Here’s How the Return of American Industry Will Actually Look

At some point in your life, you will find yourself trapped in a conversation with an economist or some other policy expert eager to lecture you about the many nuanced truths that they understand but an unsophisticated rube never will. This is, after all, their reason for existing. Indeed, you may find yourself in the situation because you asked casually, “so, what do you do?” and your conversation partner responded, “I study the many nuanced truths of economics and public policy that the unsophisticated masses will never understand.” Resist the temptation to just walk away!

Lean in, show earnest interest, and mention a simple fact about the American economy that they will not know, do not understand, and cannot explain: worker productivity in the manufacturing sector has been falling for more than ten years.

Don’t worry, there’s no actual dispute about this fact. It’s accurate:

It’s also so outlandish, counterintuitive, and inconsistent with expectations for a reasonably functional capitalist system that your expert will not for a moment consider it might be true. Instead, you will get an eye roll and a sigh and a comment like, “oh, I think you mean employment, not productivity.” Insist you mean productivity.

“Hmm, well you might be thinking of productivity growth. [condescending smile] It is true that we’ve seen slowdowns in productivity growth.” Hold your ground. You understand the difference between levels and growth rates perfectly well. Productivity growth turned negative more than a decade ago. Its level is falling. American factories now require more workers than in 2011 to produce equivalent output. Suggest they look it up at the Bureau of Labor Statistics. Even better, show them this post (which you’ll obviously have bookmarked and at the ready).

I promise this will be fun. I did this once with the former head of the Bureau of Labor Statistics. It will work for you.

I belabor the point, and recommend it for your next cocktail hour, not only for the enjoyment of awkward social interaction, but also because the statistic should be the start rather than the end of a much longer conversation about how we think about labor productivity and what it means for the economic challenges we have faced and the economic opportunities in front of us. The narrative goes that automation has been reducing employment, especially in manufacturing, and we just need better mechanisms for coping with that reality. But that’s exactly backward. Our problem is that we have been experiencing too little productivity growth, especially for the typical worker, including from automation. Only with incentives for, and investment in, much more of it will we get the nation back on track.