Is Manufacturer's Demise Really Just Fake News?

Despite news to the contrary, U.S. manufacturing is far from being in decline. It's true that 5.6 million manufacturing jobs left the United States from 2000 to 2010. However, American factories still have a lot to offer the global economy, according to Stephen Gold, president and CEO of the Manufacturers Alliance for Productivity and Innovation.

1. The World Still Needs U.S. Manufacturing

Economists argue that because there are cheaper goods coming out of other countries, no one needs American factories any more. Fortunately, U.S. manufacturing relies on innovation thanks to technological advancements found in American factories. Robotics, automation and the Internet of Things all contribute to better products made overseas because these innovations trickle down to overseas factories. Innovations create better exports that come from American soil.

Exported goods account for 65 to 70 percent of U.S. exports, so American manufacturing is hardly in decline. These goods travel all over the world, drive the global economy and help keep the U.S. trade deficit low. If there were no factory exports, Americans would be in much worse shape financially as a society.

2. Factories Still Need Workers

U.S. manufacturing does have some challenges to overcome when it comes to innovations and workers. The skills gap indicates entry-level workers don't have the skills to take on manufacturing jobs. These positions need more science- and technology-based skills. Unfortunately, there is a misconception that factory work consists of grunt work, hard labor and low pay.

Manufacturers typically pay employees better than other sectors of the U.S. economy, and workers have more stability, with lower turnover and lengthier job tenures. A manufacturing employee stays with a job an average of 5.3 years versus 3.7 years for the entire private sector labor force. The trick is getting younger people to take engineering classes in college to get people interested in STEM-based jobs available in factories. These STEM skills can lead to high-paying careers in U.S. manufacturing and not just jobs that last five years.

3. Valuable for American and Global Economy

American factories produce $2.2 trillion in value, second only to China in the world and more than the entire economic output each of Italy, Canada, Brazil and India. In terms of the entire, worldwide manufacturing activity, the United States accounts for 17 percent of that output versus 7 percent for Japan and 6 percent for Germany.

With regards to the overall American economy, manufacturing is responsible for $5.5 trillion of economic activity. That includes the upstream supply when manufacturers buy raw materials and parts along with sales to customers. To further bolster the case of manufacturing prowess in the United States, the country is a world leader in automotive, aerospace, machinery, food processing, plastics and pharmaceuticals.

U.S. manufacturing continues to be a solid rock as the economy grows in 2017. To take this part of American jobs to the next level, companies need to shake off the misconceptions that working in factories is a bad career choice for the next generation of workers.

Photo courtesy of Mark at Flickr.com