There is no shortage of self-appointed experts in the media who love to loudly proclaim that the U.S. manufacturing industry is dead. They gleefully point out the fact that America imports more finished goods than it exports, and list China as the global leader in manufacturing. While China does indeed lead the world in production volume, and while American manufacturing has had its missteps and is likely to face challenges in the future, this U.S. industry is far from dead.
Take a look at these statistics about the American manufacturing industry.
1. In 2012, the Manufacturing Industry Contributed $2.03 Trillion to the U.S. Economy
This is up from $1.93 trillion in 2011, and made up 12.5 percent of America’s gross domestic product. In addition, every dollar spent in the manufacturing industry adds $1.32 to the U.S. economy. No other economic sector equals this multiplier effect. Without the manufacturing industry, the economy in the U.S. and many other countries would face hardship. One reason China is able to export such a large number of products is that the U.S. is a voracious importer of consumer goods. The government of China understands this, which is why the value of its currency is tied to the value of the American dollar, rather than being allowed to vary according to the international currency market conditions.
2. One out of Six Private-Sector Jobs Are in the Manufacturing Industry
The manufacturing industry supports the employment of 17.4 million people in the United States. More than 12 million Americans have manufacturing jobs.
Without the manufacturing industry, many more people in the United States would be unemployed. The knee-jerk reaction to this statistic is to claim that manufacturing jobs are low-skill, low-paying positions that leave workers unable to support themselves, but this simply is not the case.
3. Manufacturing Industry Wages Beat Average Wage for All Industries
The average worker in the United States’ manufacturing industry earned $77,505 in pay and benefits in 2012. This is nearly 25 percent higher than the all-time industry average of $62,063. Jobs in the United States manufacturing industry are not just menial jobs for workers who cannot find employment elsewhere. U.S. manufacturing workers are smart, educated and hard-working.
4. United States Manufacturing Workers Set the Global Standard for Productivity
Worker productivity for U.S. manufacturing is far greater than the worker productivity in any other major manufacturing economy in the world. This leads to higher wages and higher living standards for all Americans. No other country has a more potent combination of opportunity, raw materials and skilled labor force; American manufacturing is still a force to be reckoned with.
5. United States Manufacturing Industry Drives Innovation
Two-thirds of all private sector research and development dollars in the United States are spent by companies in the manufacturing industry. This means that the manufacturing industry is among the most innovative industries in the nation. This innovation often comes in the form of novel manufacturing methods and trends, such as 3-D printing and mass customization. As was the case more than 100 years ago with the rollout of the assembly line, the manufacturing industry innovations of American companies lead the world. The demands of the American consumer for high-quality products drive innovation in products and techniques, which then are set free to serve benefits worldwide.
Throughout history, there have been prophets of doom and gloom — those who have predicted the worst. Modern times are no different. Unfortunately, the more extreme the message, the more attention a pundit seems to attract. The best response to this trend is to research the facts for yourself. When you look beyond the media hype and paranoia surrounding the state of American manufacturing, you will see that this industry is strong, innovative and well prepared for whatever the future may hold.
In the early days of the Industrial Revolution, the American manufacturing industry fueled expansion by paying low wages and subjecting workers to poor working conditions. These conditions are not dissimilar to the current state in the Chinese manufacturing industry. These conditions did not endure in the United States, and they will not endure indefinitely anywhere in the world. Once Chinese manufacturers are forced to offer higher wages and better working conditions, the American manufacturing industry will likely prevail.
Note: Statistics are compiled from publicly available information from the Bureau of Economic Analysis, Bureau of Labor Statistics, National Association of Manufacturers, United Nations, International Labour Organization, National Science Foundation and International Monetary Fund. See the full report here: http://www.themanufacturinginstitute.org/Research/Facts-About-Manufacturing/Facts.aspx
About the author: Tom Bonine is president of National Metal Fabricators. The Chicago area firm, established in 1944, offers custom fabrication, angle rings, welding, and bar milling services.