15 September 2009

Where Americans Work

This article is excerpted from the book Outline of the U.S. Economy, published by the Bureau of International Information Programs. View the entire book (PDF, 3.26 MB).

Details about where Americans work provide another view of the economy. On a typical workday in 2005, just over 141 million full- and part-time employees went to work in the United States. Not a single one of them was truly an “average American,” not in a nation of 300 million people with roots in virtually every nation and culture in the world, living in huge metropolitan cities or out-of-the-way hamlets, and in every sort of community in between.

Just 1 percent of the workforce was engaged in farming, forestry, and fishing. Construction, transportation, mining and utilities provided work for 10 percent. Ten percent worked in manufacturing; 4 percent in wholesale trade; 11 percent in retail trade; 12 percent in professional and business services; 2 percent in information, media and software; 6 percent in finance, insurance and real estate; 13 percent in education and health care; 9 percent in arts, entertainment, accommodations and food services, and 5 percent in other services. Government employed 17 percent of the workforce.

In 2005, American workers received $7 trillion in wages or salaries, by far the largest source of income for the nation’s 117 million households. These households also received $1.5 trillion in dividends and interest payments from their savings and investments, $1.3 trillion in employer benefits, and $1.5 trillion in government social benefits, for which they contributed $880 billion in social insurance payments.

The United States has the world’s most open borders based on the volume of trade that enters and leaves the country. In 2006, the United States was the largest importer and second largest exporter of merchandise goods and led all nations in the import and export of commercial services. In that year, the United States exported $1.45 trillion in goods and services, but imported $2.2 trillion, producing a record trade deficit of $750 billion. The United States had a surplus in the trade of commercial services such as airline travel and financial services, but it had a deficit of $838 billion in traded goods.

The strongest U.S. export goods are manufactured capital goods, including motor vehicles, civil aircraft, semiconductors, industrial machinery, and computer accessories. Pharmaceuticals, household goods, gem diamonds, toys, games, and sporting goods are the leading consumer products exports. Chemicals and plastic products are the largest categories of industrial materials exports.

Manufactured goods make up nearly two-thirds of total exports, with agricultural products far behind, at 5 percent of all outbound shipments. Although traditional U.S. customers—Canada, the European Union, and Japan—are the top recipients of American exports, China, India and developing countries receive nearly half of U.S. shipments.

Imports have risen much faster than exports. In 2004, for example, more than one-third of all manufactured products purchased by U.S. consumers were imported. In 1972, the figure was just 11 percent.

The value of the dollar compared to other leading world currencies has been a critical factor in U.S. manufacturing competitiveness. In two periods—the mid-1980s and 1997-2002—the dollar’s value was high, making U.S. exports relatively more expensive and imports cheaper. In both periods, the country’s trade deficit grew sharply. The dollar’s decline during 2002-2008 helped boost U.S. exports.

But apart from currency issues, a rising tide of global competition, particularly from countries with lower labor costs, has pushed American manufacturers to new competitive strategies. A 2005 study by the U.S. Bureau of Economic Analysis disclosed a trend among U.S.-headquartered major multinational corporations. U.S.-based divisions cut employment and capital investments at home but increased jobs and investments significantly at their foreign units. The annual output of the foreign affiliates that year increased by more than twice that of the parent company in the United States. The study suggests that U.S. multinationals were relying increasingly on bringing in foreign-made components, including those from their overseas affiliates, and then including them in their final products.