Despite mainstream media and urban myth, America remains the largest manufacturer in the world
It's amazing how much information is at our fingertips on the internet, yet MOST Americans continue to believe misinformation and myth about American manufacturing and how it relates to our “mythical decline” and China.
The biggest myth around- and one can easily observe from the majority of blogs and public comments following mainstream media stories- that America has “outsourced” “ALL” of its manufacturing. That China manufactures more than the USA, that America has NO industrial base to speak of, and ALL our manufacturing jobs have gone overseas. We have replaced our industrial jobs with burger flipping.
Here is just a recent example from a blog quote (May 16 2010) ” America has virtually no manufacturing left, we are beholden to China for “all” our manufactured goods, we have no industry remaining.”
NOTHING COULD BE FURTHER FROM THE TRUTH.
Even a cursory glance at manufacturing stats on the internet or the world almanac sitting on your shelf would reveal these statements as being as ridiculous and misinformed as the global warming garbage.
Here are some simple facts: America, by far, remains the worlds leading manufacturer- yes much bigger than China. American industry produces over 20% of our GNP (2.8 Trillion dollars) of which manufacturing accounts for 1.8 Trillion dollars (1) No one matches America's manufacturing base- not Germany not China not Japan. Manufacturing still accounts for 12% of employment (23 million jobs) which doles out high wages and excellent benefits. Manufacturing leads in R&D investment and most US manufacturing is American designed, engineered, materials, by American workers using American packaging and transportation.
If American industry was a countries economy alone- it would be the Fourth 4th largest economy in the world, if our manufacturing sector was a countries economy- it would be the Eighth 8th largest in the world.
The cheap and easily manufactured products are made overseas, they pay many times less wages, usually little to no benefits and are of much less value added to their economies. Workers in low wage countries produce the lowest quality, lowest productivity, least innovation and care of any workers compared to the industrial West. BMW even reported in 2009 that their vehicles produced in the US had less quality problems than those produced by BMW in Germany itself !
Americans seem to forget that we produce the high tech, highest value-added products, which require high quality manufacturing, state of the art design and ground breaking technology- ONLY America delivers this. For example, Americans don't realize the gigantic web of factories and suppliers that still exists throughout America. Look at John Deere, even in the worst year of 2009, they exported 16 billion dollars worth of tractors that were manufactured in the USA and this year they will EXPAND production in both their tractor and combine-harvestor plants in America !
People forget that high precision instrumentation and silicon industry (Intel, AMD, Cisco) and electronics of America are the most sought after in the entire world (Microsoft, IBM, Oracle, Apple), leading to increasing production and sales in that sector of American manufacturing.
America is the LEADING manufacturer of autos (2), precision instruments, telecommunications, software (Microsoft), chemicals (DOW), food processing (Tyson, Kraft, Pepsi) aerospace (Boeing, Mcdonnel Douglas, Honeywell, Bell, Lockheed) defense products in the entire world. The US simply remains, by far, the largest by unit volume, sales or value-added industrial and manufacturing nation in the world.
Is manufacturing on a slow decline relative to post-industrial services- yes, are we losing jobs in manufacturing relative to other sectors- yes- however, overall, in absolute numbers manufacturing CONTINUES to GROW in the US, doubling from 1987 to 2009 from $811 billion to the current $1.8 Trillion. In addition, don't get confused by manufacturing employment and manufacturing industry. Most factories in America have already long ago shaken out production which could not compete with low wage countries- sectors like clothes, shoes, cement, etc. Today, losses in manufacturing jobs are not, by majority, the result of outsourcing- but by increased productivity, better management, high tech lean inventory control, robotics and automation. In the long run that's GOOD ! It means stronger factories maintaining their “comparative” and “competitive” edge over other nations.
Leading manufacturing design, innovations, patents and industrial R&D investment remains in America by and for American workers.
