The Great Manufacturing Myth

Quick: What country has the greatest manufacturing output in the world? If you said China, you're certainly not alone. But you are dead wrong. The United States currently accounts for over $1.8 trillion of manufacturing output each year. China, the second ranked country, accounts for $1.1 trillion - almost 40% below U.S. output. Yet if you only listened to news programs and read the papers, you'd think almost all U.S. manufacturing had been moved offshore - mainly to China.

To be sure, China's manufacturing output has increased over 700% since 1990, and shows no signs of slowing down. But U.S. manufacturing output has increased over 75% over that same time period (in current dollars). I think the myth that the majority of U.S. manufacturing has been outsourced to China revolves around the fact that a lot of consumer products actually have been outsourced to China. And frankly, it is the consumer products we buy day in and day out that are most visible to us. You can easily see that "Made in China" label on the back or your hairbrush, or your child's toy, or your new coffee mug. But most consumers don't typically notice the origin of some of the more complex, high-tech, non-consumer products.

In a global economy, free trade will cause jobs to move around from country to country depending on each country's comparative advantages. And quite frankly, that is not a bad thing. But rest assured the manufacturing base in the United States is not only alive and thriving - it is growing.