losing manufacturing jobs?

From Robert B. Reich:

~quote~

America has been losing manufacturing jobs to China, Latin America and
the rest of the developing world. Right?

Well, not quite.

It turns out that manufacturing jobs have been disappearing all over
the world. Economists at Alliance Capital Management in New York took
a close look at employment trends in 20 large economies recently, and
found that since 1995 more than 22 million factory jobs have
disppeared.

In fact, the United States has not even been the biggest loser.
Between 1995 and 2002, we lost about 11 percent of our manufacturing
jobs. But over the same period, the Japanese lost 16 percent of
theirs. And get this: Many developing nations are losing factory jobs.
During those same years, Brazil suffered a 20 percent decline.

Here's the real surprise. China saw a 15 percent drop. China, which is
fast becoming the manufacturing capital of the world, has been losing
millions of factory jobs.

What's going on?

In two words: Higher productivity.  All over the world, factories are
becoming more efficient. They've installed new equipment and utilized
new technology. And that often means fewer jobs.

Market reforms have also played a role. In China, new modern factories
are replacing large, inefficient state-run plants. The result is that
even as China produces more goods than ever before, millions of
factory workers have been laid off.

Manufacturing is following the same path as agriculture. As
productivity rises, employment falls because fewer people are needed.

In 1910, almost a third of adult Americans worked on farms. Now, fewer
than 3 percent do. But American agriculture is the most productive in
the world.

Similarly, global manufacturing output is rising-since the mid-'90s,
up 30 percent-even as worldwide manufacturing employment has been
dropping. The two trends are directly related.

So next time you hear a politician complain that American
manufacturing jobs are fleeing to low-cost countries like China or to
Latin America, watch your wallet. Everyone's losing factory jobs.

~~~~
Robert B. Reich is the Maurice B. Hexter Professor of Social and
Economic Policy at Brandeis University, and was the Secretary of Labor
under former President Bill Clinton. This commentary originally
appeared on MarketplaceŽ , public radio's only daily business news
program, on November 5, 2003

AND:

Econ Quiz: Manufacturing.
jim blair   Sep 16, 2005    
 


Econ Quiz 


A quiz for net economists: what is currently the leading manufacturing 
nation? 


And what country was it in 1982? (I pick that year as being "before 
Globalization") 


Before you answer, another question: how is this measured? Clearly not by a 
count of the number of manufactured items. Many cheap or low priced items do 
not count as much as a few high priced items. The World Bank recently 
released figures on "value added by manufacturing" by country. This is 
clearly the proper measure. 


And Number One in 2004? The USA. It accounted for 23.8% of all of the 
world's manufacturing value. And in 1982? Also USA. But then our share 
was slightly higher at 24.6%. 
(I wonder what the uncertainty in these figures is? ;-) 


In In both years, Japan was in second place with 20.9% in 2004. 
And number 3 is China with 9%. 


Are you surprised that China ranks so low and is so far behind the leaders? 
I was. But China has moved up the fastest and recently replaced Germany as 
number 3. 


I'll guess that many people think that China ranks higher because so many of 
the low priced goods we buy in the US were made there. (Wal-Mart: Always the 
lowest price?). But the airplanes, cars, giant earth moving machines and 
such that the US makes count for more value. 


And consider also that while the total value of manufactured goods is 
expanding worldwide , the number of workers employed to make them is 
dropping. Even in China which is rising fast in value added by 
manufacturing. Because of rapid gains in productivity. 




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