Originally posted on our Management Blog.
Manufacturing Productivity and the Shifting US, China, and Global Job Scenes-1990 to 2005 (working paper – July 2005) by William Ward, Clemson University:
…
I find that 100% of the (3.0 million) manufacturing jobs lost since 2000 were lost to manufacturing productivity growth and that 100% of the (1.8 million) jobs that should have been added back by GDP growth in the US after 2000 were shifted to other sectors of the US economy than manufacturing.
In this paper he is examines the factors leading to a reduction in manufacturing job worldwide. He concludes that job losses are mainly due to increased manufacturing productivity (worldwide, manufacturing productivity is increasing and jobs are decreasing – including China).
Manufacturing output is also increasing worldwide, most notably in China, but also in the USA (which many seem to neglect when they talk about things like the “eroding manufacturing base in the USA”).
So 10-20% of manufacturing jobs disappeared worldwide from 1995 to 2002. China lost between 17% and 34%; the US lost 11.4%.
I have to be careful because I believe productivity gains are the main reason for decreasing number of manufacturing jobs (that is just what seems right to me) so I am very ready to accept claims that the data shows that this is true. Nevertheless, William Ward makes the case well.
Manufacturing as Percent of Total Civilian Employment, 1990 and 2004 (2003 for UK and France) as well as Productivity Growth and Employment Changes.
| Country | 1990 | 2004 | 1992-2003 productivity growth | 1992-2003 change in manufacturing jobs |
|---|---|---|---|---|
| United States | 18.0% | 11.8% | 57%* | -13.6 |
| Japan | 24.3% | 18.3% | 54.3% | -25.7% |
| China (estimates – see paper) | 60.0% | -18.0% | ||
| Germany | 31.6% | 22.7% | 35.1% | -21% |
| United Kingdom | 22.3% | 14.9% | 35.9% | -18.1% |
| France | 21.0% | 16.3% | 58.0% | -10.9% |
* US productively gains estimated based on 1990-2003 figures in the paper
Based on charts in the paper (based on Comparative Civilian Labor Force Statistics, 10 Countries, 1960-2004 and Output per hour in manufacturing, 15 countries or areas, 1950-2004
As an epilogue to his paper, he states: “I end this paper with an appeal for the multilateral organizations to commit themselves to the task of providing researchers and policy analysts with datasets capable of reflecting the full extent of global economic relations.” I agree. It is difficult to find good data to get a clear picture of global manufacturing especially since these shifts are taking place with ever greater speed.
Related Posts:
- Manufacturing and the Economy
- Global Manufacturing Data by Country
- US Manufacturing Plant Construction
- America’s Manufacturing Future
- Manufacturing’s Influential Thinkers
Comments
6 Comments so far
[…] Growing an economy to create huge numbers of even decent jobs is very difficult, especially when starting from where China and India were in 1990. Often the strength of China’s economy blinds people to the continued great difficulty. Good jobs are the lifeblood of an economy. China has lost far more manufacturing jobs than any other country. Yes, even as they have grown their manufacturing production enormously. The entire world is increasing manufacturing output while decreasing manufacturing employment, see: Manufacturing Jobs Data: USA and China. […]
[…] 5,000 jobs is a huge number (even looking out 20 years). Manufacturing is still a huge economic factor (for the USA and the world) but investing in creating science and engineering centers of excellence is critical in determining where strong economies and good jobs will be 30+ years from now. They don’t explain what those 5,000 jobs are, but it seems that thousands could be for science and engineering graduates. The value of that to Boston’s economy is huge. […]
Once again I repeat my message that the end of manufacturing in the USA is greatly overstated. While surging exports are good for the economy the massive current account deficit needs to shrink a great deal before the USA can be said to have stopped living far beyond its means…
[…] Previous posts I have made on the topic include: Manufacturing Value Added Economic Data – Manufacturing Jobs Data USA, China and globally, even manufacturing jobs data can include data quality issues but it is probably cleaner than most […]
[…] jobs. I have posted about this previously but have trouble finding much worth posting about: Worldwide Manufacturing Job Data – Manufacturing Jobs. The Unites States Department of Labor, Bureau of Labor Statistics has […]
The data is all indexed at 2002 = 100. Interestingly the USA has increased output per hour much more than any other country since 2002. The USA index stands at 146, the next highest is Sweden at 127 then the UK at 120. Italy is the only country tracked that fell since 2002, to 94…