11 thoughts on “We Make Stuff

  1. What, measured in dollars, while the dollar continues it’s long size down? No correction for population? No comparison to other sectors? No correction for (military) earmarks? Surely you can do better than that.

  2. It’s measured in constant 2005 dollars, so inflation is adjusted for. There’s been some population increase, but not nearly as much – this figure would still show a steady rise since 1985 with population in the denominator. The vast majority of these figures consist of consumer goods and business equipment, not military hardware. “Defense and space equipment” consisted of just $92 million in 1985 and $97 million in 2010, so it’s not just a small part of industrial production, but a diminishing proportion of it as well.

    Why compare to other sectors?

  3. I’ve been wanting to make the same point for awhile, but you beat me to it. The “decline of manufacturing” in the US is one of the great myths of our day. People think that because many types of manufacturing jobs have declined or gone away that manufacturing is suffering.

    You see, there are things called machines…

  4. Yep. Manufacturing employment has declined even as production has dramatically increased, because machines and support workers have made labor so much more productive in the sector. The ballyhooed “service sector” is what makes those productivity gains in manufacturing happen.

  5. Semantics. Your graph shows that the correct claim is not “America doesn’t make things anymore,” we should be saying “Americans don’t make things anymore.”

    1. OK, but why is that a concern then? Fewer Americans are making things, because more Americans are helping the remaining Americans make things. I don’t think that’s the story the protectionists want people to believe.

      1. I’m not sure whether it’s a concern or not. My point was that production quantity and jobs are two distinct issues, and the graph offers evidence for one, not the other. Incidentally, nor does it offer evidence for the claim that “more Americans are helping the remaining Americans…” (or that any would be “helpers” are more meaningfully connected to manufacturing than, say, a trucker for ADM is connected to farming).

  6. American manufacturing is experiencing the same productivity gains as American agriculture did in the last century. Nobody works in American agriculture anymore but it produces more than ever before.

  7. It would be useful to see this chart with a few other lines on it – the comparable amount made in China for the US market and the manufacturing employment line in both countries. This may illustrate that the ‘problem’ of off-shore manufacturing isn’t really reduced labor costs, but some other value (e.g. economic freedom). Or, at least there will be some inflection point where manufacturing is automated enough that other costs overwhelm labor cost discrepancies. For example, if a chip fab can be run with a few dozen employees then the costs of shipping and fears of trade secret theft will balance out those minor labor costs. In that case, more mechanization is called for. On the other hand, if the costs of building the factory (i.e. trade union wages) and regulatory costs are the real barrier then that has policy implications as well. Manufacturing jobs may be the fall guy here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s