Here is an interesting new paper from three economists at the International Trade Commission on the question "Can the US raise employment with more exports?" The answer is very surprising: a revival of manufacturing exports will create jobs, but not necessarily jobs in manufacturing. The jobs will be created in manufacturing related services.
According to the authors, "Both upstream and downstream services are embodied in the value of final manufactured goods . . . In 2007, services amounted to 23% of the costs for each dollar of US manufacturing output." They also note that "the direct and indirect services employment embodied in US goods exports make up nearly 39% of the total employment supported by goods exports."
Kind of puts an end to the manufacturing versus service argument, doesn't it. The answer to the argument is "yes" -- i.e. manufacturing and services are not an either/or but a both/and.
Leave a comment