Manufacturing in the U.S.: Vigorous, but Having a Hard Time

By November 2, 2009Economy, Taxation

Bloomberg, “Death of U.S. Manufacturing Exaggerated as Free Trade Deferred.” This is a solid look at the state of the U.S. manufacturing sector, highlighting the recent and politically consequential trend: Productivity is increasing, but employment is falling. We’ll cite the most provocative statement:

[The] idea that job losses mean U.S. manufacturing has hollowed out is a “myth,” said William Overholt, a senior research fellow at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts. All industrialized and industrializing countries go through the same process as their manufacturing becomes more sophisticated and productivity increases. The U.S. lost 2.6 million factory jobs from 1994 to 2004, while China lost 25 million, according to a study Overholt did for the Santa Monica, California-based Rand Corp.

“The familiar views of the fate of U.S. manufacturing are basically a combination of paranoia and propaganda,” Overholt said. “The idea that America’s manufacturing economy is dying is the silliest nonsense.”

The Virginian Pilot, “Closures sting, but region hasn’t lost manufacturing base.” The Tidewater area of Virginia has been hit by some bad jobs news lately: Interational Paper is closing its Franklin mill; Smithfield Foods Packing Co. is shutting down its South Plant; and the CooperVision contact-lens plant in Norfolk in closing. Combined, the shutdowns will cost the are at least 2,300 jobs.

Associated Press, “STIMULUS WATCH: Factory towns slow to see stimulus“:

WASHINGTON — Many communities hit hardest by job losses, those built around dying factories and mills, have been slowest to see relief from President Barack Obama’s stimulus plan, underscoring how hard it is for Washington policymakers to create lasting work in areas that need it most.

The manufacturing industry has shed hundreds of thousands of jobs during the recession as plants have closed or scaled back. Places such as the southwest Missouri city of Lamar, tucked amid endless fields of winter wheat and soybeans, have seen the cornerstones of their economies disappear, leaving a gap that even billions in roadwork and government aid cannot fill


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