America’s Manufacturing Advantage

American manufacturing has been bashed as a paradise of the past, but the reality is that it has been doing well over the past few decades.  Because of the negative attention on American manufacturing, it may seem confusing that it is being called stable, but the trick is to look at different areas of manufacturing.

Sub-industries, like textile manufacturing, have been devastated and their situation is depressing, but others like manufacturing of large-scale transportation equipment have stayed stable and are doing fine.  The ultra-specialized industries like electronic manufacturing have done very well and are exceeding expectations.

This means that the decline in American manufacturing has been in the mass employers of medium- and low-skill workers.

America needs to focus on increasing the productivity of its laborers.  They need to learn specialized skills and be able to compete in productivity with Chinese workers who have a huge advantage because of their low cost.

Written by: Toma Karamanolev

Source: http://www.economist.com/blogs/freeexchange/2013/03/labour-markets-2

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