Dave Swenson

Most of us don’t really know that much about the economy.  We don’t know, for example, which private sector industry group in the U.S. has the most workers (retail sales at 18.4 million), or which sector grew the most over the last decade (mining at +100%), or which sector declined the most (manufacturing  at -15%).

OK, maybe that last one is a more widely known, especially if you live in the Midwest.   And if it is, then a statement by Michael Hicks, director of the Center for Business and Economic Research at Ball State University, is truly curious. In a Des Moines Register story on Iowa’s manufacturing situation and its strengths on July 7th, he is quoted as saying the “U.S. manufacturing base is not in decline, and we have recovered from the recession.”  

Perhaps Mr. Hicks is referring to total productivity as measured by real gross domestic product or the profits of some manufacturing firms like Apple, the big three automakers, or John Deere.  But if he is talking about manufacturing jobs and the well-being of manufacturing workers, he is wrong.

Here are some facts from the Bureau of Labor Statistics (BLS):

•  In 2007, the year the Great Recession started, there were 13,879,000 U.S. manufacturing jobs.  That number dropped to 11,528,000 jobs in 2010, and had only recovered to an average of 12,188,000 jobs by 2014.  In short, the U.S. has only reclaimed 28 percent of the manufacturing jobs lost during the recession.
• Furthermore, in 2007, the nation had 361,419 manufacturing establishments. It continued to shed firms all the way through 2013 before recovering slightly in 2014 to 338,018 establishments.  For 2014, a year of minor recovery, the nation still had 6.5 percent fewer manufacturers than the year before the recession.
• Iowa in 2007 had 229,600 manufacturing jobs.  It lost 29,100 of those jobs by 2010, and then grew to 216,700 manufacturing jobs annually for 2014.  Iowa did better than the U.S.; it recovered about 56 percent of its lost manufacturing jobs.  Though it recovered at twice the national rate, there are many fewer manufacturing job opportunities in the state than there were in 2007, and recent evidenced indicates the state’s production job recovery has stalled.
• And finally, we can look at other BLS numbers from their Job Openings and Labor Turnover (JOLTS) data base.  With this data set analysts can measure the number of job openings in an industry relative to the number of persons who are unemployed and seeking those jobs.  This spring, there were 452,600 unemployed durable goods manufacturing workers, but only 184,900 job openings – nearly 2.5 job seekers per job opportunity.  In the nondurable goods manufacturing sector there were 2.6 job seekers per job opening.  There is a pronounced shortage of manufacturing jobs relative to demand.

 Manufacturing is important, manufacturing is an integral part of the nation’s economy, but as measured by jobs, manufacturing is a continuously smaller fraction of the U.S. labor economy.  Manufacturing’s recovery from the depths of the Great Recession has been pitifully lackluster. Many people who worked in manufacturing have not been rehired. And those families certainly have not “recovered from the recession.”