At one time, manufacturing in the U.S. was the powerhouse of all the industries. In 1947 (post-WWII) it accounted for 25% of all value added to the American economy – more than any other industry at the time. Today, things are different. In 2017 it accounted for only 12% of the value-added economy – less than half of what it was 70 years ago post war. What changed?
A recent report put out by the Center on Education and the Workforce at Georgetown University explains how this shift occurred. For the most part, two trends starting after 1991 had the greatest effect on jobs in the manufacturing industry: automation and offshoring.
the impact of Automation on manufacturing jobs
To show the effect of automation, the number of U.S. manufacturing jobs fell to its lowest point in 2009, down 33.2% from what it was in 1991. At that same time, output was up 33.78%. If employment was down 1/3rd, output up 1/3rd and output per worker up as high as 89% of available time, it can only mean two things: increased automation with more manufacturing processes done robotically. It takes fewer people to program robots to work and unless an equipment breakdown occurs, they never stop – no sick days, no breaks, no vacation days, no lost days from on the job injuries – all things that do affect output when the same tasks are done by humans.
How Offshoring Broke American Manufacturing
Starting around the year 2000, more U.S. companies started to export work to foreign countries because their labor was cheaper. As could be expected, this reduced the number of manufacturing jobs here in America; more work was being done overseas at a for a much lower labor cost. This was especially prevalent in automobile manufacturing, but also had a great impact in the manufacturing of other items. Even today, it is hard to find a product that is entirely made in the U.S. While it may be assembled here in America, parts going into the final product were more than likely manufactured in a country other than ours.
Impact on Worker Education
With automation and offshoring also came a shift in the education level of manufacture workers. With fewer line jobs, workers programming robots and managing global operations came more into play. In 1991, 4.49 million manufacturing jobs were held by workers with no more than a high school diploma. By 2016, that number had declined to 2.52 million. In comparison, workers with a bachelor’s degree or higher increased from 2.81 million in 1991 to 3.57 million in 2016.
But there is good news among all the doom and gloom. As recent as 2016, manufacturing still provided the best opportunity of getting a job without a bachelor’s degree than any other industry – capturing 16% or 4.8 million of available jobs.
And at every education level, those that work in manufacturing earn more than in any other blue-collar or skilled-services industry. Blue-collar industries include transportation and utilities, wholesale and retail trade, natural resources, and construction; skilled-services industries include healthcare services, education services, consulting and business services, financial services, government services, leisure and hospitality services, and personal services.
How does this impact national security?
It goes without saying that this trend has had a far-reaching impact. We can see cities like Detroit or Pittsburgh – once hubs of American industry – now are struggling to survive. With fewer manufacturing jobs available, generations of young Americans have taken on school debt to secure employment.
But there’s yet another sector that’s affected: supply chain security. Americans depend heavily on phones, computers, servers, and other electronics that are made partly or wholly abroad. As we’ve seen in the ongoing Huawei controversy, we can’t be sure that our adversaries are not monitoring the behavior of U.S. citizens through their mobile devices. This is exponentially more concerning for the U.S. Government and Department of Defense. With so many electronic components manufactured or assembled overseas, the likelihood of our adversaries being able to tamper with our devices is higher and higher. As American manufacturing jobs continue to decrease, supply chain security for our government and personal devices will become even more critical – and more difficult.
