Contact information

MidTide Media 123 Pleasant St Suite 300. Marblehead, MA 01945.

Before Trump, one of the popular lines in the Democratic party was that companies outsourcing jobs were a significant threat to the American worker. Free trade agreements opened American jobs–particularly manufacturing–to under-cutting from cheaper foreign competition with lower costs of living.

Now Trump and the GOP are on that train, and the Democrats are less gung-ho about it. The message is surprisingly similar–still directed towards corporations, but with a greater focus on the trade policies of other countries like China.

Let’s dig into the data: what happened to American manufacturing jobs?

This one’s a doozy–but you’ll learn a lot.

Total Employment

 Bureau of Labor Statistics: https://data.bls.gov/pdq/SurveyOutputServlet
Bureau of Labor Statistics: https://data.bls.gov/pdq/SurveyOutputServlet

Manufacturing jobs took a steep decline starting in the 2001 recession, but the slide kept going during the recovery. They took another sharp drop in the Great Recession, but have started creeping back up. Total employment has dropped from about 18MM to about 12MM.

What’s driving the change?

Is the US Manufacturing Sector Shrinking?

We can look at this two ways: as a percentage of GDP and as total output. Since we’re looking at total employment, total output makes more sense.

Looking at data from the Fed, we actually see that US manufacturing output (inflation adjusted) is at an all time high.

As a percentage of GDP, it’s dropped from 16.5% to 12.5% between 1997 and 2014–meaning it has grown more slowly than the services sector. This is actually directly in line with declines  across the entire world. (Note the UN measures manufacturing slightly differently from the World Bank but the trends are the same.)

Ball State University has a pretty good (short) report you can read here.

What’s Driving the Change?

There are two primary culprits: trade is one, automation is the other.

Given that US manufacturing output is at an all-time high, it cannot be the case that a net loss in jobs is due to a net offshoring of manufacturing. We’re building more stuff than we’ve ever built before–we’re just doing it with fewer people. (And, given that the prices of most manufactured goods continue to drop thanks to technology and efficiency, we’re actually making even more stuff and just spending less on each individual unit of stuff.) Productivity per worker across manufacturing is up 68% between 2000 and 2010 alone (pg 6). Even the much-bemoaned steel industry is producing more steel than in 1980, despite losing half its labor force. 

The primary driver of the decline of US manufacturing jobs is automation. In the long-term, this is a good thing–in the 1790, 90% of Americans were in agriculture. We’re definitely better off by having more than 10% of Americans doing stuff other than making food (the % of the labor force in agriculture is now 2%, by the way). And, as the economy chugs along, it creates different jobs. 

What About Trade?

Trade is not a zero factor. An MIT paper suggests 2.0 – 2.4 million manufacturing jobs were lost due to the rise in import competition from China between 1999 and 2011. This means that manufacturing production would be even higher had those jobs not left, but not all of those jobs would still remain: domestic production prices would invariably be higher if the work was re-shored, which would mean lower demand for the products than currently exists from cheaper sources.

Other Factors

Some of the drop is due to the fact that we’re just using less heavy stuff than we used to. Cars are lighter and use less metal. Buildings are better engineered and require less material per floor. Between 1998 and 2012 (pg 4), paper production dropped 30%, plastics and rubber dropped 10%, furniture production dropped 35%, mineral production dropped 24%, wood dropped 4% and fabricated metal products dropped 9%. We run physically leaner. Lots less physical stuff goes into your iPhone than went into your CD player + phone + compass + VCR + calculator, etc.

Note also that software development is not considered manufacturing.

Another Important Question: Wages

The reason we’re talking about manufacturing at all is really income. The question to ask is not, “are there enough manufacturing jobs?” but “are enough jobs available for Americans?” and “are people getting paid less for the jobs replacing these?” 

Looking at the BLS Real Unemployment rate (which includes those who are highly underemployed or marginally attached to the workforce), we’re sitting at 9.4%, which is about equal to where we were in 1995 and 2005. The lowest recorded in the modern age was 6.8% just before 9/11. So there’s work to do, but it’s not historically terrible.

Most people have jobs–but what about their pay? We can look at this a few ways.

Median Income hasn’t quite returned to the highs of 2000–it’s at about $56,500, compared to $58,000. This is a measurement of how the very middle of the pack is doing, so it’s better than mean income, but it’s not perfect.

So the dead center is doing alright. What if we break it down into quintiles?

This is from the Census Bureau. If we look at the lowest and second fifths of the population–so the lower 40%–their wages (inflation adjusted) have barely eeked up since 1970. 

Education correlates very, very closely to this. From the BLS:

If you’re less educated, you earn a ton less and are far more likely to be unemployed.

