America’s Lost Manufacturing Jobs Unlikely to Come Back

Job Losses
iStock.com/Tom Merton

Manufacturing Jobs Are Declining in the United States

American manufacturing jobs have been in decline over the past 40 years. During the same period, jobs in the services sector, primarily in the healthcare and education sectors, have jumped.

Back in 1975, manufacturing jobs in America accounted for 22% of the total private-sector jobs in the country. Today, that number has fallen to only about 8.5%. In the same period, jobs in the healthcare and education sectors have risen from single digits to 16% of U.S. private sector jobs.

The decline in manufacturing jobs has partly been because of the rise of technology, and partly because of globalization. The United States is the second-biggest manufacturing power in the world, after China. However, technological efficiencies have allowed the U.S. to produce more output while employing less human labor. Henceforth, technological innovations, particularly the automation of manufacturing workflows, have caused factory jobs to shrink.

America’s manufacturing industry boomed when America’s middle class was growing. That class made up the biggest consumer base for these manufacturers.

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However, partly due to globalization, the American middle-class has been shrinking. In contrast, the middle class in the emerging markets of India and China has been expanding. This is why many global manufacturers are choosing to set up their factories in these fast-growing economies where they can find a bigger consumer market, with an added bonus of cheaper labor.

General Electric Company is a recent example of this phenomenon. The global industrial manufacturing conglomerate laid off workers at its transportation factory in Erie, Pennsylvania and moved its train production to India.

Manufacturing jobs in the United States peaked in the late 1970s. However, the decline in manufacturing jobs had already begun in 1953, when 26% of the total jobs in the U.S. were in manufacturing.

Chances that the country can go back to the 1950s level of employment in manufacturing are very slim. It would require the United States to add nearly 7 million jobs in the manufacturing industry which, according to a CBS editorial, is “pretty unlikely.”

Sources
The story of US jobs over the past 40 years is the story of Hampden County, Massachusetts,” Quartz, June 16, 2017.
Manufacturing jobs in America: They’re not coming back,” CBS News, June 20, 2017.

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Categories: Job Cuts, News

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