Sept. 29, 2003

Lost manufacturing jobs may be gone for good, U-M economist says

ANN ARBOR, Mich.—Despite new initiatives by the Bush administration to address long-time job declines in U.S. manufacturing, a University of Michigan economist says the outlook for American factory jobs remains bleak.

If output and productivity growth in the next five years matches the levels enjoyed during the economic boom of the last decade, manufacturing employment would only amount to 15.4 million jobs, down 13 percent from its 1990s peak of more than 17.6 million jobs in 1998—and up just 5 percent from today’s levels, says Donald Grimes, an economist at the U-M Institute of Labor and Industrial Relations, which is directed by the Michigan Business School and U-M School of Social Work.

“This is an optimistic scenario,” Grimes said. “Instead, I think we will be doing well if the manufacturing sector has as many jobs five years from now as it does today.”

Manufacturing jobs now number a little more than 14.5 million, down nearly 10 percent since the beginning of the recession in March 2001.

Grimes says employment in manufacturing has been in overall decline since 1979, when it reached its all-time high of 19.5 million jobs. Since then, he adds, the United States has lost about 5 million factory jobs—3 million since 1998.

“The acceleration of job losses recently reflects the impact of the recession, but more importantly the increased imports of apparel, textiles and leather products from Third World countries and the fact that manufacturing productivity is now growing relatively rapidly,” he said.

Using data from the Bureau of Labor Statistics, Grimes found that employment in most manufacturing sectors rose between 1993 and 1998, except among apparel, textiles, leather, paper, chemicals, and petroleum and coal products industries. But since 1998, all manufacturing industries have lost jobs:

· Apparel (down 56 percent)
· Leather and allied products (down 50 percent)
· Textile mills (down 40 percent)
· Primary metals (down 26 percent)
· Computer and electronic products (down 25 percent)
· Machinery (down 23 percent)
· Electrical equipment (down 22 percent)
· Printing activities (down 17 percent)
· Paper and paper products (down 16 percent)
· Fabricated metal products (down 16 percent)
· Transportation equipment (down 15 percent)
· Petroleum and coal products (down 14 percent)
· Plastics and rubber products (down 12 percent)
· Wood products (down 12 percent)
· Furniture products (down 10 percent)
· Chemicals (down 8 percent)
· Beverage and tobacco manufacturing (down 7 percent)
· Non-metallic mineral products (down 6 percent)
· Food manufacturing (down 2 percent)

Contact: Bernie DeGroat
Phone: (734) 936-1015 or 647-1847
E-mail: bernied@umich.edu

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