Dani Rodrik on manufacturing productivity

Labor productivity in US manufacturing has grown nearly sixfold since 1950, compared to a mere doubling in the rest of the economy. The result has been a striking increase in the manufacturing sector’s ability to produce goods, but also an equally dramatic decline in its capacity to generate jobs. While value added in manufacturing (at constant prices) has broadly kept pace with the rest of the US economy, six million manufacturing jobs have been lost since 1980, while 73 million non-farm jobs have been created elsewhere (mainly in services).

When Donald Trump took office in January 2017, the share of US manufacturing in non-farm employment was 8.6%. When he left office, that figure had fallen to 8.4%, despite his attempt to shore up employment through import tariffs. And despite Biden’s significantly more ambitious efforts, manufacturing employment has dropped further, to 8.2%. The decline in manufacturing employment as a share of total employment (even if not in absolute terms) seems to be an irreversible trend. 

~ Dani Rodrik, "America's manufacturing renaissance will create few good jobs," Project Syndicate, April 22, 2024