Economic Outlook n° 1187 | Special Report | The Reindustrialization of the United States
Overview
Like a Phoenix Rising from the Ashes
A turning point?
been of vital economic importance. It has often been the engine of growth, historically providing strong contributions to Gross Domestic Product (GDP). During the nineteenth and twentieth centuries eco- nomic industrial concentrations developed across the U.S. In the South, proximity to cotton growers hel- ped build the textile industry. From the Northeast to the central Midwest, steel and iron products emer- ged and as a result the automobile industry arose in the Midwest. In the Southwest, an abundance of oil and natural gas shaped the energy industry. And in the West, high technology emerged during and after WWII as a product of the defense industry.
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ver since the Industrial Revolution began in the 1800s, the U.S. manufacturing sector has always
However this robust manufacturing economy came under intense pressures in the latter half of the twen- tieth century from the development of the global economy. Countries such as Japan, Mexico and China emerged with enormous supplies of people who were willing to work for a fraction of U.S. wages, while concurrently, American consumers developed a thirst for inexpensive goods from overseas. American businesses could not resist the lure of much lower manufacturing costs available in these countries and began to send U.S jobs overseas, decimating many industries such as appliances, furniture, heavy equip- ment, shipbuilding, steel, textiles, and many others. As a result of this shift, the U.S. manufacturing indus- try shrank drastically as a percentage of the entire