This is important because too many experts, pundits, and policymakers in th...
2021-02-10 2 ENGLISH REPORTS
Aggregate employment trends also say little about the ability of U.S. workers to produce essential goods during a national emergency. For example, U.S. manufacturing employment increased by almost 1 million jobs between 2010 and 2018, “outperforming” Germany, Japan, and China in the process. However, over the same period, real manufacturing value-added per worker and per hour worked in the United States increased by only 0.3 percent per year and 0.1 percent per year, respectively, as compared to 5.6 percent and 5.7 percent per year between 2000 and 2008—a time of signifcant manufacturing job loss in the United States.14 In other words, American workers were improving their ability to produce manufactured goods (and thus to supply the economy in times of war or other emergency) at a much more rapid pace during the height of “deindustrialization” than during the subsequent period of “reindustrialization.”
In reality, neither job gains nor job losses demonstrate a vibrant (or lagging) American industrial sector. There also is little to indicate that U.S. manufacturing jobs deserve special government support.15 GDP SHARE. Manufacturing’s declining share of total U.S. GDP also refects secular trends largely disconnected from U.S. government policy. First, the change in the industrial sector’s GDP share refects the relative strength of the U.S. services sector instead of the weakness of American manufacturing. Indeed, between 1997 and 2019, real gross output and real value-added of private services– producing industries increased by 87 percent and 77.4 percent, respectively, while the same metrics for U.S. manufacturing increased by a slower-but-still-respectable 18.7 percent and 52.8 percent—continuing long-term trends in these U.S. sectors dating back to the 1940s.
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