Bob - AM Publisher
Aluminum
- Joined
- Jan 28, 2006
- Location
- Cleveland
Unemployment is down to 4.7% according to this morning's paper. That's a low number -- right in the ballpark of where it was during the internet bubble years of the late '90s.
But we all know that manufacturing jobs seem to be disappearing right and left.
Here's some food for thought:
An interesting piece in BusinessWeek last week put it all in perspective. It's by David Huether, who is chief economist at the National Association of Manufacturers (NAM).
Huether says US manufacturing output is up 13% since 2001. that's only half the level of recovery that we experienced after the previous 4 recessions.
But productivity is up 24% in the same period -- 72% higher than after the previous 4 recessions.
In other words, demand for our products is growing slower and our ability to make them quicker/cheaper is growing faster.
The result: we don't need as many manufacturing workers.
This is happening worldwide. He claims China has lost 4.5 million manufacturing jobs since 2000, compared to 3.1 million in the US during the same time. And for the same reason.
In fact, 9 of the top 10 industrialized economies
(US, Japan, Germany, China, Britain, France, Italy, Korea, Canada, Mexico) have lost manufacturing jobs even as their output grows.
Only Italy hasn't lost manufacturing jobs, but Italy is very depressed with unemployment in the 14.5% range and little capital investment going on. So it would seem to be falling behind everyone else right now.
What does it mean? Growth in manufacturing employment is going to depend on 1 thing: increasing demand around the world for American products.
Lately, Huether writes, increasing demand and increasing productivity are closely matched -- so employment is stable. If demand for US goods increases more, we might actually begin to see job growth in the US manufacturing sector.
What does that growth depend on? Huether doesn't say. That's where his column ends.
But to me, the answer seems pretty straight-foward: For us to see new jobs in the manufacturing sector:
1: the value of the US dollar needs to be on the low side -- making it easier for people using other currencies to buy our goods;
2: the quality of US goods must remain high, so people WANT to buy them, even at a slight premium;
3: the opinion of the United States by people in other parts of the world needs to get better, not worse. In other words, if we're going to have an economy that is actually based on making stuff, it really does matter if people in other parts of the world like us.
But we all know that manufacturing jobs seem to be disappearing right and left.
Here's some food for thought:
An interesting piece in BusinessWeek last week put it all in perspective. It's by David Huether, who is chief economist at the National Association of Manufacturers (NAM).
Huether says US manufacturing output is up 13% since 2001. that's only half the level of recovery that we experienced after the previous 4 recessions.
But productivity is up 24% in the same period -- 72% higher than after the previous 4 recessions.
In other words, demand for our products is growing slower and our ability to make them quicker/cheaper is growing faster.
The result: we don't need as many manufacturing workers.
This is happening worldwide. He claims China has lost 4.5 million manufacturing jobs since 2000, compared to 3.1 million in the US during the same time. And for the same reason.
In fact, 9 of the top 10 industrialized economies
(US, Japan, Germany, China, Britain, France, Italy, Korea, Canada, Mexico) have lost manufacturing jobs even as their output grows.
Only Italy hasn't lost manufacturing jobs, but Italy is very depressed with unemployment in the 14.5% range and little capital investment going on. So it would seem to be falling behind everyone else right now.
What does it mean? Growth in manufacturing employment is going to depend on 1 thing: increasing demand around the world for American products.
Lately, Huether writes, increasing demand and increasing productivity are closely matched -- so employment is stable. If demand for US goods increases more, we might actually begin to see job growth in the US manufacturing sector.
What does that growth depend on? Huether doesn't say. That's where his column ends.
But to me, the answer seems pretty straight-foward: For us to see new jobs in the manufacturing sector:
1: the value of the US dollar needs to be on the low side -- making it easier for people using other currencies to buy our goods;
2: the quality of US goods must remain high, so people WANT to buy them, even at a slight premium;
3: the opinion of the United States by people in other parts of the world needs to get better, not worse. In other words, if we're going to have an economy that is actually based on making stuff, it really does matter if people in other parts of the world like us.