Question

Why is the United States considered to not have any real value added in its manufacturing sector?

Answer 1

The manufacturing sector of United States is not as it was a generation ago. The contraction of manufacturing sector has been felt by suppliers, workers, firms, and entire communities. The manufacturing erosion contributed nearly two-thirds of the decline in labor’s share of US GDP. Although the decline has unevenly played-out. In the past two decades, the growth of output in manufacturing has been concentrated by only few industries, including electronics, pharmaceuticals, and aerospace. Majority of other manufacturing industries have faced slower growth or real fall in value added

The manufacturing by year-2007 had already undergone major changes. Over the prior ten years, the real value added by this sector has decreased from 16.1 percent of GDP (Year-1997) to 12.8 percent (Year-2007) and total employment's share had decreased from 14.2 percent to 10.1 percent. The manufacturing sector role during the recession further eroded and into the recovery and, by 2018, it comprised 8.5 percent of total employment and11.4 percent of GDP (increased from 11.2 percent in Year-2016 and Year-2017). The shrink of the role of manufacturing output relative to the economy's size continued to shrink post-recession, the US manufacturing sector real value added also slowly recovered and, as of 2018, the United States finally surpassed its 2007 pre-recession peak; and produces now more manufactured products than ever in its history when the impact of quality improvement, price changes, and functionality enhancements, and intermediate purchases are excluded. However today the employment in manufacturing sector has not had a similarly positive fate; and still considered to not contributed any real value added