Post World War II, American manufacturing was a formidable force. America used to produce roughly 80% of its consumable goods, but this percentage has heavily declined. America is producing less and people are wondering what has happened to its manufacturing industry.
Manufacturing jobs once made up just over half the economy. This dropped to less than 10% in the early 2000s. One reason for this decline is the increase in higher education. More and more people have embraced the path to higher education after graduating high school. Attending college sets them up for higher paying jobs and greater career opportunities.
However, with more people pursuing higher education, there is a diminished manufacturing labor force. With fewer people entering the manufacturing workforce, there’s no one to give these jobs to. This has led to many companies and businesses outsourcing their manufacturing to other countries.
Globalization and Outsourcing
Perhaps the largest contributor to the reduction of American manufacturing is globalization and outsourcing of manufacturing jobs. Many jobs have been moved to other countries rather than maintaining domestic jobs. In most cases, it’s cheaper to produce elsewhere and it has led to foreign regions becoming specialized in certain industries.
Tijuana is a fast-growing hub for manufacturing in the global supply chain. Many companies outsource to focus on other aspects of their business. If manufacturing is done elsewhere, they don’t need to bother with mundane tasks and can instead focus on their specialties. Additionally, they can hire fewer staff and purchase less space for their business.
Advanced in Technology
Many jobs in manufacturing have declined simply because the nature of manufacturing has changed. Advances in technology have changed how goods are produced. There is more automation in place which requires fewer workers to operate machinery and actively work in the manufacturing process. Automation is far cheaper and it has improved efficiency. Machines don’t need breaks, so they can produce much longer and this increases output. Simply put, manufacturing has changed over the years and this has changed the role the manufacturing industry has taken in the American economy.
Manufacturing once played a major role in the economy, but changes in the economy, the education system, and technology have reshaped America’s manufacturing industry. A majority of manufacturing for American companies is no longer done on American soil and the industry as a whole has been reduced.