The Impossibility of Reviving American Manufacturing
It’s easy for candidates to talk about bringing jobs back from China, but making factories the centerpiece of the U.S. economy is another matter.
Every election has its signature issues, which candidates ignore at their peril. This year, the Republicans have the border; the Democrats are making do with Wall Street.
But at least one political subject inevitably demands attention from both sides—and in 2016, that’s American manufacturing. Democrats and Republicans seem to share the belief that America was better off when its citizens could count on a factory job as a reliable escalator into the middle class. Every candidate has a plan to revitalize U.S. industry; Trump alone promised to bring steel back to Pittsburgh and Carrier back to Indiana.
Given that the image of the factory worker is so closely linked to America’s 20th-century rise, one can understand this desire to turn back the clock. But would such a restoration be viable?
Manufacturing accounts for around 12 million U.S. jobs today, down from a peak of 19 million in 1979. For much of the 1980s and 1990s, the sector puttered along, hovering around 17 million jobs. But something snapped during the 2001 dot-com bust: The industry lost 3 million jobs in three years, and it didn’t rebound. Another 2 million jobs went down the drain during the Great Recession. The sector has shown only tepid growth since.
The truth is, even if China blinked out of existence tomorrow, there just wouldn’t be a need for much of the work America lost. While low-skilled labor dominated manufacturing in decades past, automation and computers have made factory floors both tremendously productive and relatively human-free. A revitalized American manufacturing sector would raise employment, but not to the levels seen in 1979—a heyday that economists say is unlikely to be repeated.
“We couldn’t afford to do that anymore,” said Hal Sirkin, a senior partner at the Boston Consulting Group who studies manufacturing. “People think about manufacturing as back-breaking work, but it’s not that anymore. It has radically changed from a demographic perspective.”
Since candidates’ views on manufacturing seem to be stuck in the 1980s, I looked into how the status of the average factory worker has changed over the past 30 years. To do that, I used a tool developed by the University of Minnesota to analyze data from the Current Population Survey, which polls a cross-section of Americans every month about their employment.
I found three things. First, it’s much harder to get by with only a high-school degree than it used to be. In 1979, nearly three-quarters of manufacturing workers didn’t have any schooling past 12th grade. Almost a third hadn’t graduated from high school. That wouldn’t fly today. By 2014, more than half the employees in factory jobs had some amount of post-secondary schooling.
That’s good for productivity. A well-educated workforce can handle the technological demands of a modern production line and support the innovations that have effectively uncoupled industrial output from staffing levels, But it means manufacturing can no longer be a bountiful provider of entry-level jobs. Previous generations traded physical exhaustion and, occasionally, a considerable risk of injury, for a wage much higher than their education would otherwise permit; the unskilled workers of today are much more likely to go into the service sector, which pays less.
Second, Millennials are much less likely to go into manufacturing than previous generations. For years, the ages of people working in the sector largely matched those of the workforce at large: In the early 1980s, a little under half of manufacturing workers were Baby Boomers, which is about the same percentage that generation represented in the overall labor force.
But while Millennials—defined here as workers born between 1982 and 2004—made up 29 percent of the American workforce in 2014, they accounted for just 22 percent of the manufacturing sector. Those 7 percentage points might not seem like much, but look at it this way: A quarter of the young workers one would expect to see on a factory floor simply aren’t there.
The reasons for this are complicated. To be sure, a major factor is that there simply are fewer manufacturing jobs for young workers to take. And while Millennial workers typically have greater access to education—which would seem to make them more qualified for high-tech manufacturing jobs—Sirkin suspects many younger workers harbor out-of-date prejudices about factory work being all about brawn. “A lot of people are saying they don’t really want to be in manufacturing, without understanding what it is like now,” he said. “It is fundamentally people working with their brains.”
Third, in addition to a smaller manufacturing workforce overall, the average factory employs far fewer people. In 1980, according the Bureau of Labor Statistics, the average manufacturing factory had 61 employees. By 2014, the average had dropped to 36. While there are still many massive factories employing hundreds of people, the numbers suggest that the typical shop is considerably smaller than it was three decades ago.
That could have an adverse effect on unionization. It’s much easier to organize a single large plant of autoworkers than it is to do the same for a disparate collection of 3D-printer technicians spread throughout the country. While much has been made of efforts to defang unions, the slimming of the modern factory may have taken even more out of labor’s bite. And that would lead to lower wages.
The candidates, particularly Trump and Cruz, have built entire stump speeches around bringing back high-paying jobs that have been lost to Mexico and China. They’re presuming two things: that these jobs would indeed be high-paying and that the American economy could even reabsorb them in the first place. But by and large, the manufacturing sector has only grown more skilled through the cutbacks of the last decade; the positions America has lost were positions it outgrew. A presidential candidate who promises to claw back the careers of 1979 is probably making a promise they can’t keep. They would do better to find jobs that fit this decade’s economy instead.