Thursday, August 20, 2009

Manufacturing Jobs Drop To Lowest Level Since 1941, Below 9% of Workforce for the First Time

Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs (data here), and by July of this year manufacturing employment had fallen to 11,817,000, the lowest level of manufacturing jobs since April 1941 (see chart above).

As a percent of the total labor force, manufacturing employment fell below 9% in July (see chart below), the lowest level in BLS history (back to 1939).

Originally posted at Carpe Diem.

50 Comments:

At 8/20/2009 5:46 PM, Anonymous Anonymous said...

I always wanted to grow up to be a garment worker. Most people just can't understand the pride of seeing people wearing shirts you helped assemble. Eight hours a day in front of a sewing machine builds character and supports our economy.

My only regret is that there aren't any $50,000 jobs loading neck labels for beer bottles into machines anymore.

 
At 8/20/2009 6:11 PM, Blogger Jack Miller said...

What a blessing? Only 2 or 3% of our population is needed to grow all the food we need and only 9% to make the goods we need. We can afford Econ. Professors, stock brokers and all sorts of other nefarious creatures :-)

 
At 8/20/2009 6:16 PM, Anonymous gettingrational said...

With advances in technology you would not expect employment to grow very much in manufacturing. The problenm is that manufacturing's share of GDP has fallen steadily. Manufacturing has not grown with the economy but has replaced with consumption. Manufacturing brings many production inputs that have been lost. Mfg has gone from about a quarter of GDP to about 10% which is scary because consumption will not bring us back to prosperity very quickly.

 
At 8/20/2009 6:57 PM, Blogger Michael said...

Many areas of manufacturing have been baned or been regulated out of the US. Want wood, call Canada. Want steel, call China. More and more computer coding is moving off shore. And companies like IBM, Intel and HP have indicated that silicon valley could very well be the next Detroit. America may regret that we decided to let others make most things for us.

 
At 8/20/2009 7:36 PM, Anonymous Anonymous said...

Oh, yeah, we "let" others make things for us.

Their desire to make things, their hard work, and their ingenuity have absolutely nothing to do with them actually making things for us.

We "make things" too. They are called "services". We're really good at it and people around the world want them.

Production isn't America's problem any more than selling cars was GM's problem. Our incentives are misaligned by - you guessed it - government.

 
At 8/20/2009 7:38 PM, Anonymous Anonymous said...

I'm confused. Is there a green shoot in here? There has to be.

 
At 8/20/2009 8:15 PM, Blogger OBloodyHell said...

DOOM!!

DEATH!!!

DESTRUCTION!!!!

Woe is unto America, we are now a third rate power!!!

.
.
.

Eh? We're not?

I guess all that manufacturing shit isn't what it used to be, huh...?

 
At 8/20/2009 8:16 PM, Blogger OBloodyHell said...

> My only regret is that there aren't any $50,000 jobs loading neck labels for beer bottles into machines anymore.

Give Obama and cronies time.

They won't be available for mere plebes like YOU, but that's beside the point.

 
At 8/20/2009 8:19 PM, Blogger OBloodyHell said...

> Manufacturing has not grown with the economy but has replaced with consumption.

No it hasn't, at least, not in the sense you mean.

The USA is at the forefront of IP & Services. And it is that arena from which all new jobs, all new income, and all substantial wealth will derive.

Making IP -- and Providing expert services -- is where the $$$ are.

Manufacturing is too cutthroat (much like agriculture) and margins are too thin for any of it to matter that much.

Leave all that for the other nations which can't begin to match us at IP & Services.

 
At 8/20/2009 8:21 PM, Blogger OBloodyHell said...

> More and more computer coding is moving off shore.

BS. That's a myth. They tried it, and it didn't work -- most of the coding jobs that left from 1995-2005 came back 3-4 years later.

The only things done outside of the country are hackwork jobs that don't require human brainpower but patience and a willingness to deal with tedium in the pursuit of small meticulous detail work.

Think animation cels.

 
At 8/20/2009 9:47 PM, Blogger Bruce Hall said...

This comment has been removed by the author.

 
At 8/20/2009 9:48 PM, Blogger Bruce Hall said...

The post-manufacturing economy relies on people with 1) intelligence, 2) skills, 3) education, 4) ingenuity, 5) ambition.

Now look at the school dropout rate.

Now listen to our president promoting one dependency program after another.

