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Status of US Manufacturing

Posted by: Annie Voy | February 7, 2011 | 17 Comments |

An interesting article that clears up some of the misconceptions of the trends in US manufacturing.

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Responses -

Wow, I try to follow current events and was completely unaware of the current state of American manufacturing. Either the public needs better access to economic information or the media needs cover economic events in a more responsible manner.

I thought this article was very interesting. I was definitely under the same impression as the general public that America does not manufacture anything anymore, but the article makes sense. Manufacturers in America are making products that we don’t consume everyday, so it is sort of “out of sight, out of mind.” It’s also definitely a sign of the level of development that we’re manufacturing so many goods with much fewer people.

This article was definitely eye-opening for me. I too, was under the misconception that American manufacturing was on the decline. Jobs leaving to go overseas always seems to be a hot political topic when elections roll around…it is interesting to see that politicians are either just as misinformed as the rest of us or are knowingly lying to us. In either case, it is depressing to some extent.

I found this article extremely interesting. I had the impression that everything seemed to be made in China as well. Hearing this impression being discussed and looking at the labels in the products in the stores gave me the impression that our economy is suffering because of the outsourcing. I connect this with the dicussion about sweat shops that we had earlier. These jobs that do not take as much skill or technology can go to these other countries where they need the income in order to better their lives and it does not hurt the American economy at all. Just like Sachs says, “this is not a zero sum game.” Americans need to realize that impressions are not always as they seem, and just because one country gains does not mean that we lose any of our wealth.

I have always assumed that when most of the items I purchased were from other countries, the amount produced in the US was not increasing let alone higher than every other country. It is interesting that the US produced more than several countries combined, and this was the first time I have heard that information. It does make sense however, because our technology has increased dramatically that there is less need for actual human labor in the production process.

I am slightly surprised ” [. . .] only one in five believe that the United States has the world’s strongest economy, versus nearly half who think China is in the lead.” I would think more people would think China would have the strongest economy and fewer would think the United States has the strongest economy. (On the other hand, as we remember from class, GDP [and possibly economy] is compromised of consumption (consumer consumption has goods and services)).

Also, as the article mentions, our economy has shifted away from factory workers or farmers to lawyers and engineers. Demand to be an engineer or lawyer has increased while farming and factory working have lost demand.

I have commonly heard the alarmist sounding rhetoric about manufacturing jobs being outsourced and the U.S. slipping into a predominantly service driven economy. Although I still think that trend is present to some degree, it does make sense that the diminished number of domestic manufacturing jobs is due in part to greater factory efficiencies and the introduction of robotic devices (ex. car manufacturing).

I did have one point of confusion when reading this article. The backbone statistic for the article came from a United Nations database of aggregated economic information. The statistics were from 2009 and we listed in each individual country’s domestic currency. For comparison purposes the author (Jeff Jacoby) converted the Chinese and U.S. manufacturing output to U.S. dollars. But, he did so using 2005 conversion rates. If he was to be consistent wouldn’t he need to covert the export amounts for 2009 with 2009 currency rates? If anyone has a revealing insight I would appreciate it.

Carson- The data Jacoby cites for China and the U.S. are from the linked database (http://unstats.un.org/unsd/snaama/dnllist.asp) under the table entitled “GDP and its breakdown at constant 2005 prices in US Dollars”. The numbers are measured in U.S. dollars for both countries which enable us to make an apples-to-apples comparison. The UN data set uses 2005 constant prices. This means that purchasing power is held constant at the 2005 level, which makes it easier to compare data across years; it’s common practice to use data measured in “constant 2005 prices” for any years; this is not the same things as using the currency exchange rate from a different year. It’s a bit confusing, but the methodology is sound.

Great question, though!

The disappearance of manufacturing jobs in the United States and towards the Chinese is definitely a prevailing misconception. I too have believed that our manufacturing jobs have been conveyed to China. An issue that arose when I was reading the article was the explanation that our manufacturing processes have become so progressive and advanced that we do not require the same amount of labor to produce the same amount of goods. The United States makes complex, technological goods that we do not come into contact every day. However, perhaps it is another misconception, but isn’t China almost at the same technological frontier as we are? And they are producing these simple goods. This is why Americans believe China has the strongest economy because they are technologically advanced and at the same time produce the simple goods.

