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Is the USA in 'irreversible decline'?

By Steven Meyer - posted Tuesday, 17 July 2012

Myth 1: America doesn't manufacture anything anymore.

There is no dearth of manufacturing activity in the US. There is, however, a dearth of manufacturing jobs. Let's see what has happened to manufacturing output in the US over the past three decades.

Percentage change in manufacturing output in constant dollars
1980-1990	+26.7
1990-2000	+40.8
2000-2010	+ 1.6

The low figure for the last decade reflects a fall in the years 2008-2009 and a rebound in 2010. So even during a catastrophic decade US manufacturing grew by 1.6%.

Now let's see what happened to manufacturing employment during that period.

Percentage change in manufacturing employment
1980-1990	- 5.5
1990-2000	- 2.4
2000-2010	-32.6

(Source: Bureau of Labor Statistics)

Even as manufacturing output was growing employment in manufacturing was shrinking. Putting the data from the two tables together this is what it means for US manufacturing productivity.

Percentage increase in manufacturing output per employee in constant dollars
1980-1990	+34
1990-2000	+44
2000-2010	+51

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About the Author

Steven Meyer graduated as a physicist from the University of Cape Town and has spent most of his life in banking, insurance and utilities, with two stints into academe.