Paul Krugman recently lamented the fact that in recent years,
“manufacturing, once America’s greatest strength, seemed to be
in terminal decline.” His analysis, though, misses the mark. He
reached this conclusion because “in the 1990s, U.S.
manufacturing employment was more or less steady. After 2000,
however, it entered a steep decline. The 2001 recession hit
industry hard, while the bubble-fueled expansion of the decade’s
middle years — an expansion marked by a huge rise in the trade
deficit — left manufacturing behind. By December 2007, there
were 3.5 million fewer U.S. manufacturing workers than there had
been in 2000; millions more jobs disappeared in the slump that
followed.” But while the number of workers in manufacturing has
declined over the past few decades, manufacturing production has
gone up. In fact, we continue to produce the most in the world.
Taking a look at another graph, we can see that productivity has
actually increased more quickly over the past decade. Why is the
fact that we’re produ