Manufacturing

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The manufacturing sector of the U.S. economy has experienced substantial job losses over the past quarter century. In January 2004, the number of such jobs stood at 14.3 million, down by 3.0 million jobs, or 17.5 percent, since July 2000 and about 5.2 million since the historical peak in 1979. Employment in manufacturing was its lowest since July 1950.

While improvements in manufacturing productivity, and a shift in consumer habits that has shown reduced spending on manufactured goods relative to services, a key element of this change has been offshoring of manufacturing jobs.

The impact of declining manufacturing employment has not be uniformly distributed across the United States. Instead, it has had been concentrated in the Rust Belt with devistating effects. Cities like Buffalo, New York, Pittsburgh, Pennsylvania, Detroit and Flint, Michigan, Gary, Indiana, Toledo, Cleveland and Youngstown, Ohio, and Milwaukee, Wisconsin has seen their economies collapse, while the impacts in the South and West, which had weak manufacturing economies when the decline began, have suffered far less.

The decline of the manufacturing sector in the United States has led Congress to make favorable tax changes for that sector.

Another key element of the manufacturing sector is that manufacturing has large "economies of scale." It is far cheaper per unit produced to make a lot of something than a small amount of something. For example, it costs far more per car to make 1,000 cars per year than it does to make 100,000 cars per year. To take advantage of these economies of scale, manufacturing enterprises have tended to become large publicly held corporations which increases their access to money (called capital) so that they can build large factories and buy the expensive machines that result in these cost savings. But, this pattern of ownership has lead to issues of corporate accountability.

Manufacturing is also the field with the most labor union membership besides the public sector. This is to a significant extent a product of the large size of corporate enterprises (and modern labor unions are a product of the industrialization that produced these enterprises). A large enterprise can't simply fire everyone and replace them, so it has to negotiate when its employees are dissatisfied.

Manufacturing is also a major cause of pollution and other harms to the Environment.

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