Manufacturing and Reality
By Arnold Kling
Stephen J. Rose gets it right.
The “problem” with manufacturing is mainly productivity growth that permits fewer workers to produce more goods. As workers are freed from having to produce common goods and services, total output expands greatly. For example, in 1947, food and clothing were 43 percent of what we consumed; the comparable figure in 2007 was 16 percent. The productive gains were distributed into other industries, notably health care, education, business services and recreation. This is a win for the consumer and for the economy.
Recall the chart in Solving the long-term jobs problem that shows the recent rise in manufacturing output while employment in that sector remained flat.