Industrial Insight

manufacturing employment | February 9, 2015

Putting U.S. Manufacturing Growth In Perspective

By Thomas Hemphill & Mark Perry

According to the Bureau of Labor Statistics (BLS) there were 17,619,000 Americans employed in the manufacturing sector in January 1998; by January 2010, this figure had declined to 11,462,000, or 6,157,000 factory jobs lost in 12 years – an average annual decline of 513,000 jobs and a 35 percent overall decline in manufacturing employment over a 12-year period. Focusing on the last decade, the BLS employment data offer a sobering perspective on the manufacturing sector’s growth in employment in recent years Between 2010-2014, 762,000 new U.S. manufacturing jobs were created over that five-year period, at an annual average rate of 152,400 new jobs. In contrast, during the preceding five-year period (2005 to 2009), 2.8 million manufacturing jobs were lost in the U.S. economy, or an average decline of 562,200 jobs per year. Placed in perspective, this means that only 762,000 and about 27 percent of the 2.8 million manufacturing jobs lost during the five years between 2005 and 2009 were actually recovered in the last five years (2010-2014) of economic recovery. And compared to the start of the Great Recession, American manufacturers employ 1.4 million fewer factory workers today than in December 2007.

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The fact that the total number of manufacturing jobs in the U.S. economy will only increase by 6.6 percent over the next decade should not be surprising. Beginning in the late 1980s, American manufacturers began to replace their employees working in routine production tasks with capital investment in advanced computer technology and robotics. Low- and un-skilled employees are gradually being replaced with more highly skilled and educated employees who now operate the advanced manufacturing technology automating these production tasks. Capital has been replacing labor in the manufacturing sector for several decades and we can expect that trend to continue. As a result of increased automation and advanced robotic technologies, the productivity per manufacturing employee has been increasing, reflecting employees who now are more highly skilled and are more educated than the factory workers of the past.

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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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