The Stanly News and Press (Albemarle, NC)

December 5, 2012

What happened to manufacturing jobs?

By Eugene Pickler for the SNAP

Wednesday, December 5, 2012 — Now that the election is over, let’s look at one aspect of our economy that generated some discussion in the campaigns — manufacturing jobs. For years we have all heard “we don’t make anything anymore.” We go to many stores and find most goods were manufactured in other countries. It appears if we would make all our products in this country we would have our manufacturing jobs back. Wrong. This is a different world from years ago and we consumers have changed it.

We have many more people and much higher prices than we had years ago, but comparing how we spend our incomes now with what we did in the 1950s gives us a perspective we haven’t seen discussed during the past election cycle.

According to Department of Commerce data a lot has changed. In the decade of the 1950s, the decade I graduated from high school and college, went to work full time and got married, we Americans spent 36 percent of our Gross Domestic Product on consumer goods, most of which were made in American factories. Americans had the most goods ever, but it was a time when we began to want more services.

Services are what we consume and enjoy but can’t hold. Vacations, health care, nursing homes, TV connections, cell phone and computer connections are just a few of the many services we enjoy. Now, compared with previous decades, we are less interested in products we can hold and more interested in being provided with services.  

The Department of Commerce reports in the 1950s services amounted to 27 percent of our Gross Domestic Product while in the last three years services have taken 47 percent of our GDP. During the same period our consumer expenditures for goods have gone from 36 percent to 24 percent. We simply don’t spend as much of our income on “things” as we used to do.  

If we use a smaller portion of our income to buy things, we don’t need as many people to make things hence we need fewer manufacturing jobs.

Now I know we still buy a lot from other countries, but a point I want to make is that manufacturing jobs started to decrease in this country before we started buying so many products from other countries.

One other jobs fact. In the 1950s almost 10 percent of Americans worked on farms. Now it is closer to 1 percent and we are not importing more food. Productivity has increased significantly so we don’t need as many to work producing food and fiber. Having fewer people in the agricultural sector means more people are available to produce the services we want.

In summary, we have lost many jobs in manufacturing due to a change in consumer desires from products to services. Increased productivity in both manufacturing and agriculture has eliminated jobs. Increased consumption of services increases the jobs in food and lodging, in technical skills, in health care and other services.

We have a dynamic and changing economy. The changes weren’t caused by elected officials. The changes were caused by how we spend our money.

It will never again be like it was, no matter who wins an election.