We hear a lot of talk about the decline of American manufacturing. Corporations are outsourcing. Jobs are fleeing for lands where production is cheaper, and "high quality" is a four letter word.
Reality paints a different picture: the U.S. is still a manufacturing powerhouse.
Related: The 12 Sneakiest Costs of Offshoring
The State of American Manufacturing
"...[T]he fact that China has lost more manufacturing jobs than the U.S. over the past 20 years is a strong indication that playing hardball with the Chinese isn’t going to do anything to increase employment in the United States.
Rather than a political failure, the decline of manufacturing employment is a natural economic process... As sectors become better at what they do, they often require fewer people to get the work done."
- Chris Matthews, Fortune.com
The influence of technology is most often acknowledged in our private lives. Smartphones, interconnected appliances, smart cars. But technology is impacting industry as well.
Unskilled American Manufacturing Jobs Do Not Equal Revenue
As we progress through the Internet of Things and Big Data, automation continues to displace unskilled labor jobs.
Machine production is more efficient and cost-effective than a human performing the same function. Machines can complete multiple tasks at once - you would need to hire multiple people to meet that efficiency. As Chris Matthews states above, "As sectors become better at what they do, they often require fewer people to get the work done."
Although the unskilled jobs are being absorbed by technology, there is more demand for skilled labor. We need people to maintain, troubleshoot, engineer, and program technology. We need R&D and scientists to find even better ways of producing goods and services.
Millennials seem to understand this concept. There are fewer unskilled Gen Y workers in the manufacturing sector, and more than ever in the service sector. The service sector assists crucial supply chain operations, including:
- Warehousing
- Truck Transportation
- Information
- Commodities
- Waste Management
Without a thriving service sector, your supply chain would scoot along at a snail's pace. More machines in industry, more human beings in service - that sounds like a more efficient economy.
Stuff You Should Know About American Manufacturing
The manufacturing industry has an incredible impact on America's economic growth. Check it out:
- According to the NAM, for every $1.00 spent in manufacturing, another $1.81 is added to the economy.
- In 2015, manufacturers contributed $2.17 trillion to the U.S. economy.
- Multiple sources compare the U.S. manufacturing sector to a separate economy. It ranks 10th of all global economies.
- Earlier this year, Fortune.com predicted that the U.S. will surpass China as the #1 manufacturing company by 2020.
Tilt your perspective a little, and the future looks much brighter.
(Editor’s note: This blog was originally posted in December 2016 and was recently updated.)
