The Manufacturing Industry Still Rules the Economy
Posted December 20, 2013 & filed under References
There is no doubt that the manufacturing industry is a vital part of the American economy. Although weaker than it once was, manufacturers continue to mend the industry that practically defined the economy in the 1970s.
The Titan of Industry
By June of 1979, 22 percent of all non-farm workers in the US were employed by the manufacturing industry. Unfortunately, manufacturing sustained huge losses during the recession. By 2007, manufacturing was already on the decline. By 2010, 2.3 million jobs were lost (295,000 in January 2009 alone) and the industry only employed 10 percent of all workers. Although the industry is a far cry from the powerhouse it once was, its impact is still felt in almost every industry in the US.
Facts & Figures
According to a report compiled by the Joint Economic Committee, the manufacturing industry currently:
• Employs more than 12 million people.
• Is responsible for 70 percent of private-sector investment and research and development.
• Employs 60 percent of research and development workers (innovation and improved productivity is responsible for more than half of economic growth in the US).
• Generates 90 percent of all patents.
• Has the highest economic multiplier of any sector. Every dollar put into manufactured goods yields 1.48 dollars of additional economic activity.
• Equates to 12 percent of the US GDP.
• Is responsible for the majority of US exports, which support more than 3 million jobs across the country.
Manufacturing & Its Effects on Other Industries
Each manufacturing job supports an additional 1.6 jobs in the US while each advanced manufacturing job supports up to 4.9 additional jobs. These numbers are mostly due to manufacturing supply chains, whose supplier jobs rely heavily on the manufacturing industry to survive. In fact, the manufacturing industry supports more supplier jobs than the entire retail industry (almost four times as many).
Manufacturing even acts as a catalyst for productivity gains. Studies have shown that businesses in local communities can experience up to a 12 percent increase in productivity as the result of a manufacturing plant moving into the area.
Since the recession, there have been significant gains in jobs and productivity in the manufacturing industry. The industry has begun to rebound back but it still has a long way to go to. Although it has lost significant power, it still is a huge factor in the economy.
Can manufacturing return to its once great standing, or has the country moved in a different direction from that of skilled labor?
By Kevin Withers