Higher costs and stronger trade unions for the strongest (recovery) sector of the US economy

map showing state positions of labor unions, b...

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Manufacturing is the strongest sector of the US economy, growing at an estimated annual rate of 9.1 per cent in the first quarter, compared with 1.8 per cent for the economy as a whole.

Other states with sharply rising manufacturing employment include Wisconsin, Ohio, Indiana and Pennsylvania, with Texas as the best performer in the south.

Mark Perry, professor of economics at the University of Michigan in Flint and visiting scholar at the American Enterprise Institute, described manufacturing industry as “the shining star of the US economic recovery”.

Although the upturn in the industry has begun to create employment, the job gains are small compared with the numbers that have been lost, and economists say a bounceback was almost inevitable given the severity of the decline in 2008-09.

The data are, however, a corrective to the common perception that US manufacturing is inexorably moving away from northern states that have higher costs and stronger trade unions towards southern states, where the workforce tends to be lower-cost and less unionised. […]


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