EURASIA NEWS - 30, 2014
Manufacturing in the US has rebounded after the Great Recession, but
employment levels have not recovered from their steep decline in the
decade before the recession. This column examines to what extent the
sector’s fall is a result of the rise of China. The authors estimate
direct effects of import competition from China, as well as labour
market and buyer-seller indirect effects that operate at the local
level. China’s impact has been strong, and employment in US
manufacturing is unlikely to recover.
By Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson and Brendan Price
The end of the Great Recession has rekindled optimism about the
future of US manufacturing. In the second quarter of 2010 the number of
US workers employed in manufacturing registered positive growth – its
first increase since 2006 – and subsequently recorded ten consecutive
quarters of job gains, the longest expansion since the 1970s. Advocating
for the potential of an industrial turnaround, some economists give a
positive spin to US manufacturing’s earlier troubles: while employment
may have fallen in the 2000s, value added in the sector has been growing
as fast as the overall US economy. Its share of US GDP has kept stable,
an achievement matched by few other high-income economies over the same
period (Lawrence and Edwards 2013, Moran and Oldenski 2014). The
business press has giddily coined the term ‘reshoring’ to describe the
phenomenon – as yet not well documented empirically – of companies
returning jobs to the United States that they had previously offshored
to low-wage destinations.
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