Where are the manufacturing jobs going?

By February 9, 2006Economy

Business is UpSince mid-2000, U.S. manufacturing employment has fallen by 3 million. Half of that decline took place during the 2001 recession and the other half has taken place during the 4-year old recovery. Today, U.S. manufacturing output is at an all-time high, yet factory employment is at its lowest level in more than 50 years. What gives?

Some claim that jobs are going overseas. So where are manufacturing jobs growing? China, might be a knee jerk reaction. But it would be wrong. Since mid-2000, manufacturing employment in mainland China has fallen by 11%. Then what about our NAFTA partners? Nope. Both Mexican and Canadian factory employment have fallen since 2000, as has manufacturing employment in Japan, Germany , the UK, France, South Korea, the Netherlands, Sweden, Australia, Belgium, Indonesia, Ireland, and Poland.

In fact, of the top 28 manufacturing countries in the world (which account for 90 percent of global manufacturing output), just 5 have seen increases in manufacturing employment over the last 5 years: Argentina, Brazil, Spain, Thailand, and Turkey.

The fact is that a downturn in manufacturing employment has been a global phenomena over the past half decade.

In the case of the U.S., half of the job losses can be attributable to an acceleration in productivity growth, which during the current recovery is growing 72 percent faster than productivity growth during the prior 4 manufacuturing upturns. The other half of the job loss is due the fact that the current recovery has not been as robust as previous ones. This was especially true in 2002 and 2003, when manufacturing output averaged under 2% growth and when over 90% of the post recession job losses in manuacturing took place.

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