Search
or Search by TOPIC
Search Supply Chain Videocasts
 
 
  Sign-Up Free Newsletter
 
   
     
Supply Chain News Bites - Only from SCDigest
 

-June 12, 2008

 
 

Supply Chain Graphic of the Week - Automation, Not Offshoring, Real Source of Manufacturing Job Loss

 
 

US Manufacturing Output Up 700% Since 1950, While Number of Workers Required to Make the Goods Has Fallen Dramatically

 
 

By SCDigest Editorial Staff

 
 

While there continues to be concern and controversy over the loss of manufacturing jobs in the US and Europe to low-cost countries, especially China, the real "villain" in this manufacturing employment trend is automation and productivity gains, not offshoring.

So says Brian Wesbury, an economist at First Trust Partners.

Wesbury constructed the graphic below for an article he recently wrote in The Wall Street Journal, which compares the growth of US manufacturing output from 1950 to today with the number of manufacturing jobs as a percent of total US employment.

 

Since 1950, US manufacturing output has grown seven fold, and has continued to grow strongly, while during the same time, the percent of manufacturing jobs has fallen from 30% of the US total to 10%. That number continues to decline.

Offshoring may now be exacerbating the trend, but the real drivers are investments in automation and resulting productivity gains. Wesbury notes that in the consumer durables sector of the economy, for example, productivity has risen at a strong annual rate of 4.8% for the past 10 years.

"In other words, if real growth is less than 4.8% [which it has been, we note], the sector needs fewer workers year after year," Wesbury writes. Over many years, that cumulatively adds up to huge job losses, even as manufacturing output grows.

Agree or disagree? What is your perspective? Let us know your thoughts at the Feedback button below.

 
     
Send an Email
     
 
Feedback
No Feedback on this article yet.
 


Supply Chain Digest Home | Contact Us | Advertise With Us | Sitemap | Privacy Policy
© 2006-2009 Supply Chain Digest - All Rights Reserved
.