In response to this poorly-researched and factually-inaccurate article in the Chronicle, I sent the following letter:

re:  Manufacturing comes back to life

In his article on the bounce-back of the US manufacturing sector following the recent recession — a rebound he finds "improbable" in a sector he considered "all but dead" — Mr. Don Lee makes misinterprets some data and ignores facts that lead him to misstatements about the state of American manufacturing prior to the recession.  A visit to the websites for the Federal Reserve, the Bureau of Labor Statistics, and the Bureau of Economic Analysis paint a different picture of American manufacturing over the past 35 years.

First of all, while the number of people employed in manufacturing has been decreasing in the US (peaking in the late 1970s), manufacturing output has increased by over 200%, and that's including data collected following the economic downturn (output having peaked in 2007).  The difference is that worker productivity has dramatically increased — each individual worker produces more thanks to technological innovations such as computers, automation, etc.  That's certainly not the performance of an "all but dead" industry segment.

Mr. Lee seems to make the assumption that because the total share of the economy relating to manufacturing dropped (along with employment), that this signifies a decrease in actual manufacturing.   But since 1979, our economy has diversified greatly.  Reaping the benefits of increased productivity, we spend less on manufactured goods and more on computers, software, and other technology that wasn't even available (or at least as readily so) in 1979.  Americans are still employed "making things people want to buy", it's just a broader diversity of things.

The US economy may or may not "replac[e] the 2 million-plus factory jobs lost in the past two years", but that's not the only way for manufacturing to continue to grow.  Capital investment in new equipment, buildings as well as investment in technology, research, or development can help develop a company's production capacity and productivity, as well as benefiting associated industries and enable a business to be take advantage as the economy rebounds.

Rather than relying on government subsidies, incentives, import tariffs, or tax credits that favor one company or business activity over another, the government should rather just remove disincentives to investment and profitability.  Lower taxes on corporate income and capital investment help make activity more profitable, and lets an individual company decide what mix of activity makes the most sense instead of putting those decisions in the hands of politicians and bureaucrats.

Sincerely,
Dave Smith
Houston, TX

The data about increasing manufacturing output referenced in the above letter are especially poignant when viewed as a graph:


Politicians on the left and the right love to talk about how corporations are "shipping jobs overseas" and about the supposed decline of our manufacturing segment in the United States.  They use these claims to engender support for punitive taxes, or for protective tariffs and targeted tax incentives that favor politically well-connected businesses and industries.  The facts point otherwise:  manufacturing in the US continues to increase in output and productivity.