Is Trump Right About Manufacturing?

Presidential candidate Donald Trump recently told Chris Wallace of Fox News that Americans “don’t make anything anymore.”  Oh really?  That might be news to the 10,000 workers at the BMW plant in Spartanburg, South Carolina, who manufactured 364,000 vehicles in 2014, 70% of which were for export.  It might also come as a surprise to the 30,000 Boeing employees at the company’s Everett plant, who have delivered about 3,600 airplanes to “customers around the world.”

The reality is that while manufacturing output has continued to grow more or less unabated since World War 2, both manufacturing’s share of GDP and manufacturing employment have declined.

You can see clearly this latter trend in the chart below (the earliest common start point for data).

So what is the explanation for this?

As Veronique de Rugy wrote not too long ago, the reality is that the American economy has become much more productive because of technological breakthroughs, so fewer workers are required to produce greater quantities of manufactured goods.  She writes that, compared to 1975, the “average American manufacturer is over three times more productive than they were.”

Bottom line:  the American economy is still producing in great quantities automobiles, airplanes, and many other things, and the fact that it requires fewer workers to do so means that labor is freed up for other pursuits.  We can all benefit from that.