The Manufacturing Multiplier Effect is essential in today’s economy and means much more than just the end product that is produced and brings something new to our society. Take a moment and think about the process: raw materials are transported from mines, ongoing laboratory tests develop the product’s uniqueness, wholesalers and service providers devise market strategies for consumers, and products are shipped throughout the country (and sometimes the world) via trucks, ships, and planes. From the initial concept through mass production, the manufacturing process provides a great value and positive local economic impact in communities fortunate enough to host them.
Are you wondering how the term “multiplier effect” came to be? Unlike other economic sectors, manufacturing presents an opportunity to make a unique impact in the local community where the factory resides. This "value chain" effect is broad because the manufacturer employs workers of all educational levels: high school level production through PhD-level research and development with various support functions from accounting to human resources. Given the large concentration of well-paid employees with dispensable income and families employed by the factory, local economies benefit from the additional tax base, teachers are needed to educate factory employees’ children, and restaurants, along with other forms of entertainment, flourish.
In fact, manufacturing’s value chain accounts for one-third of the United States economy. For every $1.00 of manufacturing value created in the United States, $3.60 in additional economic activity is generated throughout the rest of the public. Another study shows that every manufacturing job created in the United States leads to approximately 3.4 non-manufacturing jobs to take the product from start to finish.
So, the next time you are stopped by a train or feel semi-trucks delay your daily commute, pause for a moment and realize that factories are good for the long-term health and development of your community and perhaps that minor inconvenience isn’t so bad after all.