In the thirty years after WWII, a job in manufacturing was a skilled career that supported a middle-class family. However, starting in the mid-1980s, most of these jobs disappeared. “Two million jobs were lost between 1980 and 2000, and 5.5 million jobs were lost between 2000 and 2017”. A series of intenrational agreements implemented the free flow of goods, services, and money around the world. These include the World Trade Organization, General Agreement of Tarriffs and Trade, the North American Free Trade Agreement, and others.
China’s entry into the WTO in 2001 marked a significant milestone. In 1980, US imports from China were $3 billion (adjusted to 2018 dollars). By 2018, imports exceeded $500 billion, accounting for over 25% of all US imports.
Between 1980 and 2020, employment in manufacturing goods in the US decreased from 33 million to 22 million workers, a 35% drop. From 1998 to 2019, 70,000 manufacturing plants shut down. Meanwhile, jobs in low-wage sectors like retail, education, healthcare, leisure, and hospitality grew from 16 million to 46 million, a 180% increase. As Professor Temin noted, the US now has a two-tier job system: the top 10% of workers in the FTE sector (finance, technology, electronics) and everyone else working in low-wage jobs.
A cautionary note about the return of manufacturing to the US
In recent years there has been much political posturing about the resurgence of manufacturing in the US. US manufacturing companies have consistently undertaken campaigns to increase productivity, mainly through automation and work rationalization. These efforts aimed to reduce the amount of human labor required to sustain production. For example, between 1962 and 2005, the US steel industry cut 400,000 jobs while maintaining the same level of steel production. So, productivity improvements have contributed to a decline in manufacturing jobs in the US.
