US (EPI) Studies on Manufacturing

EPI News
Focus on Manufacturing

With layoffs and cutbacks becoming routine, it is tempting to write off U.S. manufacturing as an anachronism. However, a new set of EPI reports shows that actually making things remains an essential part of the economy, and can continue to be a source of good jobs.  

The manufacturing sector supported 14 million jobs in 2007, or about 10.1% of total employment.  A Snapshot developed by EPI economist Robert Scott shows the sector’s importance varies from state to state. California leads the country in sheer output value, producing $169 billion worth of goods in 2006, followed by Texas with $140 billion. However, the relative importance is greatest in Indiana, where manufacturing accounts for 28% of the state’s gross domestic product.

The right policies will not only keep manufacturing jobs in the country, but they can also ensure that they are of high-quality and offer adequate wages and benefits. In her report, Renewing U.S. Manufacturing, economist Susan Helper called for adopting policies “to create a highly productive, high-wage economy” that would contribute to other critical national goals, such as environmental sustainability, energy independence, modernizing infrastructure, and maintaining a defense industrial base. Meanwhile, George Sterzinger of the Renewable Energy Policy Project argued for building a strong domestic manufacturing sector in green energy projects. These papers, along with a background piece by EPI economist Robert Scott on the continued importance of U.S. manufacturing, were presented at a Feb. 13 EPI forum that drew more than 100 spectators. Senator Sherrod Brown (D-Ohio) was the keynote speaker


  • We need to get one of those groups going here in Canada.

    The whole high wage/high value/high everything system has been around for sometime. it still is most likely the best route forward but typically is a quite capital intensive industrial policy type option. With the branch plant, high dollar, free market ideologues on the hill it is difficult to see where the inertia for this strategic choice to globalization would come from. We do have a highly educated and productive workforce, top notch physical and social infrastructure, going for us.

    The whole area of green jobs is just in its infancy and does hold out some great potential. However it needs a lot of attention and nurturing from government. The business world will not make the necessary changes unless regulated. Yes they mught tinker around the edges to legitimize the imagery. In fact I would imagine that corporation currently allocate more resources on environmental image than they put into actual environmental change projects and asset development.

    The governments of the world need to take the lead as the incentive is just not their for the business world. Until standards are develop and products are regulated, the whole notion of green jobs will remain exactly that,- a good idea waiting for the money.

    There are thousands of examples where just having a simple product standard in place backed by a legitimate and effective regulatory regime would help keep jobs right hear in Canada and create export markets for our products. Forest products based upon sound and regulated sustainable forest management practices is one that stands out to me. But again it would take the government to act , and not just at the Canada level. We would need it at least a regional north American level or preferablely global level.

    It would be great to get a good group together and put on some kind of national roundtable discussion on the predicament we find ourselves in.

    It does not sit well with me that the only economic growth in the country is based around one of the most environmentally destructive resource development projects in the world- the tar sands oil extraction process just makes no sense to many but makes lots of cents for a few. I am sure that if a majority of the country knew the facts on this that it would not sit well with them either.


  • One question I’ve been wondering about is, how much of that US manufacturing is civilian? Now, I saw a shocking claim over here a couple of days ago, quoting “Paul O’Neill, former Treasury Secretary of the United States”:
    “To grasp the horror of military Keynesianism, consider this statistic: By 1990, production for the Department of Defense amounted to 83% of the value of all manufacturing plants and equipment in the US. Only 17% of the US manufacturing base actually made products not meant to kill.”
    I was so flabbergasted by this claim that I devoted a blog post to it.
    But it may have painted an exaggerated picture now that I look at the Snapshot you’re referring to. It gives a total of “$1.6 trillion in GDP in 2006” for manufacturing.
    Now the total US military budget even with all the extra hidden and inobvious bits probably isn’t much more than about a trillion dollars a year (officially it’s quite a bit less, but with this and that the basic totals are far from the whole), and despite the heavy weighting of that budget towards toys the budget can’t all be manufacturing.

    It still seems plausible to me that one third or more of US manufacturing output could be for the military. Definitely enough that treating the whole lot as if it were for the real economy is going to leave us with a seriously skewed picture. And still pretty shocking.

  • On of the things to keep in mind is that although manufacturing employment as a share of total employment has been declining in the US, total manufacturing output as a share of GDP has only decrease a touch since the 70s.

    In short it is largely a story of Labour saving induced technological change.

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