America’s middle class rose on the back of massive industrial output during the 20th century. But this engine of prosperity is being hammered, and the economy is hurting as a result.
For the past 50 years, American manufacturing has dominated the globe. It turned the tide in World War II, and hastened the defeat of Nazi Germany; it subsequently helped rebuild Europe and Japan; and it enabled the United States to outlast the Soviet empire in a Cold War. Concurrently, it met all the material needs of the American people.
During this time period, many American icons were born. Companies like General Motors, Ford, Boeing, Maytag and Levi Strauss became household names. American manufacturing became synonymous with quality and ingenuity. On the back of this industrial output, rose America’s middle class. High-paying manufacturing jobs in turn helped spur a robust and growing economy that had little dependence on foreign nations for manufactured goods and armaments.
However, manufacturing, as a share of the economy, has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent of the economy, and in 2004, it accounted for just 9 percent. In fact, economists are warning that the U.S. is facing the “gutting, hollowing out and closing down of American manufacturing forever” (Benson’s Economic & Market Trends, Feb. 27, 2004).
The loss of the manufacturing industry manifests itself most clearly in job losses. During the 1970s, approximately 25 percent of American workers were in manufacturing (Economist, October 1). From 1990 to present, manufacturing jobs have decreased every single year; since 1996, they have plummeted by almost one fifth.
Most recently, manufacturing job losses, and the “hollowing” out of American manufacturing, have been evidenced in the auto industry. Read the article here.