Decline in factory jobs is global

July 31, 2012

Free Market Foundation

The common wisdom is that America is haemorrhaging jobs at a record pace to cut-rate competitors elsewhere. But a new report shows that in fact the loss of factory jobs is a global phenomenon, according to the investment house Alliance Bernstein.

According to the report:

From 1996 to 2002, the United States lost 1.95 million factory jobs, or 11.2 percent of its total.

Taken together, the losses of the world’s rich nations including China, Mexico and others supposedly fattening up on U.S. job losses have been equally bad; they’ve lost 22 million, or 11 percent, of all factory jobs.

Around the world, manufacturers have learned to do things better and cheaper with less labour; at the same time, global output has soared 30 percent what the Alliance Bernstein report calls a “remarkable gain in productivity.”

It’s all part of a much longer trend to replace physical labour with technology, and sweat with thinking. More computerised machines, fewer people and greater output.

It means cheaper goods, and better ones, for all. It means those who have skills and education will see more opportunity, not less. It means billions of dollars of capital tied up in obsolete technologies will suddenly be freed for investment in cutting edge technology the kind that makes all of us richer, more productive and, ultimately, happier. It means a higher standard of living for all.

Source: Editorial, Creative Destruction, Investor’s Business Daily, October 21, 2003.

For text (WSJ subscription required) http://www.investors.com/editorial/issues.asp?v=10/21

For more on Economic Issues (Employment) http://www.ncpa.org/iss/eco/

FMF Policy Bulletin\28 October 2003