Mile High View

Productivity Eliminates Jobs

“All of our jobs are going to China.”
“Everything is made in Taiwan.”
“Nothing is manufactured in the United States anymore.”

I hear those sayings a lot. Don’t you? I want to set the record straight. Since 1979, the United States has lost over 8 million manufacturing jobs. It may seem like those jobs are going overseas, but it doesn’t quite work that way. Yes, some manufacturing jobs are going overseas. But not as many as you would think. In 2007, just before the Great Recession, the United States produced more manufactured goods than ever before. We produced more goods than any other country. In fact, we produced just over one-fifth of the manufactured goods in the world.

Then why does it seem we’ve lost manufacturing jobs? Because we have. Productivity has eliminated jobs. For every $1.00 of product a person produced in 1967 they are now producing $3.82.

Job market shifts have occurred throughout history. Productivity consistently creates them. In 1850, there were 23-million people in the United States. Eleven million of them were employed on the farm. By 1900, the United States grew to 76 million people, but only 20 million of them were farmers. The introduction of tools like tractors, combines, and more efficient forms of transportation increased productivity and shrunk farm industry jobs by 33 percent in just 50 years. Less people were needed to produce more. By 2004, only 1.6 million people worked in the farming industry. Yet, they produced 600 times as much food as the United States did in 1850.

In 2007, 29 million people were terminated by being laid off or retiring. But, 31 million people were also hired. Most of the 29 million jobs were eliminated and most of the 31 million jobs were completely new.


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