Politicians, businessmen and labor union spokesmen have whined about the decline in U.S. manufacturing. Before looking into what they say is the sad decline in U.S. manufacturing, let's examine what has happened in agriculture. In 1790, farmers were 90 percent of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, less than 3 percent of Americans are employed in agriculture. What would you have Congress do in the face of this precipitous loss of agricultural jobs? One thing Congress could do is outlaw all of the technological advances and machinery that have made our farmers the world's most productive. Our farmers are so productive that if needed, they could feed the entire world.
Let's look at manufacturing. According to Dr. Mark Perry's Department of Labor employment data, in his article "Manufacturing's Death Greatly Exaggerated" (http://blog.american.com/?p=8593), U.S. manufacturing employment peaked at 19.5 million jobs in 1979. Since 1979, the manufacturing workforce has shrunk by 40 percent and there's every indication that manufacturing employment will continue to shrink. Before you buy into the call for Congress to do something about manufacturing job loss, there are some other facts to be considered.
According to the Federal Reserve, the dollar value of U.S. manufacturing output in November was $2.72 trillion (in 2000 dollars). Today's manufacturing worker is so productive that the value of his average output is $234,220. Output per worker is three times as high as it was in 1980 and twice as high as it was in 1990. For the year 2008, the Federal Reserve estimates that the value of U.S. manufacturing output was about $3.7 trillion (in 2008 dollars). If the U.S. manufacturing sector were a separate economy, with its own GDP, it would be tied with Germany as the world's fourth richest economy. The GDPs are: U.S. ($14.2 trillion), ***an ($4.9 trillion), China ($4.3 trillion), U.S. manufacturing ($3.7 trillion), Germany ($3.7 trillion), France ($2.9 trillion) and the United Kingdom ($2.7 trillion).
These facts put a lie to claims we hear about how we are a country that "doesn't produce anything anymore," and how we have "outsourced our production to China," and there's been a "demise of U.S. manufacturing." U.S. manufacturing has gone through the same kind of labor-saving technological innovation as agriculture. Should we discard that innovation in the name of saving jobs?
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
October 9, 2007 (revised) (originally released May 2, 2007) | EPI Briefing Paper #188
Costly Trade With China
Millions of U.S. jobs displaced with net job loss in every state
by Robert E. Scott
See media kit
Contrary to the predictions of its supporters, China's entry into the World Trade Organization (WTO) has failed to reduce its trade surplus with the United States or increase overall U.S. employment. The rise in the U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported 2,166,000 U.S. jobs. Most of these jobs (1.8 million) have been lost since China entered the WTO in 2001. Between 1997 and 2001, growing trade deficits displaced an average of 101,000 jobs per year, or slightly more than the total employment in Manchester, New Hampshire. Since China entered the WTO in 2001, job losses increased to an average of 353,000 per year—more than the total employment in greater Akron, Ohio. Between 2001 and 2006, jobs were displaced in every state and the District of Columbia. Nearly three-quarters of the jobs displaced were in manufacturing industries. Simply put, the promised benefits of trade liberalization with China have been unfulfilled.
As a matter of policy, China tightly pegs its currency's value to that of the dollar at a rate that encourages a large bilateral surplus with the United States. Maintaining this peg required the purchase of about $200 billion in U.S. Treasury Bills and other securities in 2006 alone.1 This intervention makes the yuan artificially cheap and provides an effective subsidy on Chinese exports; best estimates are that the rate of this effective subsidy is roughly 40%. China also engages in extensive suppression of labor rights; it has been estimated that wages in China would be 47% to 85% higher in the absence of labor repression. China has also been accused of massive direct subsidization of export production. Finally, it maintains strict, non-tariff barriers to imports. As a result, China's exports to the United States of $288 billion in 2006 were six times greater than U.S. exports to China, which were only $52 billion (Table 1). China's trade surplus was responsible for 42.6% of the United States' total, non-oil trade deficit. This is by far the United States' most imbalanced trading relationship. Unless and until China revalues (raises) the yuan and eliminates these other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly in the future.
