Feb 10, 201705:59 PMBlog

Study: Most manufacturing jobs lost to productivity gains

Feb 10, 2017 - 05:59 PM

America has lost millions of manufacturing jobs over the years, but the vast majority of those were lost due to productivity gains, not outsourcing or trade.

That’s according to a study performed by Ball State University’s Center for Business and Economic Research. The study found that about 87 percent of manufacturing job cuts are due to productivity gains, including better supply chains, more capital investment and advanced technology.

Only about four percent of manufacturing jobs, the study also found, have been lost to international trade (also known as outsourcing ) since 2000.

More findings: The economy has added 750,000 manufacturing jobs since the end of the recession, with the biggest job losses occurring in low productivity sectors with low transportation costs.

The report also points out baby boom generation retirees are leaving behind good, well-paying jobs in those sectors, and younger workers are filling those jobs at an unprecedented rate. Recent new hire salaries averaged $20.06 per hour — almost $42,000 a year. As millennials move into the workforce, wage gaps between new and existing jobs are primarily age- and tenure-related.

“There are major misunderstandings among the public and the media about the manufacturing sector,” said Michael Hicks, director of CBER and the George and Frances Ball Distinguished Professor of Economics at Ball State. “The U.S. manufacturing base is not in decline, and we have recovered from the recession. Nor are jobs being outsourced because American manufacturing can’t compete internationally. Moreover new jobs in manufacturing pay well above the average wage.”


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