NCPA - National Center for Policy Analysis

Myth Of Deindustrialization

June 12, 1998

The deindustrialization of the U.S. economy is a persistent myth, says columnist Donald Lambro. In fact, more U.S. workers are employed in manufacturing, and they are making and selling more, than ever before in history.

  • Manufacturing as a share of gross domestic product (GDP) has remained pretty stable since the 1940s at 20 percent to 23 percent of GDP, according to the Commerce Department.
  • Despite layoffs by some Fortune 500 firms, the number of overall industrial jobs has been climbing -- after staying at about 18.4 million from 1994 to 1996, it went up by 120,000 in 1997 to 18.5 million.
  • Far from losing market share in the global trading economy, the U.S. market share has expanded in such sectors as aviation, computers, electronics, machinery and soft drinks.

Although corporate layoffs receive more attention, Lambro points to a recent study from the National Center for Policy Analysis that found monthly job openings are more than double the typical monthly growth of the labor force; half of workers who lose their jobs are reemployed within eight weeks; and most workers replace their old job with a new one that pays as well or better.

Responding to media coverage of downsizing, says Lambro, surveys show many workers feel insecure. But researchers at North Carolina State University found overall job tenure actually grew during the 1990s, based on a study of the payroll records of 1.1 million workers at 59 U.S. firms.

Source: Donald Lambro (Washington Times), "U.S. Manufacturing Stays Very Healthy," Human Events, June 12, 1998.


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