Short Paper

The Manufacturing Sector of the United Sates

The productivity of the manufacturing sector is on the rebound and has been rising in the past few years. The productivity in the 4th quarter of 2013 was increased by 1.3 percent, as the outputs increased by a full 5 percent. The amount of hours worked did not improve as much as the outputs, but rose by 3.6 percent. There was only a 0.9 percent rise in compensation per hour. As stated in the Fourth Quarter and Annual Averages post, “the gain in hourly compensation was the smallest in the annual series which extends back to 1988.” Even though the productivity has been steadily increasing the compensation continues to rise exceptionally slow. The overall growth of the manufacturing sector has stayed consistent within the past three years of about a 1.5 percent increase each year (Fourth Quarter and Annual Averages 2013, Revised).

The manufacturing sector has been declining until recently and the competitive aspect of this sector is crucial for its recovery. “U.S. manufacturing competitiveness has been improving for some time due to U.S. workers’ higher productivity, America’s competitive labor costs, and the flexibility U.S. manufacturers enjoy on the factory floor (Sirkin, Harold L),” Labor costs have been declining about 16-35 percent as wages have been increasing around 15-20 percent (Sirkin, Harold L). The shale gas energy growth will also do a huge part in the United States competiveness by creating more jobs and establishing new and better companies. This will help keep jobs within the United States.

The United States has been in a recession for the past few years and with the new competitive aspect and the increase in the manufacturing sector the employment rates have gone up and are expected to continue to improve. “More than half of 200 U.S. companies with sales greater than $1 billion are moving jobs back to the United States, or are planning to, within the next two years (Adelmann, Bob)”. The...