EconTalk Susan Houseman on Manufacturing
Oct 21, 2019
Susan Houseman, Vice President at the Upjohn Institute, dives deep into the nuances of the manufacturing sector. She challenges conventional beliefs about manufacturing growth, arguing that most increases are tied to computer production while other areas stagnate. Houseman suggests that trade, not productivity, is the real culprit behind employment declines. She also discusses the complexities of measuring manufacturing output and employment, emphasizing how quality adjustments impact our understanding of inflation and living standards.
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Misleading Aggregates
- Aggregate manufacturing data can be misleading.
- Computer production drives growth, while other sectors stagnate.
Counting Manufacturing Jobs
- Manufacturing jobs are counted based on payroll employment in classified manufacturing businesses.
- Contracted or temporary workers are excluded, leading to an undercount.
Measuring Output
- Manufacturing output is measured using value-added, adjusting for price changes.
- This is challenging due to product evolution and substitutions.