THE WHITE HOUSE

Office of the Press Secretary

               Why Manufacturing Matters to the U.S. Economy
                             February 5, 2000

Manufacturing workers represent 17 percent of total private employment - over 18 million workers, accounts for 17 percent of the nation's GDP, and represents almost 70 percent of U.S. export value. Manufacturing sales have a higher average multiplier effect on the economy relative to other sectors. Every $1 million in sales supports ten jobs in manufacturing and six jobs in other sectors such as services and construction.

• A Source of High-Wage Middle-Class Jobs
  • In 1998, the average full-time manufacturing worker's total compensation package was greater than 20 percent than that of the average U.S. worker.
  • Compared to service industry workers, manufacturing workers are more likely to have access to benefits that contribute to social and economic stability - such as health and life insurance, disability, retirement plans, and vacation and sick leave.
  • Over half of all those employed in manufacturing have a high school diploma or less
• The Engine of U.S. Productivity Growth
  • Manufacturing industries are the economy's most prolific creators and disseminators of technology - accounting for more than half the total R&D performed
  • Productivity growth in manufacturing between 1996-1999 has been more than double that of the U.S. economy at large - due to the investments made in technology development and diffusion
• Driving our Nation's Exports
  • In 1997, manufacturing exports made up 69 percent of the known export value of $563 billion
  • Nearly 15 percent of the dollar value of U.S. manufactured products are exported -- over double the percentage exported in 1985
  • The average wages of employees at manufacturing firms who rely directly on exports are higher than those of employees at manufacturing firms producing for only the domestic market. One study has determined that there is a 14 percent earnings increase due to an "export premium".
• The Importance of Small Manufacturers
  • In 1997, approximately 98 percent of the more than 375,000 manufacturing establishments were small with over 90 percent employing 100 or fewer people, and roughly two-thirds employing 20 or fewer people.
  • Establishments with fewer than 500 employees provide over 65 percent of all manufacturing employment and 55 percent of the value-added content of finished products.

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