Conclusion: there are not enough people as described in sentence 1 to support those in sentence 2. Consequently, the proposals in sentence 3 will not work... and our economy is likely to stagnate.

If you base your economy on qualifications of the population beyond +1σ you have a significant economic conundrum. You end up with a much larger underclass, a dispirited middle class, and elitists making millions from their government connections.

 
At 8/20/2009 10:58 PM, Blogger angelaify said...

It's pretty egotistical to believe that the jobs like coding and engineering won't follow manufacturing. That's how they got here.

 
At 8/21/2009 12:50 AM, Anonymous Anonymous said...

Actually much of this employment reduction is due to automation. Much of manufacturing is capable of being automated, compare plants of today with those of 40 years ago. So as pointed out we keep upskilling the economy without upskilling the workforce. As an example here its much more knowledge intensive to be a auto mechanic today than in the 1950's when cars were simple enough that anyone could understand them.

 
At 8/21/2009 1:38 AM, Blogger sethstorm said...


Many areas of manufacturing have been banned or been regulated out of the US

Regulatory evasion.

Close the loopholes and otherwise remove their ability to evade them.


BS. That's a myth. They tried it, and it didn't work -- most of the coding jobs that left from 1995-2005 came back 3-4 years later.

Somehow I don't believe that with the artificial shortages that are promoted as a result of the industries that all benefit from any reduced amount of that type of work in the US.

That is, at all skill levels, even the least marginalized.


America may regret that we decided to let others make most things for us.

We already are regretting it for the nations that are used for regulatory evasion; foreign interests already have too much influence.


The USA is at the forefront of IP & Services

In other words, industries good at employing lawyers.


The post-manufacturing economy relies on people with 1) intelligence, 2) skills, 3) education, 4) ingenuity, 5) ambition.

You forgot 5) the willingness to gamble on when their industry gets click-and-shipped due to a lack of robust regulation. This leads to...


Conclusion: there are not enough people as described in sentence 1 to support those in sentence 2. Consequently, the proposals in sentence 3 will not work... and our economy is likely to stagnate.

Fix that with the talent we have.



If you base your economy on qualifications of the population beyond +1σ you have a significant economic conundrum. You end up with a much larger underclass, a dispirited middle class, and elitists making millions from their government connections.



No doubt being paid by offshoring lobbies, and other countries to offshore work.



It's pretty egotistical to believe that the jobs like coding and engineering won't follow manufacturing. That's how they got here.

Not if they can't leave.

 
At 8/21/2009 3:56 AM, Anonymous Anonymous said...

Please build onto this article. I felt like I was getting the forecast.

"With this increase into becoming capital intensive parts of the Indo islands will be feeling the grunt of the strom with a mainstream of labor sweeping through sometime by the midweek."

Just a thought.

 
At 8/21/2009 4:16 AM, Blogger bob wright said...

OMG!

Does this data imply that it wasn't the evil Republicans that caused the percentage of manufacturing jobs to decrease?

Do you mean the data shows that manufacturing jobs have been in decline for 60 straight years? Through republican and democratic presidencies? During the 40 years that democrats controlled the U.S. Congress?

Heavens-to-Betsy.

Who will I blame now?

 
At 8/21/2009 5:38 AM, Anonymous Anonymous said...

Less developed countries compete with our ability to automate...and regarding our ability to automate...there's a lot more where that came from. Study a few yrs ago that showed we have a "backlog" of innovation that has yet to be implemented. I'll see if I cannot find a link.

Think about this intuitively...it's good news not bad news. In my job, which involves sitting in front of a computer most of my day, I have tried to learn technical skills that try to help me automate as many of my repetitive tasks that I can. Why? So I can work on things that are potentially more profitable and/or useful for my firm.

The more that I can delegate to a machine...the more time that I have to spend thinking critically and strategically on bigger, better things.

 
At 8/21/2009 6:10 AM, Anonymous Anonymous said...

Perhaps it's time people began to realise that, as a society, we don't NEED to spend our ENTIRE lives working!

There isn't enough work to go around.

Unless of course we destroy things just so we can make replace them. Or dig holes so we can fill them up again.

Why don't we all spend a bit more time enjoying life? Work sucks.

 
At 8/21/2009 6:19 AM, Blogger juju said...

