It's a Good Sign that Manufacturing Jobs are Declining

Economics is as “dry as toast” to use the memorable phrase from My Big Fat Greek Wedding. But someone has to explain it because lives depend on governments getting with the economics program. Right now Zimbabwe is suffering from runaway inflation. Why is that not surprising, when the Mugabe government has done everything possible to wreck the economy?

Economics Professor Walter Williams is willing to do the dirty work of explaining economics, even the vexing question of the decline in manufacturing jobs. You know. Outsourcing.

Everyone is worried sick about the decline in manufacturing jobs. Is it a bad thing? Or not?

Williams cites the vexing question of the decline in farm jobs. You are worried about manufacturing jobs going away? Look what happened to farm jobs.

In 1900, 41 percent of the U.S. labor force was employed in agriculture. Now, only 2 percent of today's labor force works in agricultural jobs.

Well, what do you think, Senator? Good or bad?

Good, right? Because farmers today are much more productive than they were a century ago. We need fewer people on the farm to grow our food. That means that instead of people working on the farm they can work other jobs. That way we get a two-fer. We get the food production from the farms and also the work from people who would have been working on the farm a hundred years ago.

That is what is happening in manufacturing.

Since 2001, with the aid of computers, telecommunications advances, and ever more efficient plant operations, U.S. manufacturing productivity, or the amount of goods or services a worker produces in an hour, has soared a dizzying 24 percent. That's 72 percent faster than the average productivity advance during America's four most recent recession-recovery cycles dating back to the 1970s. In short: We're making more stuff with fewer people.

And guess what. Manufacturing employment is going down all over the world, including the countries

who produce 75 percent of the world's manufacturing output (the U.S., Japan, Germany, China, Britain, France, Italy, Korea, Canada and Mexico).

But what will all the manufacturing industry workers do? Well, they will get to do other stuff. Some of them will experience hardship, of course, especially those in unionized industries like airlines, autos, and steel, where wages were artificially high due to union monopoly power.

The bottom line is that the US workforce is at an all time high, according to the Bureau of Labor Statistics, over 150 million strong, and unemployment is down to 4.7 percent. Wherever it is that those jobs are flying to, they aren’t flying far.