From 1960 to 1982, manufacturing remained America’s largest employer, and as late as 2000 the third-largest employer. It wasn’t until the 2000s that U.S. manufacturing employment really went into a nose dive, with one out of every three jobs being eliminated. Yet, virtually all economists and pundits attribute this massive decline to superior productivity performance, arguing that as manufacturing became more productive, fewer workers were needed to produce more. In this narrative, all is well.It is disturbing to say the least that on perhaps the single most important question related to the health of the U.S. economy – how healthy is U.S. manufacturing? – the consensus view is so utterly wrong. And because it is so wrong it is lulling the public and policymakers into a sense of complacency and leading policymakers down the wrong road.
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July 7, 2014