Over the past 40 years, America’s manufacturing industry has been disappearing. Midwestern states have seen massive job losses. Detroit, the automobile capital of the United States, has seen drastic job losses. The job losses have been especially drastic since 2000. Political Candidates have been campaigning on this issue. Due to the political benefits of winning the Midwestern states, many presidential candidates have put forth plans to fix the issue. Never has this been so prevalent that the 2016 presidential campaign, when the manufacturing job loss was blamed on poor trade deals. Repeatedly, promises were made to “bring back our jobs.”
This begs the question, “Where did the jobs go?”
Answering this question is more difficult than one might think. Problems aren’t as simple as they are described on social media. It is easy to look at the proceeding graph and think that there are real problems. Simply looking at the data from 2000 until now shows that America has lost 5 million jobs in manufacturing. There are a few reasons that this might have happened.
Technology has been making the jobs obsolete. It’s no secret that, over the past 40 years, technology has been becoming more prevalent in our everyday lives. Since 1987, productivity per employee has increased 155%. Since 1972, total production from the manufacturing sector increased 180%.
While manufacturing jobs have declined, total manufacturing production has increased more than enough to compensate for the job loss. This increase in production is attributable to increases in technology. In other words, total manufacturing employees have been decreasing, while manufacturing production has been steadily increasing.
The question must then be asked, where did those replaced employees go? A simple trend analysis can answer this question. Over the past 15 years, the population increased by 0.99% per year. Over the same period, education and health services increased an average of 1.84% per year. In addition, professional and business services increased an average of 1.44% per year. It is possible that these two industries have employed many ex-manufacturing workers.
So where did the manufacturing jobs go? To put it simply, they disappeared. Over the past 40 years, there has been a decreasing demand for manufacturing jobs. As technology improves, each worker can produce much more than he could 40 years ago. Thus, the manufacturing sector has never been stronger. Production has been rising consistently, aside from a short decline during the great recession.
The United States economy is evolving. We do not need to worry when technology is helping to make workers more productive. Our focus should be on equipping workers to adapt to changing workforces. However, our economy should serve as a warning to other countries that rely on manufacturing jobs. As technology increases, countries will see less demand for those jobs, and they should be ready to adapt.