Here’s Why People Care About Manufacturing

Manufacturing jobs typically don’t require a college degree (the engineers and managers in the factory typically have them, but floor workers don’t). So if manufacturing pays well, it’s a door for people with lower education to make a better living. Looking again at BLS, here are the manufacturing-related major occupational sectors and their average incomes:

  • Production: $36,220
  • Installation, Maintenance, and Repair: $45,990
  • Construction and Extraction: $47,580

If those are going away, what are they being replaced with?

The fastest growing sectors are: leisure and hospitality, health care and social assistance, educational services, and professional and business services. The latter are primarily occupied by people with higher education levels (leading a lot of the middle-upper class income growth). Teachers get paid about $56,370 on average but also require degrees.

How do these pay? (Again from BLS)

  • Personal care and service: $25,650
  • Food preparation and serving: $22,850 (note this doesn’t include tips so it’s more complicated)
  • Healthcare support: $29,520
  • Building and grounds cleaning and maintenance: $27,080

In short, higher paying jobs are being replaced by lower-paying ones. And besides manufacturing, there’s a lot of head-scratching about how to help lower-paid people attain more valuable occupations.

So Can the Manufacturing Jobs Come Back?

No, but that’s a post for another day.

24 Comments

  • Dave, March 4, 2017 @ 1:00 pm Reply

    Very interesting and informative. A confirmation of what I have been saying for almost a decade. Modern manufacturing is not manpower intensive, it is machine intensive. Personal example I was a CNC machine operator so I saw first hand what the author here is saying. A product we manufactured on the CNC machine needed to be produced without the CNC machine, the machine was broke (old School). It took 4 people approximately 32 hours a piece to produce 300 pieces for a 600 piece order. We received the part for the CNC machine and one person produced the last 300 pieces in about 11 hours. Do the math, with modern production methods this nation will never see same number of manufacturing jobs as in the past.

  • 원샷홀덤, March 30, 2021 @ 12:17 am Reply

    … [Trackback]

    […] There you will find 56736 more Information on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • world market link, May 2, 2021 @ 12:19 pm Reply

    … [Trackback]

    […] Read More Info here on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • decals in north carolina, May 26, 2021 @ 12:11 am Reply

    … [Trackback]

    […] Information on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • visit the website, June 26, 2021 @ 12:31 pm Reply

    … [Trackback]

    […] Find More to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • microsoft exchange cloud, June 26, 2021 @ 8:50 pm Reply

    … [Trackback]

    […] Read More here to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • unies cvv shop, December 29, 2021 @ 8:19 pm Reply

    … [Trackback]

    […] Here you can find 94747 additional Information to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • สโบเบ็ต, January 27, 2022 @ 12:47 am Reply

    … [Trackback]

    […] Find More Information here on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • rent scooters in madeira beach, March 24, 2022 @ 1:45 am Reply

    … [Trackback]

    […] Read More to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • sitemap, April 22, 2022 @ 11:25 am Reply

    … [Trackback]

    […] Read More here on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • nova88, July 5, 2022 @ 9:23 pm Reply

    … [Trackback]

    […] Find More on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • สล็อตวอเลท ไม่มีขั้นต่ำ, July 23, 2022 @ 10:54 pm Reply

    … [Trackback]

    […] Read More on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • จำนองบ้าน, October 2, 2022 @ 1:36 am Reply

    … [Trackback]

    […] Info to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • passive income streams, October 13, 2022 @ 12:37 pm Reply

    … [Trackback]

    […] Find More on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • marijuana gummy bear online sale, October 16, 2022 @ 11:35 am Reply

    … [Trackback]

    […] Find More here to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • Manga, December 11, 2022 @ 3:00 pm Reply

    … [Trackback]

    […] Find More here on that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • Hidden Wiki, January 3, 2023 @ 4:29 am Reply

    … [Trackback]

    […] There you can find 85239 additional Information to that Topic: reconsidermedia.com/where-did-all-the-manufacturing-jobs-go/ […]

  • winter coffee shop, October 9, 2023 @ 10:07 am Reply

    winter coffee shop

  • bossa nova piano relaxing, October 11, 2023 @ 8:43 am Reply

    bossa nova piano relaxing

  • study music, October 11, 2023 @ 10:14 pm Reply

    study music

  • relaxing music, October 12, 2023 @ 9:30 am Reply

    relaxing music

  • gym music 2023, November 12, 2023 @ 6:16 am Reply

    gym music 2023

  • nightly snow, November 29, 2023 @ 8:30 am Reply

    nightly snow

  • winter jazz, December 31, 2023 @ 3:18 pm Reply

    winter jazz

Leave a Reply