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Candidates misrepresent manufacturing data, economist says

Industry News | May 20, 2016 | By:

Data contradicts presidential candidates’ claims that America’s manufacturing industry is in dire straits, says Michael Hicks, an economics professor at Ball State University in Muncie, Ind.

In a university press release, Hicks, director of Ball State’s Center for Business and Economic Research, says, “They are peddling untruths. During visits to Indiana for the primaries, these candidates claim that Indiana is suffering, but the state had a record year for manufacturing’s value of goods produced in both 2014 and 2015.

“They also claim that bad policies are causing manufacturers to send jobs overseas or to Mexico,” he says. “However, research shows that increasing productivity accounts for 88 percent of job losses in manufacturing.” In a recent study, “The Myth and the Reality of Manufacturing in America,” Hicks analyzed how the nation’s manufacturing sectors have recovered from the Great Recession.

“There are major misunderstandings among the public and the media about the manufacturing sector,” he says. “The U.S. manufacturing base is not in decline, and we have recovered from the recession. Nor are jobs being outsourced because American manufacturing can’t compete internationally. Moreover, new jobs in manufacturing pay well above the average wage.”

The study notes the Great Recession had lost its stranglehold by 2014, when U.S. manufacturers attained record levels of production.

“Less than 4 percent of all manufacturing jobs lost over the past decade can be linked to international trade, and most of trade-related job losses are in low-productivity sectors,” Hicks says. “Changes in productivity, domestic demand and foreign trade all impact manufacturing employment in the U.S., and it’s important to clarify those impacts in order to understand what is happening in the manufacturing and logistics industries.”

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