Answer to Question #247168 in Economics of Enterprise for kyla

Question

1. The value of manufactured goods (things made in factories and plants) produced each year in the United States has more than doubled over the last 30 years. Also over the last 30 years the number of Americans employed in manufacturing has significantly decreased. What does this tell you about the productivity of workers in the manufacturing industry?

Answer 1

Solution:

The manufacturing sector accounts for only a small fraction of the United States GDP in recent years.  

This tells us that the productivity of workers in the manufacturing industry has vastly improved over the years. They are more skilled and productive despite the falling numbers.

 

Over time, the simultaneous growth in manufacturing production and decrease in manufacturing jobs illustrates that American manufacturers have become significantly more productive than they were three decades ago — that is, they can make more things, or goods of better value, with less labor.

This is due to a variety of factors, including companies investing more in machinery and replacing older machines with newer ones, people becoming more competent and educated, and companies streamlining and enhancing their industrial processes.