Saturday, October 26, 2019

[NJFAC] Bringing Back American Factory Jobs? What Do the Numbers Say? Frank Stricker

             During the Great Recession, manufacturing job totals began to recover in mid-2010. In the decade that followed, we added 1.3 million jobs to factory totals. Sounds good. All other things being equal, having more regular jobs is a plus.
            But not all factory jobs are good ones. Some are poorly paid and very dangerous, for example, in meatpacking. The average hourly wage of non-supervisory and production employees in manufacturing was only $22.24 last month. While $22.24 is way above the federal minimum wage, it is not so high. It is even below $23.65, the average hourly wage of non-supervisory and production workers in all private non-farm businesses. And of course a lot of factory workers earn less than the average.
            As to job totals, there has not been a very large increase in factory positions. It is true that during Donald Trump's presidency, job growth has been faster than during Obama's second term. But not hugely so. And the manufacturing sector is currently in a kind of recession. There's been essentially no job growth in 2019.
            In a longer perspective, we have not come far in the recovery from the Great Recession. Even after a decade of increases, the total number of all employees in manufacturing is about equal to where it was in December of 1941. As numbers and charts from the Bureau of Labor Statistics show, there have been no substantial lasting surges since the 1960s. The World War II economy boosted job numbers to a new, jagged plateau. Then the war-assisted economy of the 1960s lifted job totals to another, higher, jagged plateau. But jobs fell off the plateau in the early 1980s, and another plunge began in the last years of the Clinton boom. That descent continued through the Bush presidency and the Great Recession. Almost none of it has been reversed.  Causes and policy effects are topics for another time, but in brief, automation is a factor in job loss as are trade treaties that make it easy for importers and profitable for U.S. companies to send production overseas. It's doubtful that President Trump's tariff policies have reversed long-term causes. Chaotic trade policy may actually have caused less job growth than there might have been. Jumpy, poorly conceived policies confuse and unsettle business planners, investors, and trading partners. And for the most part, tariffs on Chinese products send Chinese factory jobs from China not to the U.S., but to other Asian countries and even to Mexico. There's more on factory economics, policies and politics in a terrific article: Don Lee, "Industrial Sector Enters a Recession," Los Angeles Times, October 15, 2019, Business Section, C1, C3.
Frank Stricker is a board member of NJFAC and emeritus professor of history at California State University, Dominguez Hills. His views are his own and not those of either organization.  His new book, American Unemployment: Past, Present, and Future, will be out in June.

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