July 24, 2017

THE PRODUCTIVITY BOOM:

The US produces 40% more factory output today vs. 20 years ago with 5M fewer workers. (Mark J. Perry, 7/24/17, AEI Ideas)

 The chart above shows that over the last 20 years, the real value of US manufacturing output has increased by 40% (and by $544 billion in 2009 dollars). During the same period, factory employment in the US decreased by 29% (and by 5.1 million jobs). US manufacturing output was near a record high last year at $1.91 trillion, just slightly below the 2007 level of $1.92 trillion, and will likely reach a new record high later this year.

So that's the real story of US manufacturing and the loss of jobs: We'll likely produce a record level of manufacturing output this year, with fewer than 12.5 million factory workers - the same manufacturing employment as in the early 1940s. The US will produce about four times more factory output this year than in the 1940s with about the same number of factory workers! And it's that phenomenal increase in factory worker productivity, thanks to innovation and advances in technology, that explains most of the manufacturing job losses over time. 

Less work.  More wealth.  That's what passes for a crisis at the End of History.

Posted by at July 24, 2017 8:07 PM

  

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