Applaud Productivity

by Don Boudreaux on July 14, 2010

in Myths and Fallacies, The Hollow Middle, Trade, Work

Here’s a letter appearing in yesterday’s Washington Times:

In his Monday Opinion column, “Revitalize American manufacturing,” writer Ron Bullock blames “more effective foreign competition” for “the loss of 7 million U.S. manufacturing jobs since 1980.”

This account – repeated ad nauseam – would be more plausible if it were also the case that U.S. manufacturing output, during this same time, had declined. But this output rose. As explained in a new study by researchers at Wells Fargo, U.S. manufacturing output today is nearly 100 percent higher than it was 30 years ago. Importantly, manufacturing output is up while manufacturing employment is down for a reason that is cause not for the pessimism that universally attends accounts such as Mr. Bullock‘s but rather for optimism.

That reason is substantial growth in productivity, which is the only source of sustained and widespread prosperity. So, rather than lament the fact that we get more manufacturing output today by using fewer workers, we should celebrate – in the same way that we celebrate the fact that we get more agricultural output from fewer and fewer workers.

DONALD J. BOUDREAUX

Professor of economics

George Mason University

Fairfax, Va.

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