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Manufacturing in USA. Map of industrial production in the USA. Diagram showing the change of industrial production of the USA

While output continues to rise, a quarter of a million manufacturing jobs are being lost every year.

About a third of all U.S. manufacturing workers are women. DECLINE IN MANUFACTURING JOBS IN CANADA 1989-93 'We're continuing to move our manufacturing

footprint out of the U.S.' G.M.

Manufacturing in USA. Map of industrial production in the USA. Diagram showing the change of industrial production of the USA

MANUFACTURING

Reports to the contrary, manufacturing in America is not dead. Despite the erosion of U.S. firms' positions in some markets, notably consumer electronics and machine tools, industrial production rose smartly overall throughout the 1980s and early 1990s, a period of so-called deindustrialization. In fact, international comparisons are surprisingly flattering to the U.S.: between 1980 and 1993, the growth in U.S. industrial production, according to the Federal Reserve's index, eclipsed all the Group of Seven (G7) countries but Japan; from 1985 to 1993, the U.S. outscored even Japan. (The G7 consists of Canada, France, Germany, Italy, Japan, the U.K., and the U.S.)

From 1980 to 1993, the Federal Reserve's narrower index of manufacturing production, rose 42%. Over the same 13-year period, employment in manufacturing declined by 12%, or 2.5 million jobs, and real (inflation-adjusted) wages fell by 8%. The U.S. now has the second-smallest share of its workforce in manufacturing of the G7 after Canada, and the third-lowest hourly wage after Britain and Japan. This disparity between wages

and employment on one hand and production on the other is often celebrated as a productivity miracle, but its miraculousness depends a great deal on where you are standing.

Behind these averages lie an important wealth of detail. A Census Bureau study of over 50,000 manufacturing plants between 1972 and 1988 shows that in an average year, new jobs equaled 9% of manufacturing employment - but over 10% of all jobs were destroyed, resulting in an annual net decline of over 1%. The rapid pace of 'creative destruction' (in economist Joseph Schumpeter's phrase) required that almost 12% of all manufacturing workers either became unemployed or had to find a new job every year.

National averages disguise important regional shifts. The states of the Northeast and Midwest have seen the manufacturing share of their economies decline since the late 1970s, some quite dramatically, while the South and West gained. This means that on balance, union jobs were replaced with nonunion ones, and high-wage with lower wage.

Yet even those states where manufacturing's share of their economies gained, there was no boom in manufacturing employment.. As the inset map shows, manufacturers also set up operations in Mexico - at first, these were for fairly routine assembly work, but by the early 1990s, they were becoming more sophisticated. It also shows that by this time Canada was suffering a similar fate to the U.S. states of the Northeast and Midwest - as high-wage, unionized plants have been shut and production moved to the business-friendly climes of Texas and Mexico.

In theory, displaced manufacturing workers should have little problem finding new work in the rising service sector. A glance at the government's projections of the fastest-growing occupations through 2005, some of which are shown in the bar chart, tempers this theoretical optimism. At the end of 1993, manufacturing jobs paid an average of $509 a week; as they dwindle they will continue to be replaced by jobs in retail trade, where weekly pay averaged $215; business services, $338; and home health care, $297. This shift out of manufacturing is sometimes compared to the shift out of

farming several generations ago - but this time, the shift involves pay cuts rather than pay boosts.

Sources to the map:

International Monetary Fund. International Financial Statistics: 1993 Yearbook. Washington, D.C., 1994; International

Monetary Fund. International Financial Statistics: March 1994. Washington, D.C., 1994; 'Mexican Maquiladora

Employment.' Twin Plant News (August 1993); Organisation for Economic Cooperation and Development. OECD in Figures,

1993 (supplement to the OECD Observer, June-July 1993); Silvestri, George T. 'Occupational Employment: wide variations

in Growth.' Monthly Labor Review, no.116:11 (November 1993): 58-86; Statistics Canada; U.S. Department of Commerce.

Economic Bulletin Board. Washington, D.C. ; Yuskavage, Robert E. 'Gross Product by Industry, 1988-91 .'Survey of Current

Business, no. 73:11 (November 1993): 33-44.

Acknowledgment: Mike Harper of the U.S.Bureau of Labor Statistics, Washington, D.C. for state labor force data.




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