What’s Not the Matter With American Manufacturing

Noam Scheiber has an interesting piece out about the declining interest of American business goals in manufacturing and the industrial sector. His followup here is also worth reading.

That said, whenever I read something on this subject—or when I was in Germany, whenever I heard a German industrialist being condescending—I do feel compelled to point out that the “decline” of American manufacturing is very frequently overstated. You often hear it said that American “doesn’t make things anymore” but it’s just not true. Industrial production is way lower than it was before the current recession started, but the secular trend is clearly upwards:

FRED Graph

What’s declined is not manufacturing, but manufacturing jobs:


In other words, our manufacturing has gotten much, much, much more efficient. Relatively low-value or unproductive factory work has gone overseas to take advantage of cheap labor and efficient transportation. What remains is an extremely productive industrial sector that’s making more stuff than ever.

That doesn’t make communities devastated by the loss of manufacturing jobs any less devastated, or change the fact that recent decades have seen wages for working class men stagnate or even decline.