The myth of US industry's demise
Products at Wal-Mart and Target may come from overseas, but the US is still the world's No. 1 manufacturer. For many American companies, there's no place like home.
Chrysler bankrupt, General Motors (GM, news, msgs) on the brink, layoffs almost too deep to count. No wonder the recession has brought out a chorus of hand-wringers lamenting that America "doesn't make anything anymore" and that all the good jobs have been outsourced.
Someone needs to outsource these worrywarts. Because few myths could be further from the truth.
Despite headlines about low-wage workers in China and our factory jobs going to India -- which has happened to some degree -- the U.S. is still far and away the biggest manufacturer in the world.
.S. workers produce 21% of all factory goods made globally, or about $1.7 trillion worth per year. That's significantly lower than the peak of 28% in 1985 but only slightly below the long-term average of 23% for 1970 through 2006.
China, the second-biggest global producer, doesn't even come close. It makes just 13% of the world's stuff, or $1 trillion worth. Japan is next with 11%. And Germany, the vaunted workshop of Europe, comes in fourth with a paltry 7.4%.
OK, so these numbers are from 2006, the latest data from the United Nations, which keeps track of these things. But China, the hottest contender for factory jobs, has been grabbing jobs from other Asian countries for the most part and not from the United States, says economist David Huether of the National Association of Manufacturers. So the U.S. lead over China in factory jobs may not have changed much since 2006.
Here's other evidence of the strength of the U.S. manufacturing base:
During the previous economic boom, manufacturing contributed more to U.S. growth than any other sector, Huether says.
Though lots of factory workers have lost their jobs in the recession, U.S. manufacturing still employed 12.1 million people as of the end of April.
Factory workers' daily toil contributed to 11.5% of the United States' product last year.
Many U.S. factory workers are big earners, which lets them consume more, contributing more to growth. They made an average of $71,000 in 2007, or 20% more than the average of all other workers combined. States with the most factory jobs are California, Texas and New York.