If all manufacturing was done in the U.S. …

A question from Yahoo! Answers:

If all manufacturing was done in the US…?

Over the years, we all know that most manufacturing has been outsourced to other nations because the cost of labor and materials is cheaper than in the US. This in turn keeps prices of products low. The main arguement I hear is that if they were manufactured here, the good would be more expensive.

However, if they moved manufacturing back to the US, wouldn’t the inscrease of jobs, and thus money that can be spent on goods keep the economy stable? More jobs, equals more people spending money?

“Over the years, we all know that most manufacturing has been outsourced to other nations”… Wow… You really need to stop listening to popular press and get your hands on some relevant research. The vast majority of manufacturing jobs that were lost were lost to machines, not to foreign countries, and one country where this process is moving especially fast is… (drum roll) China. In absolute terms, China is losing manufacturing jobs faster than any country in the world; in relative terms, it may be second only to Brazil. The world as a whole is losing manufacturing jobs, and has been doing it since at least 1985.

Manufacturing does not have the significance you ascribe to it. Contrary to popular belief, wages in manufacturing in general are not particularly good (not every industry has a UAW-style collective bargaining agreement in place). In terms of employment, manufacturing is responsible for mere 11% of the U.S. non-farm workforce. All in all, manufacturing is going through the same transition agriculture went through between 1870 and 1970; in 1870, agriculture employed three quarters of all U.S. workforce, by 1970, the figure dropped to about 3%…

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