Manufacturing, Jobs and the Future

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Posted by: briansittley Comments: 0 0 Post Date: June 2, 2016

jobs_cartoonBy virtually any measure, 2015 was the record year for manufacturing production in the United States, according to Michael Hicks, a professor of economics and director of the Center for Business and Economic Research at Indiana’s Ball State University.  (As purveyors of manufacturing software and process solutions, we take special note of these kinds of things.)
Currently, manufacturing in both the USA and Indiana are running at record levels, with inflation adjusted dollars perhaps being the best, though not only, metric which proves the statement.
But record manufacturing volumes do not equate to record manufacturing employment.  And they likely never will, which is why we’re wise to cast a wary eye on any of the current political candidates seeking to convince us of their promise to “bring back jobs and manufacturing to America.”  Today we’re attaining those record production levels with fewer workers.  As we’ve quoted him before, Bruce Springsteen’s iconic line from the old hit ‘Glory Days’ still rings true here: “Them jobs are goin’ boys, and they ain’t comin’ back.”  We need to adjust, wisely.
Indiana alone has lost a quarter million manufacturing jobs since the peak factory employment year of 1973.  The country has lost seven and a half million manufacturing jobs since 1977.
Contrary to the fiery rhetoric heard these days, it wasn’t NAFTA that took those jobs.  In fact, in the 40 years since peak manufacturing, “Indiana has created more than 1.4 million non-manufacturing jobs and the U.S., roughly 75 million,” according to Hicks.
And while trade deficits have indeed cost us jobs, the high-end estimates say we have 1.5 million fewer manufacturing jobs across the nation because of foreign trade.  All the other 6 million plus are due to mechanization, better technology and improved production practices.  The fact is, today’s typical factory worker produces about twice as much “stuff” per hour as they did 40 years ago.  For every manufacturing job lost to trade, nearly nine have been lost to machines.
But trade also creates jobs, notes Hicks.  We have 7 million more logistics related jobs alone, likely attributable to increased trade since the 1970s.  For every manufacturing job lost since the 1970s, we have created ten elsewhere, and for every job lost to trade we have created one hundred more jobs elsewhere in the economy.
And so it is that “bringing jobs back” from [fill in the foreign nation here] isn’t going to happen.  In fact, it’s the folks with, as Hicks puts it, “master’s degrees in robotics working in Palo Alto” that have taken those jobs.  And it was inevitable.  Progress marches in one direction.  Companies seek continuous improvement, as well they should.  You can’t blame them.  But manufacturing job losses are a reality.
And while those jobs may not be coming back, through education, advanced training, apprenticeship programs, trade schools and a whole lot more practical and creative thinking, we can and must come up with better ways to fill the jobs that are needed, and that will provide our employment base – both inside and outside manufacturing – for the generation ahead.  Just try not to fall for all the easy rhetoric in the air today — from either side.

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