Obama and manufacturing in the US

BusinessDaily.eu – By Mikkel Roland Egesberg – In this article we will take a short look at manufacturing jobs in the US, and how they have developed since President Obama took office in January 20, 2009. Obama has set a goal to double US exports, and the manufacturing sector is a keystone in that plan, since manufacturing represents nearly 60% of total U.S. exports:

“Two years ago, I set a goal of doubling U.S. exports over five years.” said President Obama. “Today, we’re on track to meet that goal – ahead of schedule. But we need to do more, which is why I’m pleased to announce several steps that will help more American businesses sell their products around the world, create jobs right here at home, and help us build an economy that lasts.”

The first figure shows the total number of Americans employed in manufacturing in the different states. We can see that the biggest state in the US, California, is also the state with most employed in manufacturing. It has around 1,2 million manufacturing jobs.

The next figure shows the percentage loss or gain the different states have had from when Obama took office in  January 20, 2009. (Alaska is not in the chart, since it has had an 58,1% increase from 10.500 employed to 16.600). We see, that most states have seen a decline in the number of employed in the manufacturing sector. When Obama took office in 2009 there were around 12,4 million Americans employed in the manufacturing sector, today that number is just around 12 million Americans. From  January 2009 to June 2012 there has been a 3% loss of employment in the US manufacturing sector.

Photo Credit: OLIVER Source: Der Standard – Vienna, Austria

One could stop here, and conclude that it has been impossible for Obama to turn the trend around and stop the outsourcing of US manufacturing jobs to China, eventhough Obama saved the car companies, General Motors (GM) and Chrysler, but let’s instead try to look at the last year of Obama’s presidency:

As you can see, the manufacturing employment has increased in many states from June 2011 to June 2012, and total manufacturing employment in the US has gone up from 11,7 million Americans to just around 12 million, an increase of  2% over the last year.

It is still to early to say if Obama and the US have turned around the decline in manufacturing jobs for good, but the buzz word right now is “reshoring“: Some economists argue that manufacturing jobs are going to “reshore” themself back to USA, and the West, as wages increase in e.g. China and elsewhere in Asia. This will make it easier to change production as the trend changes. Take for example Spanish fashion retailer “Zara”. Zara produces much of it’s clothing in Europe, making it possible for the company to develop a new product, and get it to Zara’s European stores in just two week, compared to the six-month industry average.

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