Is the United States Outsourcing All Power Supply Manufacturers to Foreign Corporations?

When you turn on a cable news channel at some point you’ll hear the gloomy news that the United States is no longer manufacturing power and that the majority of our electronic goods are being made overseas. As a result, there has been a widespread outcry that it is this outsourcing of power supply manufacturers that is the prime cause for the current recession. This just isn’t the reality of the Power Supply Manufacturer industry.

United States Power Supply Manufacturer Facts

Fact: U.S. manufacturing is still tops in the world. In fact, the United States still creates the most manufactured goods in the world. In comparison, China is still second to the United States and Japan and Germany combined are still less than the United States. However, interestingly and probably why this manufacturing fact is surprising is because China is the largest exporter of products – so it seems like their stuff is everywhere. But the answer to this statistic is easy – they just don’t have a lot of internal demand, so what else are they going to do with it.

Furthermore, and more to the initial point of this section, manufacturing in the United States grew in February 2011 at its fastest rate in seven years. In fact, U.S. manufacturing has increased for nineteen consecutive months (Reuters). While on the contrary, factory growth in China is at a six month low.

But specifically, what about the power supply manufacturer industry?

  • From 2001 through 2010, the number of U.S. jobs in the electronics sector fell quite gradually from 582.6 million to 354.2 million jobs. However, in 2010, that number showed an increase for the first time in 10 years and as of January 2011, approximately 367.7 million people are employed in the power supply manufacturer/electronics industry. (Bureau of Labor Statistics)
  • The unemployment rate is now 5.8% in the electronic sector compared to an overall unemployment rate of 9.8%. (Bureau of Labor Statistics)
  • Of the power supply manufacturing jobs that moved to China in the last decade, approximately 2.7% were in the electronics sector while the IT sector accounted for 26% of the total outsourcing job loss. (The China Job Drain)
  • Even though the statistics indicates that the power supply manufacturing sector has diminished somewhat in the past decade, the data is clear that there is a resurgence of domestic power supply manufacturing. This at the very least is suggestive of a leveling off period with respect to the outsourcing scare. Furthermore, there has been an overall (IT and manufacturing) decrease in outsourcing since 2008.

So the facts are clear, the United States is still a big player in the power supply manufacturing industry and is likely going to continue to be so in the future. There is no denying that the outsourcing of industry has translated into job loss and perhaps by extension, contributed to the recession. However, these losses were not primarily in the power supply manufacturing sector.