Manufacturing, Trade, and Automation
Economics Without The B.S.**:
[** Double entendre intended.]
Manufacturing employment and automation: Did NAFTA and China contribute to the decline in manufacturing jobs? Quick answer: NAFTA - No; China - Yes
If automation is taking manufacturing jobs then the productivity of manufacturing (output per worker, not the output per manufacturing sector) should be increasing as more automation takes over. But productivity peaked around 2003 and has mostly been in a downward trendline.
During most of the 1990s, under NAFTA, jobs remain steady (around 17 million) while the trendline for productivity has a slight increase. In the late 1990s, after the financial crisis in Asia, the Asian countries decide to become net exporters and it has an effect on the U.S. economy. And in 2001 China gets international trade status with WTO and you see the decline in U.S. manufacturing jobs from approximately 16 million to 14 million jobs up to the Great Recession starting in December 2007 and then another loss of 2 million jobs during the Great Recession (through June 2009); and, most of the trendline for manufacturing productivity since 2001 is flatlined to declining.
https://fred.stlouisfed.org/graph/?g=d9Y5
Industrial production (manufacturing output) and capacity utilization. Capacity Utilization of 75% to 80% is considered good; the 1960s, at over 90%, is the best peacetime performance in U.S. history.
Industrial Production growth is good each decade, 30% to 50%, from the 1960s to 2000; and, this is with employment steady at around 18 million in the workforce. After 2000 growth flatlines -- except for coming out of the recession of 2001 where it grows at 15% but only gets back to where we were in 2000. And keep in mind that duiring Bush's Administration we had two big tax cuts and the repatriation of U.S. corporate foreign profits back to the U.S. with little to show for the investment in our manufacturing sector.
https://fred.stlouisfed.org/graph/?g=d9ZM
Industrial Production and Manufacturing Jobs:
https://fred.stlouisfed.org/graph/?g=dafA
