Friday, March 16, 2012

Don’t “Help” Manufacturing! Please!

For decades we’ve wanted the manufacturing sector to be leaner and more efficient, to better compete against foreigners.

This means that manufacturing employment will go down as manufacturing employees become more productive. Just so:

This is a good thing. It’s what we wanted. It’s also a symptom of our past decisions, not a cause for current decisions.

Unless politicians get stupid (or is it stupider ??).

"The trend is increasingly that factories are not assembly lines with lots of people standing around. It's increasingly a lot of machines with fewer workers," said Susan Lund, director of research at the McKinsey Global Institute, the research arm of the consulting firm. "If job creation is your goal, manufacturing is probably not the sector you'd look to."

Multinational companies are increasingly moving production to the U.S., but "the problem is that there are few jobs created by insourcing activity," Wells Fargo Securities Economics Group wrote in an analysis Tuesday.

Manufacturing employment also declined from 2000 through 2009 in Germany by 9% and by more in South Korea, the United Kingdom and Japan, according to McKinsey.

… In the U.S., despite the loss of millions of jobs,factories' output—the value of goods produced, adjusted for inflation—was almost the same in 2011 and 2000.

This is all good news, and both Obama and some Republicans (e.g.,  Rick Santorum) want to do something, anything, to change it.

Read the whole thing in the piece entitled “Economists Assail Campaign Proposals to Help Factories” in the March 2 issue of The Wall Street Journal.

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