Manufacturing in the United States

Manufacturing in the United States is a vital sector. Manufacturing jobs helped build out the U.S. middle class after World War 2, as the U.S. established pro-labor policies and faced limited global competition. Since the 1990's, several trends, such as the rise of China, globalized free trade, and supply chain innovation, have arguably resulted in the off-shoring of thousands of U.S. manufacturing facilities and millions of manufacturing jobs to lower-wage countries. Experts continue debating the merits of free trade versus protectionist positions, with job creation or preservation in the manufacturing sector an important topic in the 2016 U.S. presidential election.

The U.S. manufacturing industry employed 12.4 million people in March 2017, generating output (nominal GDP) of $2.2 trillion in Q3 2016, with real GDP of $1.9 trillion in 2009 dollars. The share of persons employed in manufacturing relative to total employment has steadily declined since the 1960's. Employment growth in industries such as construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing’s overall share of U.S. employment. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991.

Since the entry of China into the World Trade Organization in December 2001, the decline in manufacturing jobs has accelerated. The U.S. goods trade deficit (imports greater than exports) with China was approximately $350 billion in 2016.

The Economist reported in January 2017 that manufacturing historically created good paying jobs for workers without a college education, particularly for men. Unions were strong and owners did not want to risk strikes in their factories due to large capital investments. Such jobs are much less available in the post-1990 era in the U.S. and other developed countries, leading to calls to bring those jobs back from overseas, establish protectionism, and reduce immigration. Manufacturing continues to evolve, due to factors such as information technology, supply chain innovations such as containerization, companies un-bundling tasks that used to be in one location or business, reduced barriers to trade, and competition from low-cost developing countries such as China and Mexico.

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