Steve Jobs and Manufacturing Jobs

by Elaine Schwartz    •    Jan 23, 2012    •    639 Views

A friend recently said to me, “The U.S. just doesn’t make anything anymore.”

But we do. It’s just harder to see it.

To observe contemporary U.S. manufacturing, you could go to Greenville, South Carolina. At an auto parts factory making precision parts, the typical skilled worker uses a computer to run a machine, knows calculus, trigonometry, algebra and programming language. To be hired, he also needed formal technical instruction and previous on-the-job experience. By contrast, having had minimal training and education, the unskilled worker interviewed in this Planet Money podcast placed parts in molds and then removed them.

The bottom line? Employing more high technology and fewer people, U.S. manufacturing output is steadily growing. However, if the operation is insufficiently cost effective, it will leave.

This takes us to Apple. When Steve Jobs had dinner with President Obama during 2011 and told him that Apple’s jobs in China will never return, his message was a reality check.  Skilled workers will earn more and work more here while the opportunities for the unskilled move beyond U.S. borders.

The Economic Lesson

In “Race Against the Machine,” MIT researchers Eric Brynjolfsson and Andrew McAfee explain the structural change that the U.S. economy is undergoing.

Currently 9% of the U.S. labor force, the number of manufacturing jobs has plunged since 1999.

In 1960, the 3 largest U.S. employers and the number of people who worked for them were:

  • General Motors (595,200)
  • the Bell System/aka AT&T (580,400)
  • Ford Motor (260,600)

During 2010, the top U.S. employers and their employees:

  • Walmart (2,100,000)
  • Kelly Services/office temps (538,000)
  • IBM (426,751)

An Economic Question: Comparing 1960 to 2010, what type of fundamental, structural change has the U.S. economy experienced?

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