Major findings of this study:
The 1.8 million jobs opportunities lost nationwide since 2001 are distributed among all 50 states and the District of Columbia, with the biggest losers, in numeric terms: California (-269,300), Texas (-136,900), New York (-105,900), Illinois (-79,900), Pennsylvania (-78,200), North Carolina (-77,200), Florida (-71,900), Ohio (-66,100), Georgia (-60,400), and Massachusetts (-59,300) (Table 2A).
The 10 hardest-hit states, as a share of total state employment, are: New Hampshire (-13,000, -2.1%), North Carolina (-77,200, -2.0%), California (-269,300, -1.8%), Massachusetts (-59,300, -1.8%), Rhode Island (-8,400, -1.8%), South Carolina (-29,200, -1.6%), Vermont (-4,900, -1.6%), Oregon (-25,700, -1.6%), Indiana (-45,200, -1.5%), and Georgia (-60,400, -1.5%) (Table 2B).
China's entry into the WTO was supposed to bring it into compliance with an enforceable, rules-based regime, which would require that it open its markets to imports from the United States and other nations. The United States also negotiated a series of special safeguard measures designed to limit the disruptive effects of surging Chinese imports on domestic producers. However, the core of the agreement failed to include any protections to maintain or improve labor or environmental standards. As a result, China's entry into the WTO has further tilted the international economic playing field against domestic workers and firms, and in favor of multinational companies (MNCs) from the United States and other countries, and state- and privately-owned exporters in China. This has increased the global "race to the bottom" in wages and environmental quality and caused the closing of thousands of U.S. factories, decimating employment in a wide range of communities, states, and entire regions of the United States.
Will, what you obviously don't realize is that you just shot yourself in the foot with that. Your data dates back to when another Liberal Democrat was in office and got the ball rolling, Bill Clinton. Even more proof you don't have a clue.
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Obama=The Fourth Reich,
Just look at the parallels of the Nazi regime and the Obama Administration amazingly similar arent' they.
Last edited by thndrchiken; 01-12-2010 at 06:43 AM.
Too funny Will. I post facts and you post speculation piece. I post the facts that our manufacturing output has increased not decreased. Your article begins with pure speculation and ends with something that flat out doesn't matter, trade deficits that are a myth. Your article speculates that the trade deficit could have employed thousands of workers here in the US. That's pure speculation. Then to go on about this myth of trade deficits is just that, a myth. Money always has to flow back to the source in order to have any value. You have never answered this question, what good is paper with ink on it to China? It looses value if they choose to hide it under the mattress (That's what you claim they do with it when you say it leaves and never comes back). Instead, China invests it all over the world where it does find it's way back to the US. If it doesn't were out paper with ink on it.
That last point in your article has to do with how China is screwing their people. So what? Why should I care? I know you care because you want to screw the American worker by taking away our liberty and forcing us to spend more for goods and services that only liberals approve of. I prefer my liberty. I like having choice in my life. I believe the Germans can make a better luxury car than Americans or ***anese. So I bought a German built car. I believe Ford makes a better SUV and so I bought a Ford SUV over 10 years ago that I still drive today. However, if you had your way, you would screw the American and raise prices on all foreign goods so they cost more. In other words, shoot a hole in our boat because China is doing that to their people. It doesn't make sense.
So to sum it all up. Our manufacturing in America is increasing not decreasing. Our manufacturing job market is decreasing but only because of productivity improvements. The productivity improvements allow for higher wages to be paid to the employee. In most books that's positive.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
So to sum it all up. Our manufacturing in America is increasing not decreasing. Our manufacturing job market is decreasing but only because of productivity improvements. The productivity improvements allow for higher wages to be paid to the employee. In most books that's positive.
So manufacturing jobs are decreasing and you would rather continue to send those jobs to China?
So manufacturing jobs are decreasing and you would rather continue to send those jobs to China?
I have no problem sending any job to any place. What you have a major problem with and can't comprehend is productivity increases are the #1 cause by far to manufacturing job loss. It's not out sourcing. Our manufacturing is increasing in America. Furthermore, your article makes several false assumptions. One being that all trade deficit dollars would go towards manufactured products if it were to be spent here at home. Two, (the biggest falsehood) that job losses are all out sourced jobs over to China. Go do the math. Either divide the trade deficit by the average of output of 235K/worker or multiply the number of jobs he is claiming are lost to outsourcing by 235K and you will find that they don't jive.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Here you go Will, Manufacturing lies exposed
