Extent of Problem Is Hidden


It seems that many people, even within the government, are not 100 percent sure of what is and what is not manufacturing.

The 2004 Economic Report of the President (ERP) suggests some seemingly unconventional businesses that can be considered manufacturers. According to the official definition found in the report and which was provided by the U.S. Census Bureau, manufacturing includes those businesses “engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products.”

If this definition sounds a little hazy to you, do not be alarmed, because even the Census Bureau says the boundaries between manufacturing and other sectors can be “somewhat blurry.” To help clarify manufacturing, the Bureau says it is the “transformation of materials into new products … although what constitutes a new product can be somewhat subjective.”

So this brings up the question, just what kinds of industries does the Census Bureau consider manufacturing? The 2004 ERP goes on to ask, “When a fast-food restaurant sells a hamburger, for example, is it providing a ‘service’ or is it combining inputs to ‘manufacture’ a product?” Does every time a minimum-wage employee at McDonald’s slaps a patty between two buns and throws in a couple of pickles, some mustard and ketchup count as manufacturing?

Although fast-food restaurants like McDonald’s are not specifically listed in the Census Bureau’s website as examples, several other businesses listed as “manufacturing” are surprising: bakeries, candy stores, milk bottling and pasteurizing, custom tailors, fresh fish packaging (oyster shucking, fish filleting), water bottling and processing.

With such a broad definition of manufacturing listed by the government, the increased number of companies and jobs that can be included under the heading of manufacturing may actually mask traditional-type manufacturing job losses.

This could be a factor in why more people are not speaking out about the loss of manufacturing in America.