The Collapse of Labor Productivity Growth in U.S. Manufacturing after 2010

Abstract

Real value-added per employee in U.S. manufacturing fell between 2010 and 2016. Manufacturing accounted for over half the drop in private economy productivity growth between 1990-2000 and 2010-2016, though it accounted for less than 20% of aggregate value-added. While productivity growth fell in almost all three-digit manufacturing industries, almost 40% of the fall in aggregate manufacturing productivity growth reflected a slower decline of the deflator for computers and electronic products. Almost all of this drop seems to have reflected sharp slowdowns in the decline of the deflators for computers and, especially, semiconductors, for which measurement problems seem to have worsened.