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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 5, 2013 at 10:22 AM

Manufacturing jobs aren’t staging a big comeback

Factory orders rose 1.7 percent in September powered by demand for commercial aircraft (n.b.). Their value, $490.8 billion, now stands at a record, surpassing the previous top reached before the recession.

What missing are the jobs, which historically have paid much better than most service positions. Factory jobs were little changed in the September employment report. As the chart below shows, manufacturing employment entered a deep slump after 2000 (when China entered the World Trade Organization) that was only worsened by the Great Recession.

On average, 17 manufacturing operations closed every day between 2000 and 2011, according to the Information Technology and Innovation Foundation. Employment has not made a meaningful rebound.

fredgraph2

This data seems at odds with the many stories we read over the past year about manufacturing coming back to the United States.

Many were inspired a Boston Consulting Group study indicating that “more than half of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the U.S. from China or are actively considering it.”

But that doesn’t mean job growth will be large. Remember the New York Times story about textile factories returning to South Carolina. The trouble, for working people, is that these highly automated plants need few employees. When I worked in the Carolinas in the late 1990s, more than 250,000 people worked in textile and apparel factories.

This makes the Washington state aerospace cluster all the more remarkable and valuable. It employs a large number of highly skilled workers, most of whom weren’t displaced by the offshoring of the 2000s.

And Don’t Miss: Sweden — high taxes, a generous welfare state and more billionaires per capita than America | Slate

Today’s Econ Haiku:

No need for Vegas

If Boeing and labor jell

We hit the jackpot

Comments | More in Aerospace/Boeing, Manufacturing | Topics: Manufacturing jobs

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