FACT CHECK: Did The US Lose 70,000 Factories Under Bush And Obama?
White House trade advisor Peter Navarro said Sunday that the U.S. lost over 70,000 factories and millions of manufacturing jobs under President George W. Bush and President Barack Obama.
Verdict: True
Federal labor statistics show that there were nearly 5 million fewer manufacturing jobs when Obama left office than when Bush entered office. Census data available up to 2015 shows that the U.S. lost about 70,000 plants, factories and mills since 2001.
Fact Check:
Navarro pointed to the manufacturing sector while defending new tariffs on Chinese products. The decline in manufacturing jobs and factories, he argued, is evidence that the U.S. has not had fair and reciprocal trade with China.
“Well, Bush and Obama, over the course of 16 years, basically stood by while we lost over 70,000 factories, millions of manufacturing jobs and much of our traditional manufacturing base,” Navarro said on “Meet the Press.” “What is at stake here, Mr. Todd, is the industries of the future.”
U.S. Bureau of Labor Statistics data shows that the U.S. lost nearly 5 million manufacturing jobs while Bush and Obama were in office. The manufacturing sector had 17.1 million workers in January 2001, when Bush took office, and 12.4 million workers in January 2017, when Obama left office.
The manufacturing sector reached a turning point in 2000, and jobs started to sharply decline. The industry lost about 3 million jobs from 2000 to 2004. Jobs numbers slowly declined through 2008 and fell by about another 2 million during the recession from 2008 through 2009.
News reports frequently note that the U.S. lost 5 million manufacturing jobs since the year 2000. There were about 17.3 million manufacturing jobs in the first half of 2000 and a low of 11.5 million manufacturing jobs in 2010.
Manufacturing jobs numbers have slowly increased by a million jobs since 2010, but not at a rate that will reach 2000 levels anytime soon. Mark Muro, director of the Metropolitan Policy Program at the Brookings Institution, told The Washington Post that lower-end, less-skilled manufacturing jobs are less likely to come back.
Federal data also supports Navarro’s figure on the number of factories lost under Bush and Obama, though numbers are only available up to 2015. Trump said last year that the U.S. had lost 60,000 factories since China joined the World Trade Organization in 2001.
The Census Bureau has two different reports that measure the number of manufacturing establishments. The category includes plants, factories and mills, as well as bakeries, custom tailors, or other stores that create and sell new products in the same place.
According to the Census Bureau’s Business Dynamics Statistics series, the U.S. lost 73,757 manufacturing establishments from 2001 to 2014. There were 348,513 manufacturing establishments in 2001 and 274,756 in 2014. That’s a decline of about 20 percent.
Another Census Bureau report, Statistics of U.S. Businesses, found that 59,794 factories closed from 2001 to 2015. The dataset counts 352,619 manufacturing establishments in 2001 and 292,825 manufacturing establishments in 2015.
Navarro and Trump blame bad trade policies for the loss of manufacturing jobs and factories. One estimate says that almost half of the job loss, over 2 million jobs, could be attributable to globalization. The left-leaning Economic Policy Institute said that trade with China specifically cost the U.S. 2.4 million jobs in the manufacturing sector from 2001 to 2013.
Others say that technology and automation are the main culprits because it’s cheaper and easier for robots to assemble products.
A study from Ball State University found that increased productivity accounted for 88 percent of job losses from 2000 to 2010. Boston Consulting Group reported that while it costs about $25 per hour to employ a human welder, it costs only about $8 per hour to operate a robot welder.
Despite the decline in the number of factories and jobs, manufacturing output has increased 8.6 percent since 2000, due in part to machinery and workers becoming more skilled – though productivity has been sluggish following the global recession.
“Simply put, we are producing more with fewer people,” Mireya Solís, a senior fellow at Brookings, told The Financial Times.
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