Anonymous, above is correct.
We manufacture 22% of the worlds goods. We are producing more goods than ever before.
HOWEVER, we are producing more eficiently (productivity), thereby needing less workers to accomplish the sames tasks.
The same applies for agriculture.
Less farmers to produce more food.

 
At 8/21/2009 8:07 AM, Anonymous Anonymous said...

Manufacturing jobs are disappearing because America can not compete on price with foreign countries. The minimum hourly wage in the USA is equal to the daily or even weekly rate for unskilled labor somewhere else.

The real lesson to take away from this is that we need to drastically improve the quality of our kids' education. If we don't the manufacturing jobs might come back. That would be a real nightmare.

 
At 8/21/2009 10:31 AM, Blogger sethstorm said...


Anonymous 8:07 said...

Fix it so that regulatory evasion can't happen in terms of job theft by other countries.


Regulatory evasion is not a form of progress.




Bob Wright said...

No, as they got us in this mess by selling to every country before thinking of our own people as a non-burden. Then they made the 11th Commandment: Thou shalt not object to business for it is above questioning.

The Clintons and their acolytes only amplified the damage. They're equally as guilty.

 
At 8/21/2009 1:01 PM, Anonymous Anonymous said...

...and guess what happened in 1941? Pearl Harbour.

 
At 8/21/2009 1:07 PM, Anonymous Anonymous said...

What Daah!-"We manufacture 22% of the worlds goods".
Are referring to bombs and other similiar goods to kill folks?
Here is a tip to servive the coming bad times--invest now in sewing machines and shoe repair business.
By the way,prior to the 70's,one wage earner could support a family of four, 2 weeks at the cottage, a boat, a new car at $1900 and wife stayed home.What do we have now--Dog and cat have to fend for themselves :^/

 
At 8/21/2009 3:32 PM, Blogger Jacinto said...

With a several trillion dollar debt, roughly a net worth of one year gnp who needs workers and factories?

George Orwell will say DEBT is WEALTH!

 
At 8/21/2009 3:43 PM, Anonymous Anonymous said...

We manufacture 22% of the worlds goods. We are producing more goods than ever before

no, we dont.

the biggest job creation over the last 10 years was in finance, pushing borrowed chinese money around. those jobs are all but gone.

 
At 8/21/2009 5:35 PM, Blogger juju said...

You cannot be serious.
The following is public information.
22% of all of the goods produced in the world, come from America. This is public information.
You can CHOOSE to ignore the truth, however the truth remains.
Just look at all of the GDP reports posted every quarter for the last 40 years. Quit believing every you read.
I am a CEO of a manufacturing company.
We just completed a project of installing robotics. More product produced with less people = higher productivity.
Who owns most of the Chinese companies that you might be concerned with? A lot of Americans!

 
At 8/21/2009 5:54 PM, Blogger 1 said...

sethstorm talking but is he covering the costs of those inane and expensive regulations?

Bloomberg's Kevin Hassett: Tax Burden

U.S. firms have nonetheless prospered because our tax code allows a business to set up a subsidiary in a low-tax country. When that subsidiary earns profits, they are taxed at the rate of that country, and don’t face U.S. tax until the money is mailed home.

The economically illiterate partisan Democratic view is that this practice is unpatriotic and bleeds jobs from the U.S. The economic reality is that American companies use this approach to acquire market share overseas. The alternative is losing the business to foreign competitors.

 
At 8/21/2009 6:22 PM, Blogger juju said...

Exactly correct Sethstorm.
Thank you for providing a bit of the larger picture.

 
At 8/21/2009 8:45 PM, Anonymous Anonymous said...

juju - GDP does not equal manufacturing.

dumbass

 
At 8/21/2009 8:55 PM, Anonymous Anonymous said...

Abort the Constitution, abort a Chinese baby for a Wal Mart GI Joe. Skid across the Tienanmen Tank Man with a CISCO Systems Yahoo and keep Wango Tango at Mao's prison house. Spank the bottom-line... Sheeeit! God'll getcha fer this one, no doubt! Storms ah rumblin and thar's a blood red moon or three ...on the rise.
Stand fast and do no harm, there ain't no Cause for this New World Order bullshit but, fer the devil offerin the false claim ...and that time is done fer about now.

 
At 8/21/2009 9:13 PM, Blogger juju said...

GDP contains the portion of the economy derived from manufacturing.
Calling names under the anonymity of a board shows the thought process of a ..............