This article goes to show how easy it is to have misconceptions about the economy. Most people, myself included, tend to think about what they see and hear about on a regular basis, and then shape their ideas around those. I always seem to think of American manufacturing as practically nonexistent, even though most of my relatives and family friends work for Boeing, which manufactures massive airplanes so close to home. Articles like these are eyeopening, and it is interesting to notice how much we ignore in our lives.

I found this article very insightful on the issue of American manufacturing. I had no idea that manufacturing in the US hits new highs every year. I definitely thought American manufacturing was declining as we outsource to low-cost labor. It makes sense, however, that as we outsource to countries like China that make “low-tech, labor intensive goods” our resources are freed to manufacture more high tech outputs. This article provides another reason as to why the public shouldn’t be so concerned about China “taking over.”

I find that this article has an interesting twist on the outlook of off-shore production. It seems that a common topic these days is how everything is being shipped off to foreign countries to be manufactured for lower costs and that this is hurting the United States. Labor costs are less expensive in countries that are not yet developed. This used to be the case in the United States when the manufacturing era was booming. We were a country that was developing at that time so the labor costs and production costs were less. Now that we are a developed country it makes sense to off-shore jobs due to the sole fact that more sophisticated jobs are available for our population. Such as doctors, lawyers, engineers, etc. as mentioned by the article.

Another interesting fact mentioned by the article was that the United States still accounts for 20 percent of the world’s manufacturing output. Which is still more than China. Although the United States no longer produces the less sophisticated products and services we once did that allowed our country to have a large manufacturing population, this does not mean that we are still not successful. We have more of a sophisticated success now than we ever did. Change is hard to accept but I believe that the United States has changed for the better and it will continue to be beneficial for our population.

As most people stated, this article really opened my eyes to the current state of manufacturing in the world. I guess that, as someone not really in the market for larger-scale items such as a fighter jet or an air conditioner, it is really easy to forget that the U.S. actually has a role in making things. For me, and most college-aged students, we see the labels on clothes and shoes or small machines like cameras or tvs, and think that, since they all say Made In China on them, most things are made in China. Luckily, the U.S. is still able to have a hand in manufacturing, and I feel that countries outside of the U.S. acknowledge our presence in the world market.

Wow, this article is very reassuring to me as I too was undre the impression that just about everything was being manufactured overseas these days. I guess it goes to show how contagious paranoia can be.

I am trying to think of consequences that could be associated with having more sophisticated manufacturing and job opportunities shifting towards more lucrative positions, and with this I fear that the US might start seeing problems for the lower class along with negative unemployment trends. Even though the US is known for having a very open social class system, I believe we are transitioning into a different era where the saying “the rich get richer, and the poor get poorer,” will start to play into effect.

I think there are some things that everyone needs to read in order to be aware of current events. This article should be one of them. This really addresses the issue that many Americans have with outsourcing. Just like how Sachs explains that just the lower level manufacturing jobs are moving off-shore, this article explains that the United States produces more high level products. Certain undesirable or low income jobs are leaving the United States and going to countries that have a large demand for manufacturing jobs.

One thought I had while reading this article is that although the United States is moving towards more service oriented jobs, there are some people who do not have the resources to go to college and gain the education to get the job as a doctor or lawyer. What is the future of low-income Americans?

This article is very interesting because I was definitely with the general public, thinking that most manufacturing has gone over seas. I agree with what others are saying on the article. It makes sense that the US manufactures more expensive and innovative products that take precise skills to complete the job. I did not know that the US still made up 20% of the worlds manufacturing goods, this is reassuring.

I really found this article to as I am one those people who carried that misconception that we don’t manufacture much of anything any more. I guess I didn’t really put it into perspective that we stereotype manufacturing to factory type jobs when in all actuality technology has changed the whole concept, look, operational processes of manufacturing. I have a friend that started up his own clothing company in New York and it has been very successful. He actually makes all of his stuff in the US so that he promotes homeland jobs, but the crazy thing is that consumers in China and Japan are giving him such great feedback on his products. The main thing is simply that they love the fact it’s made in the USA. I guess the store owners have been telling him that they brag about US made products to their friends over there. I find that pretty interesting and would love to see if some companies would consider manufacturing here to meet international demand for US made products?