Published in Federal Reserve Bank of Cleveland Economic Commentary, July 1, 2004, pages 1-4. Copyright © 2004 Federal Reserve Bank of Cleveland. The definitive version is available at http://www.clevelandfed.org/research/commentary/2004/#July04.
NOTE: At the time of publication, the author Eric Fisher was not yet affiliated with Cal Poly.
In the last 50 years, the share of employment in manufacturing has declined in the United States. The main reason for this phenomenon is labor-saving technological progress. Variation among state tax polices and international economic conditions have played only minor roles. The source of future prosperity will be technological advances in a service-oriented economy.