Even though industrial output is only 20% of our economy, it's larger at $2.8 trillion than China's $2.4 trillion even though that represents 50% of their economy !
There is also a clear, apple and oranges analytical framework to be made when comparing Chinese and American manufacturing. Chinese production is at the bottom of the evolutionary scale of production, America is at the pinnacle ! As we all know, Chinese manufactured goods are of the lowest quality in the entire world- producing exploding tires, poisonous drywall, tainted baby milk and pet food, hazardous toys, etc etc. Chinese factory workers are uneducated drones living in stinking bunk beds under the fuming smokestacks, eking out a living like 18th century English hobbits ( I know, I've lived in China over 3 years and have taken many a tour of them in Southern China.) To make a given product, it takes several Chinese workers- because of low productivity (yes read lazy) and lack of education and initiative to produce what one western worker produces. These are just among many reasons why China lags so far behind in high tech and aerospace. China depends on foreign expertise in China to keep their manufacturing base going and stealing designs from the West even today- to be able to market their products. Chinese innovation in manufacturing is almost non-existent.
Another major factor to realize about Chinese manufacturing although large, second to America or Germany, is almost 65% of it still remains in government hands- and are usually loss making. In other words, much of China's old-economy factories of steel and white goods, etc. have no buyers, are bankrupt and kept alive on subsidies to prevent sudden, regional and or massive unemployment.
China is often considered today to be the “factory of the world.” Hogwash, the USA, Japan, Canada, Mexico, Germany, France and Italy remain the “factory of the world” producing and exporting $3.8 Trillion dollars of goods versus $1.2 Trillion by China. It only “seems” that China now produces everything that people buy around the world because those products are highly visible consumer products like clothes and shoes, plastic goods, etc. People ignore the “comparative” advantage of America to produce goods no one else in the world can (read up on your Michael Porter to understand this better) and ignores the evolutionary chain and progression of modern production, i.e. China at the bottom, America at the top. Americans can't seem to get it out of their minds that we should still be producing such low-value products as T-shirts, tupperware bowls, cement, staplers, etc.
Many American products are not highly visible, think of your home- where almost all major elements are American made by American workers. The cost of a home weighs more in the economic formula than all your DVD players, shoes and T-shirts combined. Think of the lumber, re-bar, drywall, shingles, tiles, pipes, wiring, etc. etc. that are produced in America and then put together by American workers (including some illegals- but not for long in Arizona !) – but by and far- the tradesmen are Americans. Think about the majority of the cars that are produced in America- and don't' think about BMW, Toyota, Honda- most of those are produced in American factories not Japan ! Think about the jets you fly- American made, the elevator and escalator- (Otis) which are all highly engineered top of the manufacturing food chain products. Americans, writers on Nolan and mainstream media continually ignore these startling and glaring facts of the continued dominance of American manufacturing.
The myth of American manufacturing may continue in the media and even here on Nolan chart, but the facts will blow you away !
(1) Manufacturing is a subset category of industry. China's manufacturing numbers includes “activities” such as natural resources, extraction, transportation, which are not- by definition, manufacturing, therefore, even the manufacturing aggregate numbers posed by China is in reality- smaller because of this inclusion of non-manufacturing activities.
