Manufacturing Jobs Data: USA and China

Posted on April 7, 2006  Comments (6)

Manufacturing Productivity and the Shifting US, China, and Global Job Scenes-1990 to 2005 (working paper – July 2005) by William Ward, Clemson University:

Manufacturing productivity growth from 1990 to 2004 should have taken away 7.5 million of the 17.7 million manufacturing jobs that existed in the US in 1990, while GDP growth should have added back (at the new productivity levels of 2004) 5.7 million manufacturing jobs-for a net loss of 1.8 million. In fact, the US economy lost 3.3 million manufacturing jobs during that period

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”).

I estimate global manufacturing employment to have been between 150 million and 200 million workers in 2002, with those numbers reflecting a global decline of 20-30 million manufacturing employees in 2002 compared to 1995.

So 10-20% of manufacturing jobs disappeared worldwide from 1995 to 2002. China lost between 17% and 34%; the US lost 11.4%.

I conclude that, during the period 1990 to early-2005, US manufacturing productivity growth cost the US several times more manufacturing jobs than all other factors combined-—including global competition.

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.

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6 Responses to “Manufacturing Jobs Data: USA and China”

  1. Curious Cat Management Improvement Blog » Blog Archive » China’s Manufacturing Economy
    July 6th, 2006 @ 7:40 pm

    The constant mention of the erroding manufacturing sector on the USA I believe leads many to think it is shrinking and small. Yet output continues to increase and the share of worldwide manufacturing output is holding steady…

  2. Curious Cat Management Improvement Blog » Blog Archive » Manufacturing Value Added Economic Data
    August 16th, 2006 @ 8:37 am

    […] Manufacturing employment is not shown in this data but in, Global Manufacturing Job Data, we explored data showing it is decreasing globally while manufacturing output continues to increase globally. The United States is losing manufacturing jobs more slowly then the rest of the world (and China has lost far more manufacturing jobs than the USA, from 1992-2003). by curiouscat   Tags: Manufacturing, Economics, Data   Permalink to: Manufacturing Value Added Economic Data […]

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    September 3rd, 2006 @ 7:43 pm

    […] This article does a good job of explaining why “quality/lean…” should not be viewed as just process improvement, and innovation as something separate. I agree […]

  4. Curious Cat Management Improvement Blog » Manufacturing Jobs
    September 23rd, 2006 @ 3:38 pm

    […] Focusing on manufacturing output and jobs and their importance to the economy makes sense. However, I think people need to update the model they use to set expectations of manufacturing job levels. And given a world in which no countries seem able to do gain manufacturing jobs, it seems more reasonable to expect a continuation of decreased jobs and increased output until that worldwide trend changes. […]

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    October 15th, 2006 @ 8:08 am

    […] It is also one of the few articles to acknowledge that manufacturing production is up while manufacturing employment is down. […]

  6. Curious Cat Investing and Economics Blog » China’s Job Market
    November 24th, 2006 @ 12:04 pm

    […] 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[…]

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