Manufacturing: Where the Jobless Recovery Is Most Evident

Over at Slate, Matthew Yglesias has a sharp post about what he calls the ‘Mythical American Manufacturing Renaissance.’ He uses three FRED-generated charts to make his point. The first shows the recent, apparently-substantial rise in US manufacturing employment.


The next two take the bloom off this rose by showing that the last time the country employed this few manufacturing workers was during the 1940s (after the WWII production surge ended):


And that the percentage of workers employed by the manufacturing sector has been dropping steadily for well over half a century, and is now  below 10%:


But there has been something of a renaissance in US manufacturing output, just not in employment. As this chart shows, output is not quite back to its all-time peak, but it has bounced back snappily since the Great Recession ended:

Graph of Industrial Production: Manufacturing (NAICS)

So the problem is not that there’s been no renaissance, it’s that it’s been a jobless one — yet another example of how output is becoming decoupled from employment in our ever-more-technologically-advanced economy. This decoupling is evident from a graph that juxtaposes US manufacturing output and employment since the turn of the century:

FRED Graph

Note that between the last two recessions manufacturing output (the blue line) went up quite steadily while employment (red line) did nothing but drop. Unfortunately for job seekers, I expect that pattern to resume in the very near future. Employment growth in manufacturing has recently tapered off, and I expect it to turn negative, even as output continues to increase. The historical pattern is very clear and very regular here, and I see no reason it won’t repeat itself.

In fact, as recent innovations in sensing, monitoring, robotics, 3D printing, and many other fields get adopted by manufacturers I predict that the output-up-while-employment-down trend will accelerate.

Anyone see a good reason to believe otherwise?