Monday, August 24, 2009

Manufacturing Workers' Productivity At All Time High

A very good post with charts by Mark Perry on his Carpe Diem blog,"Manufacturing Output Per Worker Hits Record High."

Perry shows that while US manufacturing has trended upward since 1970, with occasional recessionary dips, employment in the US manufacturing sector has been continuously declining since WWII. Manufacturing employment has declined from from 38.75 percent of the workforce in 1943 to 8.99 percent in July 2009.

The US is producing more with fewer workers. Productivity is good because it lowers the prices of goods and raises the wages of those employed. In other words, what is taken as a sign, by Lou Dobbs and other similar media pundits, as a sign of the deterioration of the US economy is actually one of the reasons for the US's high standard of living when compared to the rest of the world.

While Perry did not discuss other countries, I will note that the US manufactures about 3 times as much as China. It is not obvious to US residents since many end products, low value consumer goods that the average consumer purchases say made in China and give the consumer a false impression that China produces more than the US.

Read Perry's complete post here.

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