Downward Trend in U.S. Manufacturing employment mirrored in other developed nations around the World

[Bill USA]

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/21/this-chart-will-change-how-you-think-about-manufacturing/

This chart, contained within slides of a presentation by Robert Z. Lawrence and Lawrence Edwards promoting their new book “Rising Tide: Is Growth in Emerging Economies Good for the United States?,” is quite something.



What this shows is that the decline in manufacturing as a share of overall employment has been ongoing since the 1960s and 1970s, and has not really picked up pace in recent decades.

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Their book goes on to show that similar declines have happened, at roughly the same pace, all around the world.

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.... the change is due to rapid productivity growth. That is, automation is reducing the amount of labor required to produce a given amount of goods. That means that prices fall. If people respond those price changes by buying more and more of the underlying good, then sales will increase and employment may not fall. But that’s not happened. Instead, people are saving money on manufactured goods and buying more services, instead. That’s led to the decline in manufacturing jobs.
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The second chart does show however, that Germany has managed to keep a much larger share of their employed in the manufacturing sector than the U.S. and other countries.

[bossy22]

1. Germany is in the euro

which is a weaker currency than Germany would have if it was using its own currency. This allows them to sell their goods cheaper which has pretty much allowed them to maintain a very big manufacturing sector.