Manufacturing lost 28,000 jobs in January and 269,000 jobs over the previous 12 months, according to the U.S. Bureau of Labor Statistics (BLS). David Huether, chief economist for the National Association of Manufacturers and the author of the quarterly NAM/IndustryWeek Manufacturing Index, reports that "while production employment in manufacturing edged down by just 2,000 [in January], over the past year jobs on the factory floor have dropped by 106,000." Peter Morici, an economist at the University of Maryland, observed in early February that "over the last 90 months manufacturing has shed more than 3.4 million jobs." And between now and 2016, the BLS estimates another 1.5 million manufacturing jobs will vanish.
In 1996, manufacturing jobs accounted for 12.8% of all jobs in the United States; in 2006 that percentage dropped to 9.4%; by 2016, according to the BLS, it will fall even lower, down to 7.6%. So both the number of manufacturing jobs and the percentage of manufacturing jobs vs. all others (mostly services-providing jobs, which encompasses a lot more than you might think) will continue its long slide. In case you start wondering why politicians don't seem to get very worked up about the decline in manufacturing employment, maybe it's because their own studies indicate that not only has that ship already sailed, but in fact it's now considered lost at sea.
Nevertheless, there are two very strong arguments against giving U.S. manufacturing the last rites:
- The U.S. manufacturing sector accounts for $1.5 trillion in gross domestic product, which if it was a country would make it the eighth-largest economy in the world.
- Manufacturing productivity, according to NAM, has grown by 94% over the past two decades.
See Chain Reactions: David Blanchard's blog about supply chain management.
"More laws and regulations give employees more rights and manufacturing employers fewer rights. We spend so much time minding our P's and Q's so our workforce is not taken advantage of that it leaves little time to plan growth strategies for our company. Workforce availability is quickly dwindling. We will have to resort to hiring immigrant workers and outsourcing more processes if we can't find enough local help."
"America needs to wake up. We continue to outsource manufacturing, as well as other jobs, to foreign suppliers. Some of these suppliers are our friends, but many are not. The advantage a country like China has over the U.S., even though it is touted as a labor savings, is the currency valuation. There is not an Indian or Chinese worker that would be willing to work in the U.S. for $.75 - $1.50 an hour. What is wrong with this picture?"
"The biggest challenge facing manufacturing today is the lack of vision. Everyone wants to make the money without the investment in the equipment and employees to do so. Unattended manufacturing is still not where it should be and too many machine programmers have no real world experience. The shortage of knowledgeable manufacturing engineers grows while the importance of replacing them is overlooked."
"Management in the U.S. has one fundamental problem: They truly do not appreciate or understand the importance of their workforce. I estimate that in 90+% of manufacturing facilities across the country workers are viewed as expendable commodities. It is in those companies that value their workers as their companies' most valuable asset that truly exceptional performance is achieved."
"For the U.S. to be more competitive in the new world economy, we must start with the basics -- a strong energy trade and energy policy, commitment to education in technology and renewable energy technology. Without a serious effort by industry and the state and federal governments, we will not be able to sustain and grow vital industry -- not only for economic growth but the pursuit of happiness for our generation and especially our children."
"I have a real fear that not much is going to be left when the U.S. no longer has a solid manufacturing sector."
David Blanchard is IW's editor-in-chief. He is based in Cleveland. Also see Chain Reactions: David Blanchard's blog about supply chain management.