Member-only story
US Manufacturing Can’t Keep Up
Consumer demand has outstripped productivity gains.
One of my recent articles dove into the reasons for the supply chain debacle we are currently experiencing (The Real Reason for Supply Shortages). While it’s true that there is a logistical nightmare in the shipping industry, I pointed at the decline of American manufacturing as the main culprit. I didn’t mince words, stating, “The truth is that the US doesn’t make anything anymore.”
A bold statement, to be sure. But one that holds a not insignificant kernel of truth.
One of the first responses completely disagreed with me. From John Griswold:
This is so laughably false that it throws your entire thesis into question. The top two global manufacturing nations are China, with 20% of global manufacturing and the U.S. with 18%. The next closest nation is Japan with 10%. Back to the drawing board for you ;)
A follow-up comment from Laurence Mailaender linked to an article from the St. Louis Federal Reserve, entitled Is U.S. Manufacturing Really Declining? The crux of the article is that manufacturing has declined as a share of employment and nominal GDP, but has remained steady as a share of Real GDP (i.e. adjusted for inflation).
