Mike on Manufacturing

Made in the U.S.A.

By Mike Hart 

In my last post I pointed out that the strength of U.S. manufacturing is underappreciated due to the effect of productivity gains on the size of the work force and the way GDP is measured in prices rather than physical output.  Shortly after my piece was posted, I ran across a terrific column by Jeff Jacoby of the Boston Globe that eloquently makes the same case.   

Made in the U.S.A. by Jeff Jacoby

U.S. Manufacturing Strength is Underappreciated

By Mike Hart 

It is a common perception that manufacturing is on the decline in the Unites States, that we don’t make things anymore.  Today, the manufacturing sector only accounts for 9% of the work force.  From a GDP standpoint, manufacturing was 27% of economic output in 1950 and accounts for only 12% today. 
 
One of my favorite economists, Alan Reynolds of the Cato Institute, points out in a recent blog post that “those who imagine ‘we don’t make anything anymore,’ as Donald Trump claims, don’t grasp the magnitude of America’s industrial productivity gains.”

“A Wall Street Journal Column Understates the Size of U.S. Manufacturing” by Alan Reynolds