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Manufacture, the name sounds facetious. But we are schizophrenics regarding the state of manufacturing in the United States. It seems that all the natural products that we buy in the extended pharmacy to the big box stores come from developing countries in Asia and Latin America, so we believe that manufacturing has left the country and will never return. Nevertheless, recently we hear reports of a “rebirth” of manufacturing, based on anecdotes about the decision of a company to relocate a plant back home and opinion polls. The press also reports that “manufacturing leads to recovery.” No wonder there is confusion!

So what is the truth of manufacturing? The fact is that it never left, he changed due to the merger of the two main trends – globalization and what economists call the “comparative advantage.” Globalization is easy to understand, although not so long ago, it would make us think that India would ever be engaged in the steel and automotive business. The comparative advantage between countries is chiefly about labor costs. This is manifested in products with a high content of labor, which is now manufactured in foreign countries, such as sneakers, clothes, electronics, and even computers. These products are manufactured in factories with low capital costs, designed to take advantage of the momentary low wages in a particular country. When wages inevitably begin to rise in these countries, these manufacturers can quickly move to another state where wages are still low. As these trends evolve, the economic and social landscape has changed, so that the communities that were once anchored in a busy factory now seem to drift from residents traveling long distances to work in diffuse companies.

Manufacturing in the employment industry over sixty years after the end of World War II has declined by twenty-two percent in absolute terms and from thirty-two percent of the total non-agricultural labor force to nine percent. Non-manufacturing employment grew accordingly. These employment trends track the structure of GDP, but manufacturing employment has also been affected by ongoing automation, exacerbating the downward trend. GDP has risen sharply in the years after World War II, and manufacturing has grown by about half of total GDP.

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