Progress Pond

The Manufacturinig Jobs Crisis

Over the last 5 years, the manufacturing sector has taken a tremendous hit.  Total number of jobs has precipitously declined. Manufacturers are taking advantage of international wage arbitrage and sending jobs overseas.  The trade and balance of payments deficits have ballooned, indicating the US is sending a larger percentage of its wealth overseas instead of reinvesting in the US.  
According to the Bureau of Labor Statistics, the US had 17,101,000 manufacturing jobs in January 2001.  September’s preliminary number was 14,234,000.  This is a loss of 2,867,000 jobs in 5 years.  Higher productivity is part of the reason for this decrease; factories are now able to essentially produce more with less.  However, an increase in productivity is not the sole cause of this loss.  When companies can produce a good in another country for less because the labor costs are far lower, they will move the factory.  Regrettably, the US does not keep statistics on the number of jobs lost directly to foreign displacement.  

Manufacturing jobs pay well.  According to the Bureau of Labor Statistics, the September average hourly wages of production workers was $16.57/hour, or $31,814/year.  While this is not a “king’s ransom”, it’s not bad.  

The National Association of Manufacturers has statistics on each state’s manufacturing jobs.  I looked several of the larger states and found the following.

California had 1,857,000 manufacturing jobs in 2000 and 1,539,000 in July 2005 for a net loss of 318,000.  The average annual manufacturing pay in 2003 was $56,500.

Texas had 1,068,000 manufacturing jobs in 2000 and 891,700 in July 2005 for a net loss of 177,000.   The average annual manufacturing pay in 2004 was $51,300.

New York had 750,000 manufacturing jobs in 2000 and 581,000 in July 2005, for a net loss of 169,581.   The average annual manufacturing pay in 2004 was $50,254.

The bottom line is the US is literally bleeding high paying manufacturing jobs.  These are jobs that helped to create and sustain the middle class – the backbone of the economy.  By letting these jobs disappear, the US is turning its collective back on the middle class, allowing them to fall into economic ruin.

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