Monday, January 31, 2011

Transformation of US manufacturing sector

"... The story of American factories essentially boils down to this: They've managed to make more goods with fewer workers.
The United States has lost nearly 8 million factory jobs since manufacturing employment peaked at 19.6 million in mid-1979. U.S. manufacturers have placed near the top of world rankings in productivity gains over the past three decades.
That higher productivity has meant a leaner manufacturing force that's capitalized on efficiency...
What's changed is that U.S. manufacturers have abandoned products with thin profit margins, like consumer electronics, toys and shoes. They've ceded that sector to China, Indonesia and other emerging nations with low labor costs.
Instead, American factories have seized upon complex and expensive goods requiring specialized labor: industrial lathes, computer chips, fighter jets, health care products..."
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Comment: That's right and it's fine, yet how come the trade deficit doesn't go away? Apparantly, the US does not produce enough of these top-notch to compensate for the mass of imports of stupid goods.

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