(2) China has temporarily exceeded “numbers” of autos produced, but by weight (tonnage) China is far behind. Almost half of their autos produced are so small and light weight, they would not even be allowed on US highways. And of this, most of these vehicles are purchased by the Chinese government or by SOE's State Owned Enterprise- so, it's comparing apples and oranges in terms of vehicle production.Tweet
Latest posts by James Luko (see all)
- Syrian Debacle - October 7, 2015
- The coming WAR - September 3, 2015
- BOYCOTT NBC- NBC Elitism - June 30, 2015
- Chinese rise or Chinese DEMISE? - June 16, 2015
- Recognition of Cuba ONLY if we know Cuba did not assassinate JFK - June 5, 2015
- DON’T FEAR a Russian-Chinese Alliance - May 6, 2015
- Keep Cuba CLOSE, Keep China FAR - April 12, 2015
- Wall Street Surprised at Strength of Dollar - April 5, 2015
- Is America in Decline? Twenty signs America is not in decline. - March 6, 2015
- Two Steps for Putin; Go East and Diversify! - March 2, 2015
- Saudi tries to BREAK the American oil boom; tries to keep America as an oil SLAVE - November 7, 2014
- Dollar Bulls Surge Ahead - October 5, 2014
- Where will Scotland go? - September 16, 2014
- The “Obama Doctrine” Creates A Global Power Vacuum - May 30, 2014
- The IRON TRIAD; A Regional Plan for the Containment of China on the heels of Obama’s Asian tour - April 30, 2014
- If Putin takes ALASKA back will Obama finally REACT? - March 17, 2014
- RUSSIA INVADES: Military THRUST to the WEST - March 2, 2014
- AMERICA the BEAUTIFUL: Real Patriots Don’t Bash America - February 16, 2014
- CARTER REVISITED - February 4, 2014
- America’s Asian Pivot:Full Spectrum Dominance in Asia - January 4, 2014
- Bad Tidings and No Joy, Sarah Palin Defrauding the Heart of Christmas A review of Ms. Palin’s latest book. - January 1, 2014
- WHITE SWAN: United States of America 2014 and Beyond - December 26, 2013
- Quantitative Easing:Act III Maintaining Geopolitical Hegemony - November 23, 2013
- FIAT currency Trounces Gold - November 17, 2013
- Saudi Refuses Security Council Seat..thats GOOD! - October 20, 2013
- Obama DUPED TWICE! - September 28, 2013
- Global Warming Predictions Face Another Failed Year - September 7, 2013
- SYRIA and American Success in Iraq and Afghanistan - September 1, 2013
- China's Crossing the Line - August 16, 2013
- Paul Ryan - August 15, 2012
- Syrian Conflict: The Minority Elite Alawi vs The Majority - July 14, 2012
- Nuclear Deterrence- USE IT - February 21, 2012
- Keep The Nukes - November 7, 2011
- Fractional Reserve Banking and America's Standard of Living - August 21, 2011
- Gold Standard Would Ruin Us - August 14, 2011
- Clean Up Your Own Act Before You Throw Stones ! - August 7, 2011
- The Gold Standard, Printing Money and the Federal Reserve - July 23, 2011
- China and Russia Angry at USA - July 15, 2011
- 4th of July, Americas Waterloo? - July 4, 2011
- China's Moves on Cuba Need to Be Stopped - June 29, 2011
- The Dollar as the World Reserve Currency: Voice of a Contrarian - June 29, 2011
- America's attack on Libya is Geopolitically and Strategically counterproductive - March 29, 2011
- US to participate in Libyan No-Fly Zone ? - March 10, 2011
- Man-made Global Warming TheoryAGW - March 3, 2011
- Natural Climate Change Deniers - January 10, 2011
- North Korea Attacks: World War Three ? - November 24, 2010
- CONTAIN CHINA; The LUKO DOCTRINE - November 19, 2010
- What is really behind Obama's BIG trip to India ? - November 16, 2010
- Global Warming or Global Farce? - September 28, 2010
- GERMANY: Our Unreliable Partner in Defense - May 21, 2010
- Made in the USA: Still Number One ! - May 16, 2010
- Is China’s GNP Number Accurate - December 19, 2009
- China Eclipses U.S. Auto Sales – Oh Really? - December 2, 2009
- SARAH PALINMissing the Point - November 23, 2009
- KARADZICNo Show - October 27, 2009
- BULLISH on the Dollar - October 16, 2009
- Dump the Dollar ? - October 9, 2009
- Afghanistan: Conquer and Garrison - September 27, 2009
- KARADZIC: JUSTICE DENIED - September 24, 2009