On the topic of US manufacturing vs. other countries. I don't think anyone in the US has a lot to be concerned about:Despite China's might, U.S. factories maintain edge
Yet America remains by far the No. 1 manufacturing country. It out-produces No. 2 China by more than 40 percent. U.S. manufacturers cranked out nearly $1.7 trillion in goods in 2009, according to the United Nations.
The story of American factories essentially boils down to this: They've managed to make more goods with fewer workers.
The United States has lost nearly 8 million factory jobs since manufacturing employment peaked at 19.6 million in mid-1979. U.S. manufacturers have placed near the top of world rankings in productivity gains over the past three decades.
That higher productivity has meant a leaner manufacturing force that's capitalized on efficiency.
And this productivity (and capital investment per worker) is important...because wages track with productivity: higher productivity translates into higher wages.Factories in decline? It's OK, services will do nicely
The United States alone produces roughly 20% of all the world's manufactured goods. We may not make many toys or cell phones any more, but we do make most of the world's artificial knees and hips, medical scanners and jet aircraft. Those sound like good jobs to me.
Manufacturing fetishists also ignore the fact that many factory jobs were actually not very good jobs at all.
Those jobs may have offered a fairly good wage for a low-skilled position, but they were dull, dirty, sometimes dangerous and had very little chance for advancement.
The service jobs the worriers dismiss as "hamburger flipping" actually offer better wages, better working conditions and much greater opportunity than assembly line work.
I wonder how many of the worriers want their children to grow up to tighten bolts in a factory instead of going to university and getting a job in the service sector?
The worrier's core error is the idea that manufacturing makes "real wealth" while service jobs only move things around.
This is simply wrong. There's nothing less real about service jobs.
It is also important to note that while slipping hamburgers, serving coffee at Starbucks and cutting hair are service jobs...so are writing and designing things like software, cars, iPads, etc....and sales, marketing and advertising...and medical professions...etc.
This isn't the first time people have made a fetish of one particular industry and tried to stop the economy from evolving in strange new ways. At the beginning of the Industrial Revolution a group of proto-economists known as the Physiocrats took agriculture as their fetish.
They claimed that real wealth only came from working the land and that the new rage for making things was diverting people from the one true economic activity.
The bottom line? While the US doesn't manufactur lower values items like iPods, iPads, iPhones (not to mention a whole raft of other much lower value items like gift shop trinkets and baubles...clothing, etc.) it does manufacture a ton of very high value items. And the fact that people in the US are freed
from manufacturing these lower value items, they are freed
to do other
, more valuable
, things. And, eventually, even as all people strive to escape manufacturing these lower value items, automation will replace them and free them to do other things that are more important.