processes does not, in and of itself, cause job losses. Ironically, the extraordinary growth in real value added and productivity in the computer and semiconductor industries does not signal the competitiveness of the United States as a manufacturing location for these products. Drawing on new market research data, we provide evidence of the shift in the location of computer and semiconductor manufacturing to Asia. Few personal computers and servers are assembled in the United States today, and consequently the United States runs a large trade deficit for these products. The United States retains a significant presence in semiconductor wafer fabrication, but over the last decade manufacturing capacity has expanded much more rapidly in Asia, and, as a result, U.S. market share has declined rapidly. Although many of the computers and semiconductors produced overseas are still designed in the United States, the shift in the location of production has important implications for the number and types of U.S. jobs.

legolas2412 6y ago

I've seen this argument, but i never understand the people making this argument. China is called the factory of the world, and it is undeniable that a lot of chinese labor force works in manufacturing. So if jobs weren't lost due to outsourcing, then what are these industries and jobs doing in china? I think the standard response is that usa's manufacturing output has increased, but comparing 1970s manufacturing output to 2020 isn't at all fair. You need to consider the alternate world, where globalism wasn't this big a force, and most manufacturing stayed in usa. There would be even more manufacturing in USA, so globalism did lead to job loss.