Posted by: Michael Mandel on October 05
According to this morning’s employment report, U.S. manufacturing jobs dropped below 14 million for the first time since 1950. Yes, you read that right, one nine five zero. Manufacturing jobs just keep leaking away, with no sign of a bottom.
Of course, the official numbers appear to say that manufacturing output is still increasing, despite the decline in jobs. In fact, according to the BLS, manufacturing output is at an all-time high, more than 7% above where it was in 2000, despite having lost more than 3 million manufacturing jobs. And manufacturing output, according to the official numbers, is supposedly 5 times greater than it was in 1950, despite the fact that big chunks of American industry no longer exist.
I don’t believe the official numbers. I think that offshoring is playing tricks with the numbers. If a company offshores half or two-thirds of its production process, and still does the final assembly here in the U.S., the BLS counts it all as manufacturing output. Call it “offshoring illusion”.
I think there’s a good chance that manufacturing output, correctly measured, is shrinking. More about this later.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.