Reasons for the Decrease of Manufacturing Jobs in the U.S.

The promise of an increase in manufacturing jobs has a break in it. There hasn’t been an increase. There has been a decrease of over five million of these jobs in the U.S. since the year 2000. What else can we do? What are the primary reasons behind this decrease and will there ever be an increase? As someone in the United States, it’s imperative to understand what is going on in the work force of our very people.

Manufacturing jobs are jobs that consist of “…the transformation of raw material into new products. The process is mechanical, physical, or chemical. The raw materials include commodities or components. It is the second stage of the supply chain” (Amadeo). Basically, it’s a big part of our work force here in the United States because there are so many mills, factories, and plants where these jobs take place. But, they also include “bakeries, candy stores, and custom tailors” (Amadeo). They “involve creating new products” and can be of titles from “Welder” to “Tool and Die maker” (Doyle). It’s quite extensive, to say the least.

These jobs are the largest in the world. They make up “18.2 percent of the world’s goods. That’s more than the entire economic output of Canada, Korea, or Mexico” (Amadeo). Not only are these jobs important, but they make up such a major part of our economy. “It is responsible for roughly two-thirds, or roughly $208 billion, of all U.S. business research and development spending” (Scott).

Unfortunately, there has been a massive decline in this part of the workforce. But why is that? Mostly because “…a shift to a service-based economy. That’s due to the rise of banking and other financial services. That’s happening all around the world” (Amadeo). The U.S. standard of living is also a cause because our labor costs are higher than in other places (Amadeo).

Another reason is because of the many “federal policies [that] decrease U.S. competitiveness. That makes U.S. manufacturing costs 20 percent higher, even when labor costs aren’t included” (Amadeo).

What can we do? Is there a good outlook? “Manufacturing is forecast to increase faster than the general economy” (Amadeo). It is said to grow 3% this year and 2.8% next year. However, it is also said to slow to 2.6 in 2019 and 2% in 2020 (Amadeo). So, there is an outlook, but not a great one because it will slow down over time.

To increase these jobs, the U.S. must increase productivity and lower gas prices because “both productivity gains and low oil prices reduce the U.S. production costs” (Amadeo). The U.S. is rising the wages in emerging markets because of our standard of living and demand for higher incomes. And the next one is the “awareness among consumers that “Made in America” means jobs for Americans” which are most likely to buy (Amadeo). Either way, to do these, and we slowly are, is to be patient.

Given these points, the manufacturing jobs will have an increase in the upcoming year, but will then decrease again. It’s not much, but it’s something. For what we can do here in the U.S. is recognized that this is an ongoing problem and will still be a problem. So, be wearing of your income, the market, and “Made in America” labels. The productivity needs to increase, with the lower of costs. In these, there should be a more understanding of this work force.

 

References

Amadeo, Kimberly. “5 Reasons Why America’s Manufacturing Is Growing Again.” The Balance, 31 Aug. 2017, www.thebalance.com/u-s-manufacturing-what-it-is-statistics-and-outlook-3305575.

Doyle, Alison. “Job Titles for the Different Manufacturing Positions.” The Balance, 1 Sept. 2017, www.thebalance.com/manufacturing-job-titles-2061501.

Scott, Robert E. “The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs.” Economic Policy Institute, 22 Jan. 2015, www.epi.org/publication/the-manufacturing-footprint-and-the-importance-of-u-s-manufacturing-jobs/.

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