Manufacturing in America Today
Nearly everything we use in our modern lives is manufactured. From the sheets we sleep on, our breakfast toaster, the car we drive to work, our office furniture and so on; its all manufactured. Contrary to popular belief and media reports, manufacturing in America is alive and well. Manufacturing remains a vital part of the American economy.
If economic activity due to manufacturing in America were treated as a separate entity, it would be the worlds 8th largest G.D.P. [i] Percentage wise, Americas share of global manufacturing has remained nearly the same as in 1980 at around 22%. [ii] Even in 2010 at the deepest point of the current business cycle, the U.S. remained the worlds largest producer of manufactured goods.
So where have all the manufacturing jobs gone? To answer that, look no further than your dinner plate. In 1900, over 38% of the 24 million active workers in the U.S. population worked in agriculture. By 2000, that number had dropped to 1.9% [iii] [iv] of a working population of over 142 million. Was there widespread starvation in the U.S. in 2000? No. Through productivity and technological innovation, we no longer needed to have as many people employed in agribusinesses to grow and process the food that we all enjoy.
Likewise, manufacturing employment peaked in the early 1950s at around 34%. [1] Today, manufacturing employment is approximately 9% of the 153 million Americans in the workforce. Automation and productivity increases are the largest contributor to the downward trend. [v]
Some may ask, haven't all the good manufacturing jobs moved overseas because of cheap labor? It is true that many jobs in manufacturing have shifted to locations outside the U.S. in the past ten years. However, direct labor typically represents only between 3% and 12% of the cost of a modern manufactured product. While many companies initially believe they will reap significant savings by outsourcing, their accounting systems do not adequately capture indirect expenses such as long supply chains, additional shipping, inventory costs, and additional quality inspections. Over time, these costs become painfully obvious to companies, which is why many of those jobs are returning to the U.S.
In Central Oregon
- There are a few 300 employee manufacturing companies.
- However- there is an ever growing number of 10-30 employee manufacturing companies.
- When these smaller 10 man companies hire, hiring 1 new employee is 10% of their work force!
- Having a degree or certificate from the MATC can make a difference in you getting that job!
Manufacturing Technology Degrees and Certificates
[1] Actual Manufacturing jobs peaked in 1979 at ~19.5 million jobs but as a percentage
of the workforce, that only represented around 22%.
[i] The Facts about Modern Manufacturing, 8th Ed. National Association of Manufacturers, 2009 page 2
[ii] The Facts about Modern Manufacturing, 8th Ed. National Association of Manufacturers, 2009 page 14
[iii] U.S. Bureau of Labor Statistics, January 30, 2003
[iv] The 20th Century Transformation of U.S. Agriculture and Farm Policy / EIB-3 Economic Research Service/USDA June 2005
[v] What Accounts for the Decline in Manufacturing Employment? David Brauer, U.S. Congressional Budget Office Updated February 18, 2004 from www.policyalmanac.org