This narrative is simply not true or at least mostly not true (item 3 might be true). The economic output from American manufacturing is greater than ever (mostly). American GDP from manufacturing is growing and American manufacturing production is still #1, way ahead of China.
Here are some things that America makes:
Cars – This is perhaps the least surprising thing on this list. The world’s biggest car company is American. American car companies, however, have plenty of competition. German, Japanese, and South Korean companies all sell many cars inside the United States (strangely, France and Italy are home to some very prestigious automobile companies which have failed to penetrate the American market).
Commercial Airplanes – Remember the last time you bought a commercial airplane? Well, it was probably made in America. Boeing is the world’s dominant manufacturer of commercial airplanes. The only other company that can compete is Airbus, located primarily in France and Germany (Russia also makes commercial airplanes, but nobody buys them).
Construction Equipment – When you look at any construction site, you’ll almost certainly see a bunch of heavy yellow machines with the letters CAT stamped on them. Those machines were made in America. The industry of building machines which build buildings is dominated by one American firm: Caterpillar. The main other company that seems to also be in the business is Komatsu Limited, a Japanese firm with one-fourth as many employees as Caterpillar.
Tanks – It’s hard to tell, naturally, what country makes the world’s best tanks (the US and Germany IMO). Nevertheless, America does make a lot of tanks – and it’s probably safe-to-say that the quality of American tanks is amongst the best in the world (the cost, on the other hand…). It seems that the major “competitors” in this field are Germany, Great Britain, and perhaps Russia.
Our perceptions on the decline of American manufacturing stems from two factors:
(1) Many of the common household items we use are not made in America.
America doesn't really make TVs, T-shirts, or Tupperware. Because we don't buy American things that often, we naturally assume that Americans don't make very many things.
(2) There are fewer manufacturing jobs in the Rust Belt and around Birmingham (the Pittsburgh of Alabama). Part of the reason there are fewer jobs is that production per worker has skyrocketed.
Left-wing narrative: This is just another example of the rich getting richer and the poor getting poorer. Rich manufacturers are getting more and more out of their workers. Meanwhile, workers are either being laid off or their wages are stagnant. The great weakening of unions helped the richer obtain a larger proportion of the worker's output and now the disparity in income is getting wider. Workers are producing more, yet they are not receiving more...sad...(Please note that I assumed fewer workers because the chart about productivity per worker went up way more in relation to the chart about U.S. manufacturing, therefore implying that the number of workers is less.)
Stephen Colbert's Right-wing narrative: This is just a more efficient allocation of resources. Companies are not in the business of providing jobs, they are in the business of making money. If this means fewer workers, stagnant wages, and the income gap widening,
Real Right-wing narrative: This is what is efficient for the economy. Workers are not shut out from the additional wealth being created. They can buy stock in public companies. Their pension plans likely have some holding in their companies stock so that they can share the gains of production that way. Also, the explosion of production per worker is not workers working harder, its increased automation in factories. This increase in production per worker is because employers had to make large capital investments (spend a lot of money) to make factories more modern, less wasteful, and more automated (thereby decreasing the need for more workers and greatly increasing production per worker).
The real truth is probably somewhere in between all of these narratives.
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