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Nov 5, 2015
Are Manufacturing Jobs Coming Back?
About a month ago I attended ”U.S.-Mexico Manufacturing Back in the Race,” a conference hosted by the Federal Reserve Bank of Dallas. There was much discussion about whether manufacturing jobs are coming back.
The answer? No, they’re not, especially the manufacturing jobs we were accustomed to seeing in the past. New manufacturing does not simply mean production workers.
More notes from the conference:
- Manufacturing output is growing, but not factory jobs.
- This is a global trend, not just a domestic one. Manufacturing work is declining in almost all high-income countries and many middle-income countries.
- No jobs for high school dropouts.
- U.S. manufacturing labor force is increasingly educated.
- Job losses are steepest for less-educated workers.
- Why the job dearth?
- Labor-intensive industry has left and will not return (e.g., apparel).
- Remaining sectors are increasingly capital intensive.
- Vertical disintegration: Some manufacturing-related work is no longer in manufacturing sector, but is counted in services, logistics or information sectors.
- No longer where the money is. Nonsupervisory work pays less in manufacturing, on average, than in services, construction, utilities, wholesale.
- Average wage in manufacturing is higher than in leisure and retailing, but gap is narrowing.
- Manufacturing is not the same as production.
- Manufacturing increasingly involves managing supply chains rather than physical transformation.
- Most manufacturing workers do not produce goods.
- Labor matters less. Compensation share of manufacturing value added has fallen.
- Analysis needs to look at service suppliers: purchased services account for rising share of gross value in autos, aircraft, apparel and textiles.
- Where services are created affects distribution of the economic gains from manufacturing.
- Mismeasuring manufacturing: Intellectual property accounts for growing share of value related to manufacturing.
- Intellectual property contribution to manufacturing sector is not adequately captured in data measuring domestic value added.
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