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One of the complaints I hear frequently from many quarters is that these United States do not make anything anymore. Today I intend to make short shrift of that myth.
The truth? We are producing more goods than ever before in our history. In 2013, the US manufactured over $2.07 Trillion worth of goods or over 17 percent of world manufacturing output.
The truth? We are producing more goods than ever before in our history. In 2013, the US manufactured over $2.07 Trillion worth of goods or over 17 percent of world manufacturing output.
What’s the catch? Two things stand out as major trends that provide some issues.
First, our manufactures used to be as high as 30 percent of world output in the early 1980’s and again in 2000-02, according to the United Nations. But that was during times of much lower world output too.
In 2000, our output was only about $1.55 Trillion. But it rose to an amount in excess of $1.8 Trillion by 2007, dipping again to $1.7 Trillion in 2009 before steadily increasing to almost $2.1 Trillion. World manufacturing is obviously much greater than ever before also.
The primary change in the past few years has of course been the rise in China’s percentage of the total. It was less than 10 percent as recently as 2005, but due to actual increased production and a 25 percent strengthening of the yuan against the dollar, it amounted to approximately 23 percent of the planet’s manufactures in 2013, measured in US dollars.
Second, another potential problem (in some minds) is our incredible rise in worker productivity. China’s manufacturing takes twelve times the number employed in the US. In 2014, our figure included 12.24 Million workers, but that was only 8.7 percent of our total non-farm employment. China produced about $650 Billion more goods but it required 150 Million workers to do so.
As fewer workers produce more goods, many complain about employment. Over half of the US population used to work in farming too, but now it takes about 3 percent to produce far more in total agriculture output than we need for ourselves. I’m not sure how one could fix that problem, but I am absolutely certain that it would not be good for any of us if Congress passed a law mandating that every auto we manufacture have 100 workers touch it on the assembly line.
I am amazed that in 2014, we exported over $1.4 Trillion in manufactured goods. Remember above that in 2000, the total of all our products was only $150 Billion more than just our exports now. I recall that during the late 1970’s, the newly formed Department of Energy under President Carter forecast we would be totally out of oil by 2000. Now we have so much capacity and production, we have lifted the oil export ban. In poor English usage, you ain’t seen nothing yet.
Last week at the Rotary Club of Independence, one local high school student spoke of her challenge of being a top student in English, but told of her passion for math and science. She plans to become a Chemical Engineer. Those experts are always in fairly short supply and therefore command some of the highest incomes in our land. How great to know we can still produce home grown STEM graduates and not have to import them all from overseas!
(Primary source of statistics: United States Manufacturing Facts, www.nam.org/Data-and-Reports; and U.S. Manufacturing in International Perspective, M. Levinson, March 17, 2015, Congressional Research Service, found at https://fas.org/sgp/crs/misc/R42135.pdf. Past performance is no guarantee of future results. Advice is intended to be general in nature.)
