Manufacturing is Growing in America!!

by James P. Tate on July 24, 2017

We have been hearing about the loss of manufacturing jobs in America for, at least, the past twenty years!  The recent political campaign focused on the loss of jobs and how important it was to bring manufacturing back to America.  But let’s look more closely at the hard data.

Although manufacturing jobs have indeed been sourced to overseas factories, especially in the labor intensive industries such as clothing and furniture production, the fact is that the manufacturing output component of the gross domestic production (GDP) has not been decreasing.  The manufacturing sector has produced $5.3 trillion worth of goods in 2016.  This is almost one third of the total GDP and is the largest component of the GDP.  The most important manufactured product is petroleum.  Refining of oil into various products was a $462 billion industry in 2015 (the last year that data is available).   Next to refining is the production of automobiles, pharmaceuticals and airplanes.  So, why are we seeing a reduction in manufacturing jobs if the output is increasing?

The main reason for the loss of manufacturing jobs is efficiency.  How many of you have seen your factory output increase in the past ten years?  We are producing more products with fewer resources, including labor.  That’s because we get bonuses if we produce more with less resources!  Automation is a key driver in efficiency.  We have all seen our factories become more efficient thorough automation.  Are we expected to keep manufacturing jobs in America by avoiding automation and efficiency?  If we did that we would lose more jobs and factories to more efficient and cheaper foreign competition.  The only way to keep manufacturing in America is to be more competitive and efficient than the foreign competition.  Try keeping your market share by resisting improvements!

Many of us in manufacturing are experiencing a labor shortage.  Not because there is no one available to work; rather, because those workers who want to work, don’t have the necessary skills to do the job.  It isn’t foreign factories that are taking away our manufacturing jobs; it is the automation we have to install to remain competitive.  Just as we change our factories through automation, we have to change our workforce through retraining.  When we made our old machines obsolete by introducing new machines, we inadvertently added a degree of obsolesce to our work force.  These two components must be upgraded together if we are to make a full improvement in manufacturing.

It is time to face the true facts and ignore the political rhetoric.  If we want to continue our success as a manufacturing country, we have to continue our improvements and train, and retrain, our work force to use the powerful component of automation to drive our country to ever greater growth.


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