How do we reconcile lower manufacturing employment with rising manufacturing output? In his April 3, 2006, BusinessWeek article, "The Case of the Missing Jobs," Huether says, "Since 2001, with the aid of computers, telecommunications advances, and ever more efficient plant operations, U.S. manufacturing productivity, or the amount of goods or services a worker produces in an hour, has soared a dizzying 24 percent. That's 72 percent faster than the average productivity advance during America's four most recent recession-recovery cycles dating back to the 1970s. In short: We're making more stuff with fewer people." That means rapid economic growth doesn't translate into the kind of manufacturing job creation of earlier periods.
How about the claim that our manufacturing jobs are going to China? The fact of business is, since 2000, China has lost 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S.
Job loss is the trend among the top 10 manufacturing countries who produce 75 percent of the world's manufacturing output (the U.S., Japan, Germany, China, Britain, France, Italy, Korea, Canada and Mexico). Only Italy has managed not to lose factory jobs since 2000.
Economist Joseph Schumpeter referred to this process witnessed in market economies as "creative destruction," where technology and innovation destroy some jobs while creating others. While the process works hardships on some, any attempt to impede the process will make all of us worse off.
Imagine for a moment that technology hadn't destroyed most of the jobs of those 41 percent of Americans working in agriculture in 1900. Where in the world would we have gotten the manpower to make all those goods produced now that weren't even imagined in 1900? Jobs destroyed through the market forces of creative destruction make us all better off, and that applies also to job destruction that comes from peaceable, voluntary exchange with people in different cities, states and countries.