In 1947, the United States was truly the world's factory. Half of all the world's manufacturing took place in the United States. Americans made 57 percent of the world's steel and 80 percent of the world's cars. It was inevitable that other countries would eventually challenge the dominance that American manufacturers had enjoyed in the aftermath of World War II. During the early 1960s, foreign manufacturers produced 6 percent of the cars purchased by Americans. That figure climbed to 20 percent in the late 1970s.
The foreign penetration extended far beyond the market for compact cars. Foreign countries began to dominate the highly profitable, technologically-advanced fields such as consumer electronics, luxury automobiles, and machine tools. Americans discovered that almost exclusively foreign manufacturers now produced technologies their country had pioneered--semiconductors, color televisions, and videocassette recorders. The decline in the American share of the market meant fewer jobs in the American automobile, steel, rubber, and electronics industries. In addition, American and even Japanese companies shifted low-skill production work to such places as South Korea, Taiwan, Hong Kong, Singapore, and Indonesia, where goods could be produced more cheaply because of lower wage scales. Few economic developments aroused as much public concern during the 1970s as the loss of American jobs in basic industry. According to one estimate, 30 million jobs disappeared. Displaced workers saw their savings depleted, mortgages foreclosed, and health and pension benefits lost. Even when they found new jobs, they typically had to settle for wages substantially below what they had earned before. Plant shutdowns and closings had profound effects on entire communities, which lost their tax bases at the time when they needed to fund health and welfare services.
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