Missing factory jobs.

Since 2000, over 4.5 million manufacturing jobs have been lost nationwide. Labor and political activists are agitated. Some wonder if the country should limit its connections to the global economy.

But the country in question isn't our country--it is China. Those manufacturing jobs disappeared in the Asian country that is supposedly stealing all of our factory work. So how can China also be experiencing a net loss of blue-collar jobs? The answer, in a word, is productivity.

It is conventional wisdom that outsourcing has robbed millions of American workers of their positions. The factory numbers would seem to bear this out: Before the last recession there were 17.2 million U.S. manufacturing jobs and today there are 14.2 million. People like CNN's Lou Dobbs would have you believe that all of those jobs have been spirited away to China, India, and other foreign locales. While some undoubtedly have, many blue-collar jobs disappeared simply because of increased efficiency. U.S. productivity growth in manufacturing has averaged more than 5 percent annually over the last three years. At that rate, in a little over 13 years American workers will be twice as productive as they are today. They'll be able to fill their orders with better and cheaper products without as many laborers.

Our factory sector is not hollowing ...