The Reason 600,000 U.S. Manufacturing Jobs Vanished
This isn’t your father’s America.
Gone are the days you could graduate high school, get a job at a local factory, and have a job for life. The data suggests manufacturing jobs are in a permanent decline.
Even so, we’re now manufacturing more and more stuff in the United States. It’s not that manufacturing left the U.S. Instead, the manufacturing jobs did.
How 600,000 jobs vanished
It may be a tough environment for those seeking work in the manufacturing industry. But those who already have a manufacturing job have it better than ever. In fact, the average manufacturing worker is working more hours per week than at any time since World War II:
It’s hard to see it in the chart — the current manufacturing employee works 42.1 hours per week. That’s higher than the “Made in the USA” heyday of the 1950s and 1960s.
Factories fear adding new workers
It’s curious that at a time manufacturing workers are working more, fewer factories are hiring. Since the bottom in manufacturing employment in 2010, factories have only added 500,000 workers — too few to keep work weeks at 40 hours.
There’s an important takeaway from these two charts. First, factories are reluctant to hire new workers, choosing to pay their existing workers an average of 2.1 hours of overtime. Secondly, if the manufacturing industry hired enough workers to push down the average factory week to a normal level of 40 hours, the industry would create some 600,000 new American jobs.
There are plenty of reasons factories aren’t hiring. For one, manufacturers recognize the cyclicality of the industry — perhaps they’re not ready to hire if another recession may be around the corner. Secondly, manufacturing workers bring big fixed costs like pensions and medical benefits. To put it simply, paying overtime wages is less costly than adding new workers.
So, while we’re making more products in the United States, there’s something we’re not making: new manufacturing jobs. That trend is, unfortunately, probably here to stay.
So in other words, gov’t regulations and gov’t programs like SS and medicare, workers comp, etc. cost so much money that plants would rather pay overtime then hire more people. When are people going to realize we are literally killing ourselves in this country??
Doesn’t say anything about government regs causing this. Maybe it is just that existing employees are less expensive than new ones. Maybe it is because the businesses can’t hire anyone else qualified in their locale. Maybe they can’t even entice people to move there because there isn’t enough quality affordable housing available. I know that those are reasons why companies in my community pay overtime instead of increasing their work force. The reason given about about not wanting to experience a slow down and let people go also plays a part in our area especially with locally owned manufacturing companies.
Where does it say it’s about government programs?
It is all about government regs. Employers have to match many of the taxes taken out of a paycheck, then unemployment taxes in lay off cases, it is cheaper to pay overtime then foot the tax liability of a new hire.
not to mention what OHSA has done! I am a tool & Die Maker who has watched good paying jobs go overseas due to government regulations and a educational system that has dismantled our vocational education programs.
I was surprised they did not mention automation. Machines can replace a large percent of workers needed to run a single production line leaving just a few skilled machine operators.
In automation you pay a one time expense for it, and it can run 24/7 with no more expense, actually the expense becomes less every day it runs.
If it does break down it can be up and running again in a few hours.
Automation has become such an integral part of the manufacturing landscape, that lights out operations are becoming more common.
Having had conversation with a number of operators of manufacturing plants in New England, one thing was in common with all of them. Despite excellent pay and benefits, they could not get the people to do the work. Mind you – it was easy assembly work.
It became fairly clear that Americans felt that type of work was below them.
The likelihood of getting those jobs now, if the people would now do the work, are gone. The jobs are enjoyed by hard working families who are glad to have the pay and benefits, in foreign countries.
THE ONLY REASON THERE ARE FEW AMERICAN JOBS IS THAT THE AMERICAN CONSUMER CONTINUES TO BUY POORLY MADE FOREIGN GOODS AT THE SAME PRICE!!!
A COMPANY WOULD BE STUPID T MAKE IT HERE WHEN THEY CAN SELL GARBAGE AT A 900% MARK UP!!!
AS LONG AS YOU CAN FIND DUMMIES WILLING TO PAY $300 DOLLARS FOR A $10 DOLLAR SET OF MADE IN CHINA HEADPHONES OR $100 DOLLARS FOR SLAVE MADE NIKE SHOES AND COMMUNIST MAD UNDER ARMOR, MANUFACTURING WILL NEVER COME BACK!!
LOOK HOW MANY IDIOTS LINED UP AND WAITED IN LINE TO BUY THE LATEST COMMUNIST CHINA MADE I-PHONE!!!
AND EVERY DOLLAR YOU SPEND ON CHINESE GARBAGE PUTS US THAT MUCH CLOSER TO WORLD WAR THREE!!
THANKS TO THE STUPIDITY OF US CONSUMERS, CHINA NOW HAS THE WEALTH, MANUFACTURING, AND POWER THAT USED TO BE HERE!!
THE LARGEST BUYER OF ROLLS ROYCE IS NOW CHINA!!
CHINA IS NOW THE WORLDS LARGEST STEEL PRODUCER!!
EVEN SEARS CRAFTSMAN TOOLS ARE NO LONGER MADE HERE!!!
GULLIBLE AMERICAN CONSUMERS ARE NOW BUYING POORLY MADE CHINESE JUNK TOOLS AT THE SAME PRICE THEY WERE GETTING MADE IN THE USA!!!
SAVE AMERICA!!!
BUY AMERICAN MADE!!!
You are absolutely 100% correct… just had this conversation with relatives… I can’t understand it. I was telling my nephew. He spends $180 on chinese sneakers? But then people complain USA made is too much money? C’mon!. I also noticed there is no loyalty in these unions. Why hasn’t the NBA, MLB, NHL or NFL unions supported USA made products???? I remember when all US sports teams apparels where or HAD TO BE union made, now know one cares!!!! Every ones in it for themsleves… bottom line is, the majority of US consumers play dumb and don’t look at labels and don’t care! I personally call them out as what I see them as … communist China supporters. Period.