Ian Fletcher: Why America’s Manufacturing Recovery Is a Myth

From the Huffington Post:

Talk of a manufacturing revival is in the air. America has, in fact, gained a quarter-million industrial jobs (source) since the start of 2010. Unfortunately, this is less than 15 percent of the number lost during the recession. Furthermore, after this teasing uptick, U.S. manufacturing output seems to be stalling again. So it worth revisiting a much denied fact I have written about before here and here: American manufacturing is in a state of profound crisis.

First off, looking at aggregate manufacturing output, as most of these analyses do, obscures the fact that total output has only been stable (or close to it) because of a few sectors which have grown enormously. The rest of the manufacturing economy has been declining. According to a recent report from the Information Technology and Innovation Foundation,
Most manufacturing sectors actually shrank in terms of real value-added from 2000 to 2009. In fact, from 2000 to 2009, fifteen of nineteen U.S. manufacturing sectors saw absolute declines in output; they were producing less in 2009 than they were at the start of the decade.

The bottom line? Fifteen manufacturing sectors, comprising nearly 80 percent of U.S. manufacturing output, produced less in 2009 than in 2000.

Isn't the decline in U.S. manufacturing employment simply due to the relentless march of factory automation, and therefore a good thing? No. If the decline in manufacturing employment were due simply to the endless march of automation, we would expect to see slowly declining employment in this sector since a peak shortly after WWII. But instead, what see is a relatively stable employment level, but then things fall off a cliff after Y2K.

http://www.huffingtonpost.com/ian-fletcher/the-manufacturing-rebound_b_865166.html