According to a report from Ball State’s Center for Business and Economic Research (CBER) and Conexus Indiana, the American manufacturing industry is hardly in the downward spiral that some have projected — and they anticipate openings for new manufacturing jobs will range from 80,000 to 150,000 per year over the next 10 years.
“There are major misunderstandings among the public and the media about the manufacturing sector,” said Michael Hicks, director of CBER and the George and Frances Ball Distinguished Professor of Economics at Ball State. “The U.S. manufacturing base is not in decline, and we have recovered from the recession. Nor are jobs being outsourced because American manufacturing can’t compete internationally. Moreover, new jobs in manufacturing pay well above the average wage.”
The study notes that the Great Recession had lost its stranglehold by 2014, when U.S. manufacturers attained record levels of production.
“Changes in productivity, domestic demand and foreign trade all impact manufacturing employment in the U.S.,” Hicks said, “and it’s important to clarify those impacts in order to understand what is happening in the manufacturing and logistics industries.”
The study also found that:
• More than 87 percent of manufacturing job losses are due to productivity gains, including better supply chains, more capital investment and advanced technology.
• Only 4 percent of manufacturing jobs have been lost to international trade (also known as outsourcing) since 2000.
• Since the end of the Great Recession in 2009, the economy has added 750,000 manufacturing jobs.
• The biggest job losses occurred in low productivity sectors with low transportation costs.
The report points out baby boom generation retirees are leaving behind good, well-paying jobs in those sectors, and younger workers are filling those jobs at an unprecedented rate. Recent new hire salaries averaged $20.06 per hour — almost $42,000 a year. As millennials move into the workforce, wage gaps between new and existing jobs are primarily age- and tenure-related, he said.
The report, “The Myth and the Reality of Manufacturing in America,” and the individual state report cards may be found online.