Opinion and Economic Analysis

HICKS: Manufacturing industry is alive and well

March 10, 2012

It is an election year, and we must steel our hearts against silly utterances in the quest for electoral success. One such fantastic claim is that we must support certain policies so that we can “make things in America again.”

I will leave it to you, gentle reader, to figure out who said that. But I should mention one small problem with that statement: America has always been a place where we make things. In fact, 2011 was a record year for manufacturing in America, as will be 2012 and 2013 (all in inflation-adjusted terms).

Absent an occasional recession, each successive year from here into the foreseeable future will set records. Indeed, the data are clear: American manufacturing has never been more healthy and vibrant. Of course, that is in terms of production—not employment.

The same is true of American agriculture, which shares a similar story. The Midwest was populated primarily by veterans of the American Revolution. The promised 40 acres and a mule saw Ohio, Indiana, Michigan and Illinois explode with small, self-sufficient farms. From the early 1800s until the early 1900s, these modest farms were enough to feed and raise a family. All that ended with the mechanization of farming.

The internal combustion engine drove down the cost of farming, making the small homestead untenable. This helped foster demand for manufactured goods from Maytag washers to Ford Model T’s.

New factories were needed. The South was too poorly educated, the West too sparsely populated, and the East too costly to draw these factories. Serendipitously, the collapse of the small farm in the Midwest meant there was abundant labor with the right skills for those early factories.

The skills learned on the farm and in an eighth grade education were ideal: promptness, industriousness, basic mathematics and good literacy were common. The ability to keep a hit-and-miss engine running or maintain a belt-operated steam thresher was much needed for the factory of 1925. Manufacturing came to the Midwest because we had an abundance of the right workers.

Things weren’t ideal. These men may have earned good money, but women and, in the early days, minorities were excluded. By the 1960s, the relentless pressure of modernization accelerated. What took 1,000 workers to make in 1970 could be done by 250 workers in 2000. In the decade since, U.S. manufacturing production has increased by a third, while the work force has shrunk by a third.

As in agriculture a century before, machines made vast numbers of manufacturing workers redundant. However, unlike a century ago, public education has not prepared new workers for a complex and uncertain future, and other skills that befit a good wage have been unlearned by many.

So, in the quest for electoral success, a candidate plays on the public’s ignorance and offers a chimerical return of manufacturing jobs—if only the votes come his way.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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