Manufacturing Output Per Worker Hits Record High
As I reported several days ago that manufacturing employment had fallen below 12 million jobs for the first time since 1941, and that manufacturing jobs as a percent of total employment fell below 9% (see chart above), the lowest percentage ever in BLS history (back to 1939).
The chart below shows manufacturing jobs and manufacturing output, using BLS data on manufacturing employment (data here) and Federal Reserve data on the dollar value of manufacturing output (data here), monthly back to 1972. The general trend over the last 40 years is clear: the U.S. has been producing more and more manufacturing output with fewer and fewer workers.
In fact, at the same time that U.S. manufacturing employment fell to a record low (as a share of the workforce), the productivity of manufacturing workers reached an all-time record high in July of $223,915 (in constant 2000 dollars) worth of output per worker (see chart below). That's almost 3 times as much output per worker as in the early 1970s, and twice as much output per worker compared to the mid-1980s.
Bottom Line: More and more manufacturing output with fewer and fewer workers should be considered a positive trend for the U.S. economy, not a negative development. We should think of it the same way as the trend in farming over the last 150 years - we're much better off as a country, with a much higher standard of living, with 3% of Americans working on farms compared to 150 years ago when about 65% of Americans toiled on farms. If we can continue to produce more manufacturing output with fewer workers, we'll be better off as a country, not worse off.