Employment:
| Average 1998-2010: | -508,000 |
| Average 2010-2022*: | +95,000 |
| 2022 only**: | +420,000? |
* Using BLS’ annual averages
** Gain from November 2021 to 2022 is +420,000; final full-year 2022 figure will likely differ slightly.
WHAT THEY MEAN:
First reaction to the U.S. International Trade Commission’s “Distributional Effects of Trade and Trade Policy on U.S. Workers” report, out November 14: Seems a bit mis-titled. The report is much more an in-depth survey of economic literature on, and summaries of testimony relating to, “import shocks” and manufacturing job loss in the United States than a 360-degree survey of the full set of questions inherent in the title, which include import competition but also the role of exports in rural and agricultural communities, the effect of tariff systems and trade remedy laws on consumers and ‘downstream’ industries and their communities, or services trade and the digital world.
Second reaction: Looking at the focus on import shocks and manufacturing job loss, should academia start asking some new questions?
As the ITC conducted its hearings, read up on the lit., and drafted its chapters over the past year, the U.S. was adding a net of about 1,150 manufacturing jobs every day — in total, 420,000 from November 2021 through November 2022, almost certainly making 2022 the largest upward annual jump since 1984. A random sampling of states finds 14,400 net new manufacturing jobs in Arizona, 39,200 in California, 1,300 in Delaware, 6,200 in Colorado, 15,600 in Michigan, 4,900 in Nevada, 8,500 in New York, 12,700 in North Carolina, and so on. And though the 420K annual total is exceptionally high, it isn’t simply an overheating-economy anomaly. Apart from COVID-stricken 2020, in fact, the U.S. has added net manufacturing jobs every year since 2010, marking the longest period of expansion since the 1960s.
A brief history of the national manufacturing-job trajectory, then some possible new-era questions:
1. Peak: Manufacturing employment in the U.S. peaked as a share of the workforce in the mid-1950s at about 30% of all jobs. In 1952, in the era of Eisenhower, Sloan, King, Reuther, and Dulles, 15.3 million of America’s 50.3 million workers went off to factory jobs each morning.
2. Transition: The Bureau of Labor Statistics’ total counts of manufacturing jobs continued to rise for another generation, peaking at 19.6 million in 1979. On the other hand, employment in other industries grew faster and manufacturing employment steadily fell as a share of employment, to 22% of 1979’s 90.1 million jobs. Following that came a long decline to 16.8 million by 1992; then a modest rebound to 17.6 million in 1998 (14% of 126 million workers) as the 1990s boom approached its crest.
3. Drop: In the next 12 years, actual production continued to grow — the BEA reports $1.48 trillion in “real manufacturing value-added” GDP as of 1998, and $1.94 trillion in 2010. But employment dropped fast, falling for 12 consecutive years to a low of 11.5 million (9% of 130 million jobs) in early 2010, with about 60% of net job loss coming in the 2001/2 recession and the 2008/9 financial crisis.
This experience sparked intense debate in the academic and policy worlds, on Chinese competition, import shocks, automation and robotics, and the experience of manufacturing-reliant communities. As the ITC’s report suggests, the debate continues today. But as it goes on, manufacturing employment trends have reversed, and by now have probably risen for long enough to justify a new phase and some new questions:
4. Rebound?: Since the 2010 nadir, manufacturers have added jobs in 11 of the last 12 years* — the only exception, again, being 2020 during the COVID pandemic – and total employment has grown to 12.9 million. (8.4% of 154 million jobs). In both length and net totals, this rebound has surpassed that of the 1990s; by length alone, as of 2019 it matched the 1960-69 period** as the longest continuous period of manufacturing job growth in BLS’ records***. Some industry samples, from 2010 through 2022: automotive industries +370,000 (though from a dire financial-crisis low), food manufacturing +265,000, fabricated-metal products +197,000, machinery +130,000, chemicals +127,000, wood products +92,000, electrical equipment +55,000, rubber +22,000, furniture +20,000. Or, alternatively by state (from 2010, rather than the single-year growth reported above): Nevada +29,000, Georgia +72,000, Pennsylvania +11.000, California +70,000, Texas +115,000, Michigan +155,000. Most states remain below their 1998 counts, but one region — the Great Plains and Rocky Mountain West — has gotten all the way back.
Here is a new topic for academia, then: What explains rebounds and resilience? Some starting points:
* Policy? Seems at first glance unlikely, as job growth has continued through the quite different approaches of the Obama, Trump, and Biden administrations, but perhaps some Obama-era innovations worked and had lasting effects?
* Some internal change and successful adaptation to competition within American industry and labor?
* A change in the external environment? Perhaps the China boom ran its natural course, or got submarined and lost competitiveness as Zhu Rongji-era liberalization lost out to Xi Jingping-period dirigisme and central planning?
* Or something else that hasn’t yet occurred to us here?
Ideas and speculation welcome.
* Or 10 of the last 12 counting December-to-December totals instead of using the BLS annual averages.
** Using BLS’ annual averages; counting December-to-December, 2016 had a very slight decline, so the uninterrupted-growth period would be six years, equaling the six-year expansion of the 1990s.
*** Consistent data on manufacturing jobs go back to 1939.
The ITC’s “Distributional Effects of Trade and Trade Policy on American Workers” report.
.., and Vice President Ed Gresser’s testimony (a bit against the grain), focusing on the U.S. tariff system, its very limited power as a job protector, and its tax-policy impact on single moms and low-income families.
Gresser and Workforce Development Policy Director Taylor Maag on replacing the Trade Adjustment Assistance program with a universal benefit for dislocated workers.
Data:
The Bureau of Labor Statistics’ databases. Try Employment, Hours, and Earnings for total employment, manufacturing, retail, transport, science, etc., going back to 1939 in major categories and to 1990 in very detailed form.
… and BLS’ most recent monthly Employment Situation report, out last Friday.
States:
Colorado’s Department of Labor and Employment, overseeing a 23% jump in manufacturing jobs since 2010.
… Nevada, up from 38,000 to 67,000, has the country’s fastest 2010-2022 growth.
… and Michigan’s 155,000 growth since 2010 is the largest in total numbers.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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