 
At 8/22/2009 3:56 AM, Blogger 1 said...

"22% of all of the goods produced in the world, come from America"...

And your credible source for this supposed factoid is what please?

It sounds about right but I can't remember where I had seen something similer before...

Thanks for the chuckle sethstorm: "No, as they got us in this mess by selling to every country before thinking of our own people as a non-burden. Then they made the 11th Commandment: Thou shalt not object to business for it is above questioning"...

LMAO!

 
At 8/22/2009 4:09 AM, Blogger 1 said...

INANE REGULATIONS

From the Heritage Foundation: CO2-Emission Cuts: The Economic Costs of the EPA's ANPR Regulations

* Cumulative gross domestic product (GDP) losses are nearly $7 trillion by 2029 (in infla­tion-adjusted 2008 dollars), according to The Heritage Foundation/Global Insight model (described in Appendix A).

* Single-year GDP losses exceed $600 billion (in inflation-adjusted 2008 dollars).

* Annual job losses exceed 800,000 for several years.

* Some industries will see job losses that exceed 50 percent.

 
At 8/22/2009 6:53 AM, Blogger sethstorm said...


1 said...

Funny, but true.

They made the mistake of going for the white-collar in 2003. That revealed them as individuals whom were willing to sell our nation to foreign interests far removed from our own.

The problem is that they aimed at a people who couldn't be called "overpaid union workers". They even attacked Americans whom were anti-union as could possibly be. They didn't even try pushing for enough tax cuts and relaxing of environmental regulations that would remove the threat.

What's funny is that they aimed at people who cheered them on in the 1980's with manufacturing.

 
At 8/22/2009 9:41 AM, Blogger juju said...

Thanks Guys, Too early in the morning to be looking all of this stuff up. However to start, here is an exerpt and a link. Will continue to post better links as I find them.
1. One fifth of all goods in the world were made in the US in 2007, compared with 12 per cent in China, but the gap is closing fast. Years of focusing on the services sector, along with the global downturn, mean US manufacturing is shrinking while China’s factories keep growing, or at least until hit by the downturn.
2.www.nam.org/~/media/Files/s_nam/docs/.../239626.ppt.ashx

 
At 8/22/2009 9:53 AM, Blogger juju said...

There is far too many links to look through. Here is another exerpt and link form FASNUC robots.
Just purchased 6 new robotics.

1.Let’s look at some interesting statistics. We have so often heard that off-shore competitors such as China are “stealing” jobs from the U.S., but the statistics tell a different story. China actually lost 15 million manufacturing jobs between 1995 and 2002, whereas the U.S. lost two million jobs for the same period. In fact, the
world lost 22 million manufacturing jobs from 1995 to 2002. Where did all of these jobs go? To automation, and other types of productivity-enhancing technologies, and initiatives such as lean manufacturing.
2. Sorry. Link is bad. Copy/paste on google.
A Message To North American Manufacturers: Save Your Factory

 
At 8/22/2009 9:59 AM, Blogger juju said...

Last one for now.
People inpower, love to spin the information to suit there objectives. However, as a manufacturer who exports 12% of everything we make, the truth is:

1.“The United States remains by far the world’s leading manufacturer by value of goods produced. It hit a record $1.6 trillion in 2007 - nearly double the $811 billion of 1987. For every $1 of value produced in China factories, the United States generates $2.50.”

2.www.ritholtz.com/.../us-remains-worlds-leading-manufacturer

 
At 8/22/2009 10:04 AM, Blogger juju said...

Last one I promise. : )
Will go through the GDP reports later.

http://www.msnbc.msn.com/id/30229507/from/ET

 
At 8/22/2009 3:35 PM, Blogger 1 said...

Hey juju, I'm assuming you meant this link right? The url wasn't all there (something the way blogger handles all the alphnumerics): US Remains World’s Leading Manufacturer

I noted this familiar face and the posting title: Made in USA Is Alive and Well over at Seeking Alpha...:-)

 
At 8/22/2009 5:08 PM, Blogger juju said...

Yes, thanks 1,
Mark must have saw our discussion and has actually given, a more complete context, of the state of manufacturing.
Check it out. thanks for the help. : )

 
At 8/23/2009 8:54 AM, Anonymous Anonymous said...

