5 Facts About American Manufacturing

It’s no secret that the American manufacturing industry has been on the mend in the last couple of years. With the cost of doing business overseas increasing steadily as wages and other operating costs continue to rise, many companies are reshoring their production capacity to the U.S.A.

So, what is the impact of American manufacturing on the economy? Why is manufacturing important to the U.S.?

The answers to these questions about manufacturing could be best answered by taking a look at some important statistics about the manufacturing industry in the U.S.:

Fact #1: The Manufacturing Industry Employs Millions of Americans

According to the Bureau of Labor Statistics, the manufacturing industry employed roughly 12,317,000 Americans in the month of October 2015. This figure takes into account all employees that work in the manufacturing industry, which may include purchasing agents, testers, inspectors, and other workers who don’t directly manufacture goods.

This is an enormous part of the American workforce. Even if you restrict the definition of a manufacturing worker strictly to just production and nonsupervisory employees, the manufacturing sector still employed more than 8.5 million Americans in October 2015.

Fact #2: Manufacturing Industry Jobs Outperform Fast Food Worker Jobs for Pay

One of the major issues in America is that many entry-level jobs simply don’t pay a living wage.

For example, according to the Bureau of Labor Statistics, the median wage for workers in the combined food preparation and serving industry, which includes fast food workers, was $18,410 a year in 2014, or $8,85 an hour.

Compare this to the median wage for machinists in the manufacturing industry, which was $39,930 a year in 2014, or $19.20 an hour. Here at Marlin Steel, however, employees make closer to $77,000 a year, depending on job performance and what skills they’ve mastered.

This gives manufacturing workers a better shot at being able to provide for their families and set aside money for retirement later in life.

Fact #3: Manufacturing Has a Significant Impact on the U.S.’s GDP

Statistics from the World Bank show that, in 2013, the manufacturing industry accounted for roughly 12% of the U.S.’s Gross Domestic Product (GDP). In that year, the GDP for the United States of America was $16,768,053,000,000.

This means that the manufacturing industry in the U.S. was worth roughly $2 trillion dollars in 2013. To put this in perspective, the GDP of Canada, our neighbor to the north, was less than $1.9 trillion in that same year.

Just this one section of America’s economy produces more value in a year than the entire GDP of an entire developed nation.

As the National Association of Manufacturers puts it, “taken alone, manufacturing in the United States would be the ninth-largest economy in the world.”

Fact #4: American Workers Out-Produce Their Chinese Counterparts

According to a report by CBS news, the average American manufacturing worker produces $104,606 of value” in a year while a “Chinese industrial worker produces $12,642 of output” in that same time frame.

This means that an American manufacturing employee creates eight times as much value in a year as their Chinese counterparts.

Much of this disparity in the productivity of American workers to Chinese laborers can be attributed to the use of manufacturing automation in American factories. Why? Here are a couple of reasons, using wire bending as an example:

1. A single worker managing an automated wire bending robot can complete dozens of wire bends in a minute. A manual laborer might be able to complete a half-dozen bends in that same amount of time.
2. Robotic assembly techniques increase consistency. Manually bending and cutting wires is less precise, increasing the chances that a part will have to be rejected.

While these examples are specific to wire bending, production automation can provide similar speed and consistency benefits in a number of manufacturing industries.

5: Manufacturers Account for Most of Private Sector R&D in America

According to statistics cited by the NAM, “manufacturers in the United States perform more than three-quarters of all private-sector R&D in the nation.”

From product research to the development of new manufacturing techniques and technologies, manufacturers do more to drive innovation in the U.S. than any other sector of the American economy.

This results in the creation of new intellectual properties and innovations that help to change the lives of Americans in both major and minor ways. In a way, the constant search for improvement by manufacturers is the lifeblood of innovation.

In many ways, the American manufacturing industry is incredibly remarkable. It provides well-paying jobs to millions of American taxpayers; jobs that build the middle class.