U.S. Manufacturing Job Losses: Leaner or Just Meaner?

The gain in U.S. factory output last month was the largest in a year, and Bloomberg describes the sector as “at the center of the expansion.”

Yet a new government report finds that the United States has lost more than a quarter of its high-tech manufacturing jobs in the past decade. The report by the National Science Board doesn’t explain how the jobs were lost, but the Chicago Tribune quotes Rolf Lehming, program director, as saying:

We don’t have any data that says these jobs were outsourced.

Manufacturing methods that bring greater efficiency and higher productivity from fewer workers have been cited before.

Among the report’s findings:

  • 28 percent, or 687,000 jobs, have disappeared since a peak of 2.5 million in 2000. In some states, the rate was higher, such as 31 percent in Illinois and 29.2 percent in Ohio.
  • “Substantial and permanent” losses have taken place in such sectors as aerospace, pharmaceuticals, telecommunications equipment, computer and office equipment, and scientific instruments.
  • U.S.-based multinational companies are creating research-and-development jobs abroad at a much higher rate than at home.  Since 2004, about 85 percent of all R&D job growth has taken place at those companies’ locations outside the United States.
  • China has more than doubled the number of doctoral degrees granted in engineering, now far exceeding the number awarded in the United States.
  • In 2009,  the United States spent $400 billion on R&D, while Asia spent $399 billion. However, with wages rising in China, the report noted that ““China’s overwhelming manufacturing cost advantage over the U.S. is shrinking fast.”

It warns that the United States is in danger of losing its position of leadership in this area.

Through its Advanced Manufacturing Partnership announced in June, the Obama Administration has pledged to collaborate with private-sector partners to boost innovation and the job skills needed for next-generation manufacturing. Those jobs increasingly call for computer, math and communication skills — and increasingly some college education. GE organized a media junket, covered by Forbes back in July, to explain its vision of the higher skills needed in advanced manufacturing.

And a new report by the Brookings Institution credits the strength of manufacturing for boosting the long-depressed cities of Detroit and Buffalo. That report, though, illustrates how the recession has sapped the economic strength of North America and Europe and accelerated a shift in economic power to Asia.

Comments

  1. BY Fred Bosick says:

    US based corporations are enjoying excellent profits and, combined, have a trillion in cash. The government has no business granting further tax breaks and “collaborations to boost innovation and job skills”. Business is solely responsible for the erosion of industrial might by outsourcing and offshoring jobs.

    Why match the PhD output of China when business won’t employ those who already have the degree here? This is a suspect statistic anyway when considering that the USSR graduated more engineers in the late ’60s and Japan in the ’80s. Where are those engineers now?

    The best way to ensure a supply of US based workers in advanced technology is to **pay** them a good salary and not lay them off! There are plenty of underemployed and technically savvy citizens who are only too happy to take these jobs if they can afford a family and a middle class lifestyle. Many of them are not 25 years old, but 45 and older. They can still contribute.

  2. BY Phil says:

    Good article. Maybe instead of worrying about offshoring, all of us need to be more competitive. Follow the herds.

  3. BY Clarence says:

    No Data that the Jobs were outsourced? On the face that is ridiculous. One single sector one can look at and see the jobs lost through outsourcing is the cellular phone industry. Apple alone has created 700,000 jobs in and around Asia while Motorola no longer produces a single cell phone in the United States. These are jobs from advanced engineering to assemblers. Nothing beats OJT in the advanced technology sector. I think the problem the US is going to face as we retire or set aside our knowledge base as they grow older with fewer and fewer openings is the fact that the new hires in these positions will not benefit from the years of wisdom passed down from mentor to student. More college is ok but without the knowledge base in the specific fields when a graduate get’s a position in the real world it’s worthless.

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