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Some is from productivity gains, but some is significant shift in sectors, towards less labor-intensive sectors where competition with low-wage countries is les
by _delirium 12y ago
Some is from productivity gains, but some is significant shift in sectors, towards less labor-intensive sectors where competition with low-wage countries is less of a problem. For example the U.S. used to be a net exporter of steel, but is now a large net importer. It's not that the U.S. steel mills got more efficient through productivity gains and are still producing at high levels but with fewer employees. Rather, they did indeed largely close and move overseas. The U.S. now imports much of the steel it once produced domestically, and U.S. manufacturing has moved into other sectors instead.
I suppose you can consider realignment of a country's industry mix towards areas of competitive advantage to be a kind of productivity gain (at the macro level it improves the ratio of output to labor inputs), but it isn't precisely the same as productivity gains within a sector, caused by e.g. improved processes or automation.
- maxerickson 12y agoSee my sister comment. U.S. steel production in 2011 and 2012 compares reasonably to most of the 1980s. Not all that much new capacity was created in the U.S. though, and the population did grow almost 50%.
- akgerber 12y agoMy reading of those figures is that the US never recovered its steel production after the steel collapse of 1982: http://www.post-gazette.com/business/businessnews/2012/12/23/In-desperate-1983-there-was-nowhere-for-Pittsburgh-s-economy-to-go-but-up/stories/201212230258 http://www.post-gazette.com/business/businessnews/2012/12/23...
- maxerickson 12y agoThat's true. I was pointing more at the rise of China not disrupting the industry. I guess the rise of Japan and such had already done that.
- HeyLaughingBoy 12y agoDoes it matter? I mean, if I can buy something cheaper than I can make it myself, where's my incentive to make it?