By Mark Perry
The chart above shows
annual real manufacturing output per worker from 1947-2011 using data released today by the BEA for GDP by
industry, and data from the BLS on
manufacturing employment. In 1950, the average U.S. factory worker produced
$19,500 (in 2011 dollars) of output, and by 1976 the amount of output per
worker had doubled to $38,500. Output per worker doubled again to $74,400 (in
2011 dollars) by 1997 (21 years later) and then doubled again to $152,800 by
2010, but it only took 13 years for the last doubling because worker
productivity has been accelerating. Last year, manufacturing output per
worker increased to a new record high of $156,500 (see chart), and almost ten
times the output per worker in 1947.
In other words, the
average American factory worker today produces more output in an hour than his
or her counterpart produced working almost a ten hour day in 1947 - and that's
why we're producing record levels of output with fewer workers.
This is an amazing story of huge increases in U.S. worker productivity in the manufacturing sector. In fact, the growth in manufacturing worker productivity more than doubled from 2.63% per year in the period between 1950 and mid-1970s to 5.42% annually between 1997 and 2011. Whereas it took 26 years for output per worker to double during the first period (1950-1976), it only took 13 years during the more recent period (1997-2010).
We are constantly inundated with bad news about the decline in the number of manufacturing jobs in the U.S., but we never hear the good news about why that is happening: Manufacturing workers in America keep getting more and more productive, which then allows us to produce more and more output over time, with fewer and fewer workers. That's a great story about an American industry that is healthy, successful and thriving, and not an industry in decline.
By continually increasing worker productivity and productive efficiency, the American manufacturing sector has been hugely successful at achieving one of the most important economic outcomes of being able to "produce more with less." In the process, those efficiency and productivity gains have helped conserve scarce resources, including human resources, more effectively than almost any other industry, except maybe farming. It's hard to overstate how much the efficiency gains achieved by U.S. manufacturing have contributed to the improvements in our standard of living by making manufactured goods more affordable over time. We should spend less time complaining about fewer workers in manufacturing, and more time celebrating the phenomenal gains in manufacturing worker productivity.
Update: The chart below shows annual real manufacturing output and annual manufacturing employment between 1947 and 2011. Note that manufacturing employment dropped by one-third from 17.56 million jobs in 1998 to 11.52 million in 2010.
This is an amazing story of huge increases in U.S. worker productivity in the manufacturing sector. In fact, the growth in manufacturing worker productivity more than doubled from 2.63% per year in the period between 1950 and mid-1970s to 5.42% annually between 1997 and 2011. Whereas it took 26 years for output per worker to double during the first period (1950-1976), it only took 13 years during the more recent period (1997-2010).
We are constantly inundated with bad news about the decline in the number of manufacturing jobs in the U.S., but we never hear the good news about why that is happening: Manufacturing workers in America keep getting more and more productive, which then allows us to produce more and more output over time, with fewer and fewer workers. That's a great story about an American industry that is healthy, successful and thriving, and not an industry in decline.
By continually increasing worker productivity and productive efficiency, the American manufacturing sector has been hugely successful at achieving one of the most important economic outcomes of being able to "produce more with less." In the process, those efficiency and productivity gains have helped conserve scarce resources, including human resources, more effectively than almost any other industry, except maybe farming. It's hard to overstate how much the efficiency gains achieved by U.S. manufacturing have contributed to the improvements in our standard of living by making manufactured goods more affordable over time. We should spend less time complaining about fewer workers in manufacturing, and more time celebrating the phenomenal gains in manufacturing worker productivity.
Update: The chart below shows annual real manufacturing output and annual manufacturing employment between 1947 and 2011. Note that manufacturing employment dropped by one-third from 17.56 million jobs in 1998 to 11.52 million in 2010.
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