Manufacturing Jobs Aren't Coming Back - And It's not about NAFTA/WTO.

[Agschmid]

A report from the Boston Consulting Group last week suggested the U.S. had become the second-most-competitive manufacturing location among the 25 largest manufacturing exporters worldwide. While that news is welcome, most of the lost U.S. manufacturing jobs in recent decades aren’t coming back. In 1970, more than a quarter of U.S. employees worked in manufacturing. By 2010, only one in 10 did.

The growth in imports from China had a role in that decline–contributing, perhaps, to as much as one-quarter of the employment drop-off from 1991 to 2007, according to an analysis by David Autor and colleagues at the Massachusetts Institute of Technology. But the U.S. jobs slide began well before China’s rise as a manufacturing power. And manufacturing employment is falling almost everywhere, including in China. The phenomenon is driven by technology, and there’s reason to think developing countries are going to follow a different path to wealth than the U.S. did—one that involves a lot more jobs in the services sector.

Pretty much every economy around the world has a low or declining share of manufacturing jobs. According to OECD data, the U.K. and Australia have seen their share of manufacturing drop by around two-thirds since 1971. Germany’s share halved, and manufacturing’s contribution to gross domestic product there fell from 30 percent in 1980 to 22 percent today. In South Korea, a late industrializer and exemplar of miracle growth, the manufacturing share of employment rose from 13 percent in 1970 to 28 percent in 1991; it’s fallen to 17 percent today.

The decline in manufacturing jobs isn’t confined to the (now) rich world. According to the Groningen Growth and Development Center, manufacturing jobs in Brazil climbed as a proportion of total employment from 12 percent in 1950 to 16 percent in 1986. Since then it’s slid to around 13 percent. In India, manufacturing accounted for 10 percent of employment in 1960, rising to 13 percent in 2002 before the level began to fall. China’s manufacturing employment share peaked at around 15 percent in the mid-1990s and has generally remained below that level since, estimates Harvard economist Dani Rodrik. As a proportion of output, manufacturing accounted for 40 percent of Chinese GDP in 1980 compared with 32 percent now.

http://www.bloomberg.com/news/articles/2014-04-28/why-factory-jobs-are-shrinking-everywhere

Older article, but really worth the read. The decline of manufacturing isn't so much about NAFTA (sure it's a part) but more about the changing world market and technology. This isn't being addressed at all in the debates between our candidates.

[elleng]

1. Thanks. Good discussion.

X-Post in Economy, please.

[Agschmid]

2. Will do tonight.

It's interesting to see that almost all countries are experiencing the same decline, manufacturing jobs are gone. And for the most part they aren't coming back.

[Fumesucker]

4. We are awash in products to buy that are more and more produced by machines

And as someone who builds and uses robots to make things including other robots I can tell you it's going to get more so far more quickly than most realize.

When every Rajneesh, Gustav and Li Sung can design, prototype and produce a new product in their bedroom things are bound to change. Just like DU does for politics plenty of boards are out there on any technical subject you might care to learn about, from there it becomes a matter of figuring out who knows what they are talking about and who doesn't.

[Uncle Joe]

3. Bernie's economic plans are much greater than just bringing back manufacturing,

a redistribution to an increased, functional balance of wealth via more just and logical taxation policies, an increase to $15 an hour minimum wage, 1 Trillion dollar investment in our nation's crumbling infrastructure, better efficiency in our nation's health care expenditures by instituting health care for all, auditing the Military Industrial Complex along with not waging wars on a whim, major improvements in U.S. competitiveness by making public universities tuition free and aggressively turning the U.S. away from outdated, destructive, costly fossil fuels to sustainable energy sources will all contribute to improving our economy in the short, mid and long term.

All of the above will contribute to making our nation much more competitive in a rapidly changing world, not to mention increase our peoples' overall happiness while reducing stress; and the many negative social consequences that spring from this malady.

Thanks for the thread, Agschmid.

[elleng]

5. Looks like 'wealth,' or at least compensation/income will have to be rethought.

Maybe something like Canada's new approach? Ontario, Canada announced a plan to test Universal Basic Income for all citizens.

http://qz.com/633974/ontario-canada-announced-a-plan-to-test-universal-basic-income-for-all-citizens/

[doc03]

6. I worked in the steel industry for 40 years. I started in 1970

and even at that time we had lost jobs for better than 10 years. We continued losing jobs during the 70s and 80s
that was before NAFTA or the WTO ever existed. When I started working in the mill our company had about 17000
employees and when we shut down in early 2009 we had around 2500 but we produced as much tonnage as we did
with 17000 in or last full year 2008.