U.S. Employment Comparison 2017: Restaurant Jobs vs Manufacturing Jobs

restaurant jobs vs manufacturing jobs
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The shift to restaurant jobs vs manufacturing jobs represents a new American economy, one that may ultimately weaken the middle-class.

President Donald Trump ran his campaign on a promise to “Make American Great Again.” Embedded in that catchphrase was the veneration of an old America, one where the country made things. Trump extolled the virtues of American manufacturing and well-paid blue-collar jobs that allowed people with less education to rise up to the middle-class all the same.

But the reality is that manufacturing is struggling to claw its way back to the prominent role it once filled in the American economy. U.S. employment statistics speak to a trend that shows continued manufacturing jobs loss across the U.S., while another industry steps in to become an employer of millions of Americans—that is, the huge spurt in restaurant jobs growth.

Manufacturing Sector Jobs Declined in 2017

The manufacturing sector has long been in decline in the U.S. From 1979 to 1999, the number of manufacturing jobs in America dropped from 19 million to 17 million, a modest decline.

But that manufacturing jobs decline sharpened dramatically when, over the next decade, from 1999 to 2009, the number of jobs sank to 12 million. While much of that was spurred on by the beginning of the Great Recession, other long-term factors have been at play, whittling the industry down for years.

While many will say that robotic automation has swooped in and claimed these manufacturing jobs, that’s not entirely true. Many countries, like Germany and Japan, who have enjoyed trade surpluses in recent years, have also seen a decline in their manufacturing sectors despite their strength relative to the U.S.—which has long been suffering massive trade deficits.

The reasons behind the decline are many, but technological innovation is widely considered to be the main driver. Now that doesn’t mean robots marched in and swept away human workers. Instead, it means that as assembly lines have evolved from hand-made goods to automated work-lines, employees need to have an understanding of how the machines work in order to function alongside them.

What that means is that the demands of a manufacturing job suddenly stopped being primarily blue-collar tasks, and therefore we’ve seen people be cut out.

While Deloitte Consulting and The Manufacturing Institute forecast two million new manufacturing jobs in the next decade, those jobs will require an expanded skill set that blue-collar workers will need re-education and training in order to fill.

And of course, jobs leaving the U.S. for developing nations where wages are far lower have also piled on some of the decline the U.S. economy has experienced in the manufacturing sector, although the majority of the shift is a result of technology.

As we’ll see later, the shift is having an impact on the restaurant jobs vs manufacturing jobs paradigm shift the U.S. is undergoing.

Restaurant Jobs Have Seen Huge Growth in 2017

Restaurant jobs, on the other hand, are undergoing an absolute boom.

Between January 2008—the height of employment before the Great Recession—and February 2010—the nadir of the economic fallout—the U.S. total nonfarm employment fell by 8.7 million. The U.S. has been on a long streak of prolonged economic recovery, however, with a years-long trend of economic growth, job gains, and otherwise signs of a recovering economy.

But the numbers don’t tell the whole story. Consider that in May 2014, when the economy was considered to have made a full recovery in terms of jobs numbers, leisure and hospitality accounted for nearly one out of every five of the jobs added during the recovery. That amounts to 1.6 million jobs over that time. While other industries recovered new jobs, these restaurant jobs were largely being created.

Consider that more than a third of the new jobs created in Cleveland since 2015 are in the restaurant sector. New Orleans has similar numbers, except that the trend extends as far back as 2010.

In June, more than one-quarter of all the jobs gained were in the food service industry, mainly in full-service restaurants.

Much of this is a reflection of a changing food culture in the U.S. Americans now spend about 50% of their food budget on restaurants, doubling the 25% that U.S. citizens spent at restaurants in the 1950s. With that much more money being injected into the industry, it makes sense that more jobs would open up.

The restaurant jobs vs manufacturing jobs shift is trending in one direction—by 2020, more people will work at restaurants than in manufacturing.

So what are the implications of restaurant jobs vs manufacturing jobs for the economy at large?

Manufacturing Jobs vs Restaurants Jobs in 2017

The shift in the economy, at this point, is undeniable. Statistic after statistic shows that manufacturing jobs are only becoming increasingly harder to create and sustain for blue-collar middle-class workers, while restaurants have entered a boomtime that is seeing employment explode in the sector. But this is not an even trade.

The average income for a U.S. manufacturing worker, excluding managers, is $44,000 a year. That accounts for a 2.8% jump, adjusted for inflation, versus a decade ago. The labor force as a whole has gained eight percent by comparison, so stagnating wages are definitely an issue for the industry.

But compare that to the typical restaurant job, which pays about $12.50 an hour, and you can see that the U.S. employment scenario developing is not a positive one.

With massive wealth inequality a topic of much discussion in the U.S. these days, an economy growing more reliant on low-wage service industry jobs like the jobs we’re seeing created in the restaurant business is bound to only intensify that divide.

In terms of restaurant jobs vs manufacturing jobs, there doesn’t seem to be much that can be done to derail this trend.

Furthermore, the confidence being created surrounding the American economy may be built on a foundation of sand, with more people being employed in lower-wage work like the service industry.

While movements like the Fight for 15—a political push for a raise of the minimum wage to $15.00 an hour across the country—would massively benefit those working in the restaurant industry, there’s yet to be substantial legislative progress in that direction.

The Future: Will Restaurant Jobs Stay Ahead of Manufacturing Job Numbers?

With the restaurant jobs vs manufacturing jobs clearly edging towards the service sector, what does that mean for the future of the U.S.? Can manufacturing jobs make a comeback?

Trump has promised to bring them back, but the president has been embroiled in massive political battle after political battle since he assumed office, with many of his legislative promises failing or being mired in Washington dogfighting.

Consider that the Affordable Care Act (Obamacare) still remains the law of the land, Trump’s executive orders have been repeatedly challenged by the courts, the border wall has yet to begin construction, and Trump’s upcoming tax plan is facing similarly tough opposition.

Whether or not Trump would be able to bring back manufacturing jobs at this point is irrelevant—the president is struggling to pass many of his landmark campaign promises, with manufacturing jobs falling further and further down his to-do list. Or rather, must-do list.

But what would that strategy look like?

In order to bring back manufacturing jobs—a sector that has shown massive increases in productivity even as employment has gone down—requires the retraining mentioned above. Retraining programs, however, have a mixed history of success. They have trouble drawing people in, they can often be overly taxing on older workers, and the financial realities oftentimes prevent employees from going back to school for two years while on a reduced salary or no income at all.

A shift towards apprenticeship programs has been put forward as a solution to the manufacturing jobs future, but that would require a massive overhaul and refocusing of the American jobs and education systems.

All this to say that, for the moment, it seems that the restaurant jobs vs manufacturing jobs war has already been fought and decided.

 

Sources

Restaurants help feed job growth: how the leisure and hospitality industry fared after the recent employment downturn,” Bureau of Labor Statistics, July 2014.

US manufacturing jobs have declined. This is where they’ve really gone,” World Economic Forum, May 10, 2017.

In U.S. manufacturing, factory jobs have gone high-tech, but workers have not,” Toronto Star, August 15, 2017.

Restaurants Are the New Factories,” The Atlantic, August 9, 2017.

Factories Are Still Giving Way to Restaurants,” Bloomberg, August 4, 2017.

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