Manufacturing Matters: How Much?
Many Americans are
still believers in the Service Economy, and the employment numbers seem to give
them a boost. Indeed, it was back in the late ’60s that the United States
became the first modern economy to count more service jobs than manufacturing
jobs. Those numbers today are around 51 million jobs in services and about 18
million in manufacturing of all non-farm employment. The manufacturing number
hasn’t changed much in 30 years. The service sector has tripled. So
that’s where the action is? Not at all.
First off,
manufacturing jobs pay better. A lot better. The typical factory job in America
pays around $42,000. Service jobs
average $26,000, according to a new book on all of this titled Manufacturing
Works, by Fred Zimmerman
and Dave Beal from Dearborn Trade Publishing, Chicago. But more important is
the structure of a modern economy like ours. After all, what do most service
industries service if not the production sector?
The astounding fact
that our $9.4 trillion economy today puts out all those goods and services with
essentially the same number of manufacturing workers as we had 30 years ago is
something to ponder. And, in terms of aggregates, manufacturing’s total
dollar contribution to the enormous American economy grew by almost 50 percent
in the 1990s. Our industrial output is something like 50 percent higher than
Japan’s and equal to the combined manufacturing totals of Germany, the
U.K. and France, according to the book. Not bad for a service economy.
Further, and as
explanation, the authors point out that manufacturing productivity rose more
than 31 percent in the 1992-99 period alone. Service sector productivity,
incidentally, has actually declined in the past few years. Such statistics, the
authors note, include huge variations from company to company and industry to
industry.
More recent numbers
suggest, even during this uncertain time, that industrial investment in modern,
high-tech machinery and computers over the past decade is still paying off.
Output per man-hour in manufacturing continues to increase even more
significantly.
Simply put, the
country remains a production powerhouse even though millions of its own
citizens don’t seem to know it, and that is a very serious problem. For
if Americans somehow come to believe that manufacturing is something for
Asians, Europeans and others to do, while we just count up the television sets,
cars and golf clubs they send us — then send them thank you notes and
IOUs — eventually reality will arrive at our door. No country can stay
wealthy for long without producing wealth. No country can have a standard of
living that is high for long without advanced productive work done in state-of
the-art factories.
“America
should cast a skeptical eye on the argument that we have reached some sort of
‘post-industrial state,’ wherein manufacturing will give way to a
higher order that calls for other nations to do the producing while the United
States enjoys the fruits of that production,” Zimmerman and Beal write.
Their point is that while we remain the leader in total manufacturing output
and productivity growth, those leads are threatened by the ignorance of
millions and the anti-manufacturing ideas of many others in various walks of
life.
Rarely is industry
portrayed in popular culture as anything but a nuisance; they’re
polluters, they offer primitive working environments and boring and/or noisy
places to work. The authors of Manufacturing Works have added a book to be used against such
nonsense. It may not tell you anything you don’t already know in general
terms, but give a copy to your local politicians, your congressman and your
kids’ teachers. Encourage them all to read it. It’s just what they
need to combat the mushy ideas about economics that seem to dominate our
national discussions these days.
George Weimer, contributing editor,
weimerg@fleishman.com
