Definition of Hollowing out:
Hollowing out is the deterioration of a country’s manufacturing sector when producers opt for low-cost facilities overseas. Some economists argue that the economies of Japan, the United States and other developed nations are being hollowed out, posing a threat to full employment.
Due to rising manufacturing costs in developed nations, many companies are looking to less-developed nations to set up manufacturing facilities in hopes of reducing costs. These developed countries are being hollowed out, which poses a threat to many factory workers because they could lose their job to someone in another country.
Over the past few decades, the manufacturing sectors of some of the world’s leading economies have contracted significantly due to hollowing out. After peaking in 1979 at more than 19 million (L2, p. 2), the number of U.S. manufacturing jobs shrank to roughly 12 million in 2013 (L4, p. 28). Other advanced economies have experienced a similar trend. In Japan, for example, manufacturing has fallen from 35 percent of output in the 1970s to 18 percent in 2009. This has had a disproportionate impact on cities and rural communities that relied heavily on nearby plants for employment.
Meaning of Hollowing out & Hollowing out Definition