Report Details Dramatic Decline in Factory Output, Jobs
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rosion in American manufacturing has been far more dramatic than commonly thought, with sharp declines in both employment and output, according to a new study released by the Information Technology and Innovation Foundation (ITIF; Washington, DC). The study, entitled “Worse Than The Depression: What the Experts are Missing about American Manufacturing Decline,” debunks widely held myths about productivity gains, restructur- ing, and a manufacturing renaissance. It reveals the stark reality of a historic decline in US competitiveness and unprecedented deindustrialization. The report said that what the United States is experiencing is not merely another boom-and-bust cycle but a structural decline more akin to what Britain experienced in the 1960s and 1970s when it lost its industrial leadership. “What we discovered flies in the face of nearly all the reporting and commentary on manufacturing and reveals a
ies from recessions after World War II, the recent rebound in manufacturing has been far weaker than portrayed by recent news reports and comes off the steepest decline of any post- war recession, the report contends.
Despite the sobering findings, the report also emphasizes that manufacturing is still critical to America’s economic future. Manufacturing still adds $1.6 trillion to GDP and employs nearly 12 million people. ITIF emphasizes that policy changes such as a more competitive corporate tax code, increases in funding for manufacturing-focused R&D and programs to train manufacturing workers, and increased efforts to fight unfair or illegal trade practices can stem the tide and help restore the U.S. manufacturing base. “America needs to wake up to the fact that a series of grave policy errors have left us a production foundation that is too weak to support the kind of economy we need to build.
“America needs to wake up to the fact that a series of grave policy errors have left us a
production foundation that is too weak to support the kind of economy we need to build. We will need new policies to build a new manufacturing foundation.”
disturbing truth,” notes ITIF President Robert D. Atkinson, the report’s chief author. “US manufacturing jobs have been lost not simply because the sector is more productive. It is producing less. And unlike some high-wage nations, America is not replacing low-value-added manufacturing with high- valued-added manufacturing or opening new plants to replace closed ones. There is difference between restructuring and decline. American manufacturing is in decline.” From January 2000 to January 2010, the U.S. lost one- third of its manufacturing jobs, almost 5.5 million jobs, the report cites. This is likely the highest rate of manufacturing job loss in American history, ITIF notes, exceeding even the rate of loss in the Great Depression. In addition, economy- wide job losses in the last decade were far more concen- trated in manufacturing than during the Great Depression. But unlike the period after the Depression or in the recover-
We will need new policies to build a new manufacturing foundation,” says Atkinson. “This is a central economic task for America for this decade.”
ITIF also recently released its “Charter For Revitalizing American Manufacturing,” proposed by Atkinson and signed on by 18 organizations’ CEOs, including Mark Tomlinson, executive director/CEO of the Society of Manufacturing Engineers (SME), detailing steps for industry to take toward development of a national manufacturing policy. For more information, visit www.itif.org, or to download the report, go to http://tinyurl.com/memediareport1.
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