Real GDP

 

While the share of U.S. (and world) economic employment represented by manufacturing has long been diminishing, healthy growth in the manufacturing sector is still a vital component of our national prosperity. And Right to Work states are leading the way. Image: Allstar/Cinetap

Even before the Great Recession of 2008-2009 brought a long period of low national unemployment rates in the U.S. to an abrupt end, concerns about a secular employment decline in the manufacturing sector were widespread.

However, as many economists have pointed out, the decline of U.S. manufacturing employment is primarily a result of output growing faster than demand, rather than any reduction in American firms’ market share of worldwide demand for manufactured products.

In fact, data from the U.S. Commerce Department’s Bureau of Economic Analysis (see the link above) show that, from 2002 to 2012, the country’s real manufacturing GDP in “chained” 2005 dollars grew from $1.359 trillion to $1.684 trillion, or 23.9%.  Meanwhile, the real overall GDP of the U.S. grew by 16.2%, or just a little over two-thirds as much.

As I pointed out in a Saturday blog post on this same web site, overall real 2002-2012 GDP growth in the 22 states that had Right to Work laws on the books throughout the period was 21.6%, significantly greater than the national average and 8.5 percentage points greater than the average for states lacking Right to Work protections throughout the period.

In the manufacturing sector, Right to Work states’ growth advantage was even wider.  From 2002 to 2012, Right to Work states’ real manufacturing GDP increased by 31.8%, or 11.2 percentage points more than the forced unionism-state average.

Ten of the 11 states showing the great declines in real manufacturing GDP lack Right to Work laws.  But six of the nine with the greatest manufacturing GDP gains are Right to Work states.

 

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