Factory Fallacies

A blog about business and economics.
April 12 2012 9:42 AM

Factory Fallacies

There's been a lot of recent buzz about the revival of "industrial policy" in the United States. Insofar as that means thinking about the fact that employment growth in different sectors has different implications for prosperity, it seems all good to me. But all-too-often it seems to mean literally policy designed to encourage factories, manufacturing, and industrial enterprises. In my latest column I say this is a mistake and that rather than looking to poorer countries like China and Japan as models for American prosperity, we should look to the most propserous parts of America with their sectoral specializations in software, media, finance, technology, biotech, and other high-value services.

As an additional point to that, it's worth emphasizing something Jed Kolko said back in February—even in manufacturing-oriented places, relatively few people are actually making stuff on factory floors:

Only 56% of jobs in manufacturing companies involve making or fixing actual stuff, what the government calls production, installation, maintenance, and repair occupations. (If you’re doing the math, that means only 4.5% of jobs in the U.S. involve making or fixing stuff in manufacturing industries.) What’s the rest? Service jobs: management, finance, sales, office support and so on. And don’t look to high-tech manufacturing for production jobs, either: just 32% of jobs in the computer and electronics manufacturing industry involve production, installation, maintenance or repair.

Now there's nothing wrong with management, finance, sales, office support, and so on but it's good to have a realistic sense of what we're talking about. My basic point, however, is this. In Maryland, median household income is $70,000 against a US average of $52,000. That is a staggering 34 percent difference. If we could make more of the country more like Maryland (or Connecticut or New Jersey or the Bay Area) and fit more people into Maryland (or... or... or...) and improve the quality of the infrastructure connecting other places to Maryland (or... or... or...) we'd be making huge progress.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.


The Juice

Ford’s Big Gamble

It’s completely transforming America’s best-selling vehicle.

Should the United States Grant Asylum to Victims of Domestic Violence?

The Apple Watch Will Make Everyone Around You Just a Little Worse Off

This Was the First Object Ever Designed

Don’t Expect Adrian Peterson to Go to Prison

In much of America, beating your kids is perfectly legal. 


How the Apple Watch Will Annoy Us

A glowing screen attached to someone else’s wrist is shinier than all but the blingiest jewels.


A Little Bit Softer Now, a Little Bit Softer Now …

The sad, gradual decline of the fade-out in popular music.

Is Everyone Going to Declare Independence if Scotland Does It? 

I Tried to Write an Honest Profile of One of Bollywood’s Biggest Stars. It Didn’t Go Well.

Trending News Channel
Sept. 12 2014 11:26 AM Identical Twins Aren’t Really Identical
  News & Politics
Sept. 14 2014 2:37 PM When Abuse Is Not Abuse Don’t expect Adrian Peterson to go to prison. In much of America, beating your kids is perfectly legal. 
Sept. 12 2014 5:54 PM Olive Garden Has Been Committing a Culinary Crime Against Humanity
Inside Higher Ed
Sept. 13 2014 8:38 AM “You’re More Than Just a Number” Goucher College goes transcript-free in admissions.
  Double X
The XX Factor
Sept. 12 2014 4:05 PM Life as an NFL Wife: “He's the Star. Keep Him Happy.”
  Slate Plus
Behind the Scenes
Sept. 12 2014 5:55 PM “Do You Know What Porn Is?” Conversations with Dahlia Lithwick’s 11-year-old son.
Sept. 14 2014 11:44 PM A Little Bit Softer Now, a Little Bit Softer Now … The sad, gradual decline of the fade-out in popular music.
Future Tense
Sept. 12 2014 3:53 PM We Need to Pass Legislation on Artificial Intelligence Early and Often
  Health & Science
New Scientist
Sept. 14 2014 8:38 AM Scientific Misconduct Should Be a Crime It’s as bad as fraud or theft, only potentially more dangerous.
Sports Nut
Sept. 12 2014 4:36 PM “There’s No Tolerance for That” Pete Carroll and Jim Harbaugh say they don’t abide domestic abuse. So why do the Seahawks and 49ers have a combined six players accused of violence against women?