Between 2000 and 2010, almost 6 million factory workers lost their jobs nationwide. Across the country, the manufacturing industry shed jobs due to outsourcing work due to lower wages found abroad and new machines that outpaced workers. In this time period, the country lost 5.7 million jobs, more than a third of the manufacturing workforce.
However, recently, manufacturing employment is starting to increase again, and in some parts of the country, foreign manufacturers are establishing factories and establishments. While it appears that traditional manual jobs are unlikely to return, there has been a shift of advanced manufacturing back to the U.S. amidst facts including a desire to enter the American market directly, the inconvenience of shipping across the world, and the rising wages in China. Throughout the south-east, local government and business groups are hoping that the presence of foreign manufacturers along with jobs “reshored” to the U.S. by American companies will help create stability in the industry. In particular, North Carolina and South Carolina are among the top three states for manufacturing jobs returning or created from overseas in 2015, according to the Reshoring Initiative.
Manufacturing Employment Index
According to the latest jobs report by the Bureau of Labor Statistics (BLS), the manufacturing sector lost 10,000 jobs in May 2016. Today, approximately 19.6 million Americans have jobs in the manufacturing sector, significantly lower than in 2009, when manufacturing jobs were the biggest component of the private sector job market and 20 million Americans worked in jobs in the sector. Higher-paying manufacturing jobs are shrinking relative to the economy, while jobs in health care, retail trade, and hospitality are growing quickly.
In 2009, the top three sectors for jobs were manufacturing, healthcare, and business services. Today, it’s healthcare, business services, and manufacturing. However, average pay in the manufacturing sector is higher than the national average and much higher than the healthcare sector. The average weekly pay of a manufacturing worker is almost 30 percent higher than that of a worker in healthcare.
Manufacturing Wage Index
Researchers, politicians, and business leaders are recently coming forward with strategies to accelerate job gains and investment in the manufacturing industry. These ideas range from trimming regulations that raise the cost and effort of running a manufacturing operation to imposing a value-added tax on imports to ramping up training programs so companies are easier able to find skilled workers. The upcoming U.S. election has renewed focus on the number of American manufacturing jobs abroad. Hillary Clinton has proposed penalizing companies taking jobs overseas, while Donald Trump has mentioned strong-arming manufacturers into returning to the U.S.
While revitalizing the manufacturing sector is not an easy task, it is an important one. Manufacturing business has historically been one of the best generators of wealth for an economy, requiring processes, materials, and skills that create employment and profit at each step.
Here’s a look at some of the strategies proposed to revive the manufacturing sector:
Create career factories: One of the biggest issues in manufacturing, despite recent low payrolls, is that companies have difficulty finding skilled craft workers to replace retiring employees. Community colleges offer programs for skilled trades, but companies argue that the course work is often too generalized to meet job requirements, which means firms have to invest in on-the-job-training for new hires and are unable to quickly increase productivity through additional hiring. Some manufacturing companies are starting to collaborate with community colleges to design job-training programs specifically for their needs.