After WWII, the other manufacturing centers of the world were rebuilding from the war, leaving the U.S. as a manufacturing superpower. Post-war Americans had pent up demand and bought lots of goods. This allowed U.S. manufacturing to flourish. Later, those countries rebuilt and third world countries developed manufacturing. Allowing low-value manufacturing to be done in places like China allowed the U.S. to invest the money made into high-value things. Now, manufacturing is highly automated, so if low-value manufacturing returned, it would make everything more expensive and not bring many jobs because manufacturing doesn’t require many laborers.
“economic development officials and lawmakers from several states say that the uncertainty fueled by Trump’s on-again, off-again trade wars is keeping many foreign businesses from pouring money into the U.S. market right now. And it signals the uneven impact the tariffs are having on reshoring American manufacturing — Trump’s stated goal for raising rates to the highest levels in a century.”
China’s electric car industry was built on a battery developed in the U.S., but the U.S. didn’t consistently support electric vehicles, and China did, so the Chinese built a massive industry off of it instead of the Americans.
“The New York Federal Reserve Bank’s monthly survey of manufacturers, published earlier this week, reported sharp drops in what it calls “forward-looking indicators”—that is, what businesses expect the next six months to look like. The manufacturers in the survey expect to see fewer orders, longer delivery times, declining inventories, and lower levels of employment. About the only lines in the survey that are pointed upward are the expectations about prices.”
“as of May 2024, there were around 600,000 open positions in manufacturing (there’s almost 500,000 open today, according to the St. Louis Federal Reserve), so there isn’t exactly a shortage of roles out there. Instead, there is a disconnect between how Americans in general think of manufacturing and how they view it for themselves. This is one reason why the National Association of Manufacturers and the former Secretary of the Navy under President Joe Biden both called for increased immigration, Grabow notes.
“Such jobs can’t find enough interested Americans to fill them,” he wrote.
Manufacturing workers themselves report “markedly” lower personal satisfaction with their jobs than other workers, according to the Pew Research Center. They also report less satisfaction with their pay, health insurance, and other benefits, and flexibility of their work hours.”
“U.S. manufacturing output, even adjusted for inflation, is near all-time highs. While about 5 percent below its December 2007 peak, it’s up 177 percent compared with 1975, the year America last ran an annual trade surplus. Industrial production—manufacturing, mining, and utilities combined—is higher than ever. That’s hardly a collapse.
A principal source of confusion is the difference between jobs and output. Yes, the number of workers in manufacturing has declined dramatically—from around 19 million in 1980 to about 13 million today. But that didn’t happen because America stopped making things. It happened because we got incredibly good at making things.
Productivity in manufacturing has surged thanks to automation, technology, and global supply chains. Just as we now produce more food than ever with just over 1 percent of Americans working in agriculture (down from around 75 percent in 1800), we produce more manufactured goods with far fewer workers. That’s not economic decline; it’s progress.
Also fueling the perception of decline are regional factors. Shuttered factories in Detroit or Youngstown, Ohio, bring concentrated pain and struggle for affected workers. No one denies this. But manufacturing didn’t disappear; it relocated and upgraded.”