America's manufacturing industry is a powerful engine that drives the nation's economy, making up 11 percent of the U.S. gross domestic product (GDP) in 2009—though its share is steadily declining. Through a phenomenon known as the multiplier effect, manufacturing actually creates economic output in other industries by using intermediate goods and services in its production process; according to the National Association of Manufacturers (NAM), every $1 of a manufacturing product sold to a final user has created an additional $1.37 in intermediate economic output, more than from any other economic group. The U.S. continues to lead the world in many manufacturing areas, including automobiles, aerospace, steel, telecommunications and consumer goods.
The manufacturing process is a part of a wide array of businesses, from mineral products, metals, chemicals, plastics, machinery, computers and electronics to motor vehicles, furniture, paper, textiles and clothing. Several of the most prominent sectors are discussed in the paragraphs below.
Auto manufacturing for the people
The auto industry has long been a reliable source of jobs for Americans, particularly in the Midwest. Traditionally, auto workers hailed from Michigan, Indiana, and Ohio, though a recent trend has seen an influx of jobs in the Southeast as foreign giants like BMW ramped up domestic production. However, as many jobless Americans could well point out, the industry has stood on shaky ground of late—GM, Chrysler and Ford, the cornerstones of the American car market, have struggled dramatically in the last five years. Trouble emerged in 2006, when Ford announced a record loss of almost $13 billion. When coupled with recessionary pressures in the years that followed, all three companies posted significant losses; the embarrassment culminated in November 2008, when the trio went before Congress to ask for federal funds to stay afloat.
The so-called Great Recession hit the industry hard, but also forced the top American car producers to be more innovative. They got a little help from the government, too; 2009's Car Allowance Rebate System law, commonly referred to as CARS or Cash for Clunkers, gave manufacturers a critical boost. Meanwhile, developers sought to reinvent brands in their perception of the future: fuel efficient, inexpensive, and consumer-friendly vehicles appear to be the chosen way forward for the American car. Early returns are positive on the makeover—hardly surprising given the successes of foreign brands following similar, albeit more prescient paths.
Steel, demand for which has been bolstered by the developing economies of India and China, is another U.S. manufacturing mainstay. This rapid development is a double-edged sword for American steel, though; growing output on foreign soil (most notably in China) is quickly countering the increased demand. Further, due to significantly lower labor costs outside of the U.S., American manufacturers could soon see themselves priced out of the international market for steel.
According to the Bureau of Labor Statistics (BLS), 42 percent of steel workers still live in Pennsylvania, Indiana, and Ohio, traditional seats of organized labor (though union membership has fallen, it remains a heavily unionized industry). In the face of changing demand and competitive pressures from overseas, American producers have been forced to innovate and reduce costs; the BLS estimates that, over the past 30 years, many steel manufacturers have reduced the number of working hours required to produce one ton of steel by over 90 percent. These improvements are due in large part to advances in factory technology, the likes of which has seen the image of the bleak steel mill reborn as that of a high-tech, sophisticated working environment staffed by skilled, educated laborers. The innovation trend will need to persist if the American steel industry can stay competitive in the global market.
Over the last few decades, computer and electronics manufacturing has emerged as a modern alternative to the traditional factory-based industry. Of course, production facilities still exist—the hardware has to be made somewhere—but the industry segment is ultimately driven by brains, not brawn. Rapid technological advancement is the name of the game; the most competitive companies are almost always the most innovative. Take Apple for example: Long considered an also-ran to Bill Gates' Microsoft, the iconic company has emerged as the modern leader in hardware, software and miscellaneous gadgetry—all on the back of visionary products like the iPod, iPhone and MacBook.
The industry relies on high-tech development clusters (most notably in California's Silicon Valley) to spur innovation and promote consistent technological advancement. These centers value intellectual capital above specific technical or skilled labor. Much of the work done here is research-driven; competitive firms are always seeking faster, more consumer-friendly products. While much of the "high-end" product development happens in the U.S., the BLS asserts that "many products are being designed in one country, manufactured in another, and assembled in a third."
WORKING IN THE INDUSTRY
Though the manufacturing industry enjoys higher wages than private industry as a whole (by nearly 25 percent), its component sectors vary widely. Steel workers and manufacturers of autos and aerospace products have the highest salaries in the group.
The BLS predicts significant declines in manufacturing employment from 2008-2018. Citing constantly improving technologies that render many human duties redundant and an increase in market share for foreign firms, the projected declines look grim: 16.3 percent for the automotive sector, 12.7 for steel, and 19.3 for computers and electronics over the next decade. It's not all doom and gloom, however. The BLS also reports that job opportunities will remain "favorable" to "highly favorable" for highly skilled jobseekers; those educated with technical backgrounds will find the fast-paced, ultra-modern innovation clusters ripe with opportunity.