Productivity Is Major Manufacturing Job Killer: Not Mexico

Politicians from both sides of the aisle are fond of blaming outsourcing and imported manufac-tured goods for U.S. manufacturing job losses. While it is correct that U.S. manufacturing has lost jobs during a period of solid U.S. job growth “the fault, dear Brutus, is not in our stars, but in ourselves.” Between 2000 and 2015, U.S. manufacturing lost 29.6 percent of total sector employment, or 4.7 million production jobs, as the nation experienced a 9.1 percent job gain outside of manufacturing. Over the time period, agriculture lost 76,000 jobs for a 8.5 percent loss. Has any Washington politician recently called for bringing back our lost agriculture jobs? Between 2000 and 2015, the overall U.S. economy, or gross domestic product, expanded by 38.4 percent while the U.S. manufacturing sector rose by a much stronger 58.8 percent. During this period of time, manufacturing productivity expanded at a pace of 4.6 times that of the overall economy. If manu-facturing productivity had expanded at the same rate as the overall economy, the U.S. would lost 2.2 mil-lion fewer jobs. In other words, rising productivity generated manufacturing job losses of 2.2 million between 2000 and 2015. But who were the beneficiaries of the productivity gains? From 2000 to 2015, adjusted for inflation, manufacturing workers’ annual wages increased by 27.9 percent, while manufactur-ing profits expanded from 4.9 percent of manufacturing GDP to 10.6 percent of GDP in 2015.