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Why Are There Fewer US Manufacturing Jobs Today? 4 Driving Forces to Understand

With the release of the May 8, 2015 Jobs Report, many businesses and employees within the manufacturing industry have grown concerned. According to the report, the average number of total US manufacturing jobs in the United States changed very little since April. Furthermore, this report represents the second consecutive month that actual job growth results fell short of administration expectations. At the heart of the jobs issues, rests an unusual factor in a growing, stabilizing economy: US production of goods has increased while total number of US manufacturing jobs has decreased. Several key factors play into this startling fact, and failure to understand why and how current US manufacturing jobs appear to be declining could easily create a sense of impending doom for small to large businesses. To help businesses of many sizes regain control over their areas of expertise, here are the primary reasons today’s US manufacturing jobs have trodden back into the trenches of a once-powerful, assembly-line-laden economy.

US manufacturing jobs BLS report

U.S. Bureau of Labor Statistics US manufacturing jobs Report - April 2015

Technological Advances

Traditionally, you think of US manufacturing jobs as someone physically involved in the production or creation of a product. However, modern technological advancements have changed the landscape of how a factory, or other manufacturing structure, operates. Specifically, the use of assembly lines has been transformed into a whirlwind of computer-controlled systems and robotic equipment to maximize efficiency, accuracy, and production cost. Ironically, this very tech-savvy change in manufacturing has led to a new problem. The workers needed in manufacturing must have a highly-developed set of skills to work in such technological environments. As a result, a worker may need a degree or other form of training beyond simple manufacturing, such as engineering, computer-electronics, or robotics. However, humans still have the capacity to perform specific functions that a machine cannot, which results in a higher demand of cheaper labor than available here in the US.

Cheaper Products From Alternate Economies

You have, no doubt, heard of offshore manufacturing, or outsourcing, throughout the course of the previous decades. However, many businesses want to restore the grandeur to the American Manufacturing Industry; a movement known as reshoring. Unfortunately, alternate economies have access to much cheaper labor and cheaper physical resources, such as plastics, metals, or wood, than the US. Therefore, some companies continue to use outsourced services for a large portion of their manufacturing in addition to manufacturing resources within the US.

Environmental Concerns

In close proximity to available resources, US manufacturers face another challenge to operating without hindrance. Widespread concern over the eco-friendliness of a given product, or any processes involved in the manufacturing process, have resulted in a multitude of fines, boycotts, or other mass criticisms of such companies. This is largely due to the role that social media and awareness through the Internet has played in the course of manufacturing. While more US manufacturers make specific moves towards ensuring the future of their companies, the decree for a sound, environmentally-friendly agenda rings the loudest. Unfortunately, some of the newer technologies used to produce so-called “green” manufacturing requires more capital and resources, which results in a cyclic process of requiring more advanced skill sets of workers, a greater dependence on technology, and more environmental concerns to follow. However, the US Jobs Report also affects the way the public and proprietors view the manufacturing industry.

Manufacturing Job Masquerade; Is a "Factory-Less" Manufacturing Job....Not A Manufacturing Job?

With the rise of the digital age, more companies have entered an era of product-less or factory-less manufacturing. Ultimately, this means companies produce items that do not require physical space. This includes nearly every digital application available on your smart phone, tablet, or laptop. To further this point, some manufacturers may not have a factory-space, which removes them from being counted within the manufacturing industry. Apple has experienced this phenomenon first-hand following large sales of new technologies in the US, which were manufactured in China. Ultimately, the majority of the work on Apple technologies has been completed here in the US. These technical jobs, such as engineers, designers, computer-code analysts, and robotics experts, may not fall into the category of manufacturing, but their efforts are required for outside manufacturing to take place. This results in a confounding arena where US manufacturing jobs are hidden under other categories of the US Jobs Report.

Take the May 8th Report at slightly less than actual value. Consider how the overall job growth continued in a positive slope over the course of the past three years, speaking aside from slight growth and drop cycles experienced between 2009 and 2012—immediately following the housing market crash. The report shows that the manufacturing industry, while not making huge improvements from last month, continues to be adding more jobs than losing jobs over the course of the past month. Additionally, some manufacturing industries, such as oil and gas production, appear to have added significantly more jobs, but these jobs are the result of worker strikes coming to an end. With these factors playing into the overall analysis of the manufacturing industry, US manufacturing jobs appear obsolescent. However, you need to know where to look before making a decision of whether manufacturing is growing or slowing in the modern world. And, as we said in this post about why it is OK that US manufacturing jobs won't ever get back to peak levels of past decades, in the end, it's about output and the job multiplier effect manufacturing tends to have.

What are your thoughts on why there are fewer US manufacturing jobs? Let us know in the comments below!

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
  • The numbers are fudged, real actual unemployment using the formula used by the government up until and during the Clinton Administration can be found at http://www.shadowstats.com (about 23%). To get a real idea of what’s happening on the street, http://www.dailyjobcuts.com is another site to visit.

    • Thanks for sharing, Ron! Looking at this stuff now. Appreciate the info. -Adam

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  • Many manfucturers outsource their non-core activities to service providers. A white paper was written by Proxima that statistically supports this trend of outsourcing. There is also a movement know as inside-outsourcing where manufactures invite supplier to operate within their plants performing mny non-core services, facilities management, production line supply, industrial cleaning are all such services.

  • Kevin King

    Let’s not forget about the increasingly onerous regulatory environment and the influence and pressure of Wall Street for stock performance against their expectations. It’s time for companies to tell Wall Street to go stick it in their hat. The pressure to hit earnings expectations or be punished on Wall Street is detrimental to us all. I personally know of more than one CEO that would bring manufacturing back onshore except that his stock price would take a hit and the price of goods would shift toward the higher end of their market – but they realize they would be employing people here, adding to the economy here, building their communities here. Another factor are the so-called free trade agreements. This may sound somewhat protectionist, but as other governments subsidize their industries, manipulate their currencies and disregard environmental treaties (Kyoto was lived up to … except by the US, who didn’t sign it), we should really take a step back and look hard at the cost-benefit results of some of these free-trade agreements. We get lower priced goods, but we lose higher paying jobs. I think I’d rather have the jobs and pay a little more for what I’m buying. The availability of JOBS help to address and solve a myriad of social issues we are dealing with today – poverty, hunger, homelessness, etc. Sorry for the rant!

  • Kevin King

    correction – I meant to say the Kyoto treaty was not lived up to, except by the US…

  • Pingback: A Brief Timeline of Moments from the American Manufacturing Industry()


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