What happened to manufacturing in the aughts? The usual story is that employment plummeted but output increased. Apparently manufacturing got a lot more efficient during this period, which is why so many people lost their jobs.
Susan Houseman begs to differ. Using sophisticated decompositions, she finds that it’s all a mirage: computer manufacturing got more efficient, but that’s about it. And even that’s a bit of a mirage due to the way inflation is calculated: it’s not that American workers are making a lot more computers than they used to, it’s that they’re making more MIPS, so to speak. […]
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