Over the past decade, as 5.7 million manufacturing jobs were vanishing, many prominent economists and policymakers said the job loss was inevitable. They reason, they said, wasn’t a lack of national manufacturing policy, growing incentives for U.S. firms to move jobs offshore or flawed trade policies.

No, they pointed to “productivity” as the main culprit. With more efficiency and higher productivity, fewer workers are needed. Case closed. But a new report from the Information Technology and Innovation Foundation (ITIF) reopens the case.

"Worse Than the Great Depression: What the Experts Are Missing About American Manufacturing Decline" finds that not only are the methods used to calculate productivity flawed, but the “U.S. government statistics significantly overstate the change in U.S. manufacturing output, and by definition productivity.”

According to the report:

A large share of manufacturing jobs was lost in the last decade because the United States lost its competitive edge for manufacturing. It was due to a failure of U.S. policy, not superior productivity.

Click here for the full report and here for video and audio from an ITIF forum on the report.

For another look at how the theory that productivity leads to inevitable job loss is flawed, see this recent column from Howard Wial of the Brookings Institution.