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March 12, 2012

Manufacturing Is Alive and Well

It is an election year, and we must steel our hearts against silly utterances in the quest for electoral success. 

One such fantastic claim is that we must support certain policies so that we can “make things in America again.” I will leave it to you, the gentle reader to figure out who said that. I should mention one small problem with that statement. America has always been a place where we make things.  In fact, 2011 was a record year for the making of things in America, as will be 2012 and 2013 (all in inflation-adjusted terms). Absent an occasional recession, each successive year from here into the foreseeable future will be a new record year for manufacturing. Indeed, the data are clear: American manufacturing has never been more healthy and vibrant. Of course I mean production, not employment.  The same is true also with American agriculture. Both industries share a similar story.

The American Midwest was populated primarily by veterans of the Revolution. The promised 40 acres and a mule saw Ohio, Indiana, Michigan and Illinois explode with small, self-sufficient farms. From the early 1800s until the early 1900s, these modest farms were sufficient to feed and raise a family. All that ended with the mechanization of farming. The internal combustion engine drove down the cost of farming, making the small homestead untenable. This helped foster a growing demand for manufactured goods from Maytag washers to Ford Model Ts.

New factories were needed. The South was too poorly educated, the west too sparsely populated, and the East too costly to draw these factories. Serendipitously, the collapse of the small farm in the Midwest meant that there was abundant labor with the right skills for those early factories. The skills learned on the farm and in an 8th grade education were ideal. Promptness, industriousness, basic mathematics and good literacy were common. The ability to keep a hit-and-miss engine running or maintain a belt-operated steam thresher were much needed for the factory of 1925. Manufacturing came to the Midwest because we had an abundance of the right workers.

Things weren’t ideal. These men may have earned good money, but the women and, in the early days, minorities were excluded. But by the 1960s the relentless pressure of modernization accelerated.  What took 1,000 workers to make in 1970 could be done by 250 workers in 2000. In the decade since, U.S. manufacturing production has increased by a third, while the workforce has shrunk by a third.

As in agriculture a century before, it was machines that made vast numbers of manufacturing workers redundant.  Unlike a century ago, public education has been insufficient to the task of preparing new workers for a complex and uncertain future, and other skills that befit a good wage have been unlearnt by many. So, in the quest for electoral success, a candidate plays on ignorance and offers a chimerical return of manufacturing jobs, if only the votes come his way.

Link to this commentary: https://commentaries.cberdata.org/614/manufacturing-is-alive-and-well

Tags: manufacturing, election


About the Author

Michael Hicks cberdirector@bsu.edu

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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