Soon, the U.S. (and a lot of you clowns) will need to think in terms of EMPLOYMENT of U.S. citizens rather than comparatively irrelevant terms such as GDP growth, profit growth, etc.

Corporate profits, GDP growth, etc., are nice, but without EMPLOYMENT (with decent wages), you will see major social upheaval developing in the U.S.

Btw: Another hint for some of you geniuses: Most unemployed U.S. factory workers probably cannot be easily retrained (if at all) to become experts in automation, robotics, IP, or services. So, I hope you have some kind of backup plan in mind to employ all of those millions of workers? If not, again, you will begin to see major social upheaval in the U.S.

P.S. Who really cares how well U.S. corporations are faring, if they scarcely employ Americans? I strongly predict that in the future, we will view the placement of U.S. corporate interests ahead of U.S. employment as being akin to "putting the cart before the horse."

 
At 8/23/2009 9:22 AM, Blogger juju said...

No need to be insulting.
I removed permanently 13 jobs, and good riddance.
I CREATED an additional 23 higher paying jobs that require more skill. Also, forced the re-trainng of 5 people to learn the robots, which will require us to pay them more for their knowledge!
Your obvious lack of experience in the real world of business is VERY apparent.
May I suggest you speak of what you know, rather than what you think.

 
At 8/23/2009 9:55 AM, Blogger juju said...

This is to (and a lot of you clowns),
As a second thought, I am adding 7 support jobs as well. Customer service, sales, maintanence, etc....
Who is the clown? H
How much are you contributing?
How are you helping anything?

 
At 8/23/2009 10:29 AM, Blogger juju said...

CIA factbook: Exports
1 European Union $ 1,952,000,000,000 2007

2 Germany $ 1,530,000,000,000 2008 est.

3 China $ 1,465,000,000,000 2008 est.

4 United States $ 1,377,000,000,000 2008 est.

5 Japan $ 776,800,000,000 2008 est.

6 France $ 761,000,000,000 2008 est.

7 Italy $ 566,100,000,000 2008 est.

8 Netherlands $ 537,500,000,000 2008 est.

9 Russia $ 476,000,000,000 2008 est.

10 United Kingdom $ 468,700,000,000 2008 est.

 
At 8/24/2009 10:28 AM, Anonymous Anonymous said...

We destroyed our tariffs:

U.S. TARIFF HISTORY 1821-2000

YEARS……………..AVERAGE EFFECTIVE TARIFF (% tax on all imports)
1821-1830………….46.6%
1831-1840………….24.9%
1841-1850………….24.0%
1851-186……………20.8%
1861-1870………….36.2%
1871-1880………….31.3%
1881-1890………….30.1%
1891-1900………….23.7%

1821-1900………….29.7%

1901-1910………….25.0%
1911-1920………….11.8%
1921-1930………….13.8%
1931-1940………….16.8%
1941-1950………….9.0%

1901-1950………….15.3%

1951-1960………….5.9%
1961-1970………….7.3%
1971-1980………….4.0%
1981-1990………….3.5%
1991-2000………….2.5%

The income tax was created in 1913, just in time to be around to fund WW I :

YEAR.....INOME TAX REVENUE.....TARIFF REVENUE
1916............$173,387,000.........$213,185,000
1917............$675,250,000.........$225,962,000


Up until 1916, the tariff was the largest single Federal revenue source.

1917 was the first time in U.S. history that the income tax surpassed the tariff and we've never looked back since then.

 
At 8/24/2009 6:28 PM, Anonymous Anonymous said...

To juju:

If low-skill manufacturing jobs are being replaced with high-skill jobs (now performed by the previous low-skill workers), then why in the world does Detroit have a 15% unemployment rate, desolate neighborhoods that are mostly crack houses with packs of feral dogs roaming the streets?

On a more general note: Why is the U.S. unemployment rate nearly 10% with no end in sight?

And why have real wages been FALLING, rather than RISING, since the 1970s?

All of your talk of low-skill jobs being replaced with high-skill jobs is simply nonsense.

 
At 8/24/2009 6:59 PM, Blogger juju said...

Hello Anano,
I simply reflected on what is real, and has already happened.
It is your choice to beleive or not.

 
At 8/25/2009 2:51 AM, Blogger Wallis said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Margaret

http://grantfoundation.net

 
At 9/06/2009 5:34 AM, Anonymous Read gear said...

How about in other countries?

 

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