Manufacturing employment is up from three years ago. Why so dissatisfied?
figure 1: Manufacturing employment, 000, sa (blue). Source: Bureau of Labor Statistics.
As of March, manufacturing employment increased by 1.6% (on a logarithmic basis) compared with the same period last year. Real wages have also risen, although they have only recently returned to November 2020 levels (but are above pre-pandemic levels), while hours worked have fallen from their October 2022 peak.
figure 2: Manufacturing earnings per hour in 2023 (blue, left axis), and total hours worked by manufacturing workers (tan, right axis), including production workers and non-supervisory workers. The authors use X-13 to calculate real wages using seasonally adjusted chained CPI. Source: BLS and author's calculations.
While the fall in real wages during 2022-23 may explain some of the downturn, I suspect another part is that manufacturing job growth has not always been located where manufacturing was previously concentrated. While this may be seen at the county level, I would check at the state level. Figure 3 shows the annual growth rate of manufacturing employment by state compared with the share of manufacturing employment in the previous year.
image 3: The annual growth rate of manufacturing employment as of March 2024 and the proportion of manufacturing in non-farm employment in March 2023. Washington, D.C. omitted. The red dashed line represents the national average. Source BLS and author's calculations.
Note that manufacturing employment declined in manufacturing-heavy states such as Wisconsin, Michigan, and Indiana, while manufacturing employment declined in states with little manufacturing (New Mexico, Nevada, and, to a lesser extent, Western Australia). The number of industrial employment increased rapidly.
This is of course an ongoing process, and manufacturing has moved away from the Great Lakes region to the South and elsewhere. However, I think it is interesting to consider this process during a period when manufacturing employment was relatively stable but employment was redistributed.
