Made in America: A Brief History of U.S. Manufacturing

Feb. 17, 2011— -- With the country still mired in high unemployment, more people are asking tough questions about American manufacturing and what it means for jobs.

In recent months, President Obama has made his case for a reinvigorated manufacturing base.

"We want to create and sell products all over the world that are stamped with three simple words: 'Made in America.' That's our goal," the president said last December.

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As "ABC World News With Diane Sawyer" launches our "Made in America" series, it's a chance to look back at the history of American manufacturing and the gradual shift away from assembly lines toward high-knowledge service industries.

Through much of the 20th century, American manufacturing functioned as the nation's economic engine and formed the basis for a large middle class. The country rose to its place as a global economic superpower as customers clamored for the latest American-made products, from cars to refrigerators to television sets.

"By providing opportunities for people not just to farm, it helped raise average income and average living standards," said Doug Irwin, a professor of economics at Dartmouth. "By the 1920s and '30s, a solid 20 percent of the labor force was in manufacturing."

Industrialization changed the fabric of American life, encouraging workers to leave behind family farms and move closer to factories in cities and eventually suburbs. Communities built up around industrial hubs, from Detroit's auto boom to Pittsburgh's steel mills.

New industries and manufacturing jobs allowed workers to move up the economic ladder and increase their income without needing high levels of education. Even with limited skills, workers could leverage their experience in low-paying industries like textiles to take higher-paying jobs on assembly lines.

"The transition from low wage to high wage manufacturing jobs was much more open to people," Irwin said.