THE IMPORTANCE OF MANUFACTURING IN THE US ECONOMY

It is difficult to underestimate the importance of manufacturing in the US economy. According the 1997 U.S. Economic census, the payroll of the American manufacturing sector is 14% larger than the next two largest sectors (finance and insurance, retail trade) combined, despite having 15% fewer employees[2]! Some have said that other industries, such as financial services and trade will replace manufacturing in the future. An examination of the economic sectors refutes this argument. There are only four economic sectors that generate material wealth: agriculture, mining, manufacturing, and construction. Other sectors, such as services and trade, redistribute this wealth, and are built on the products created by the wealth generators. Of the four wealth-creating sectors, manufacturing plays a unique role because, unlike agriculture and mining, it is not directly limited by natural resources and, unlike construction, most manufacturing products are easily transferable across national and international borders. As a result, manufacturing is and will continue to be the fundamental base for the economic health and security of the United States.

The economic impact of the manufacturing sector is not limited to direct employment of manufacturing employees. A recent University of Michigan study concluded that more than 6.5 “spin off” jobs (including trade, service, and indirect manufactuirng) were created in 1998 for every direct automotive manufacturing job.

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