New manufacturing study contradicts Trump
Contrary to prevailing opinion, America has lost millions of manufacturing jobs over the years, but few of the losses are attributable to outsourcing, according to a new report from Ball State University.
The 2015 Manufacturing and Logistics Report Card, published by Ball State’s Center for Business and Economic Research (CBER) and Conexus Indiana, found that about 87% of such cuts are due to productivity gains, including better supply chains, more capital investment, and advanced technology such as robots. It also found only 4% of manufacturing jobs have been lost to international trade through outsourcing since 2000.
Michael Hicks, director of CBER and the George and Frances Ball Distinguished Professor of Economics at Ball State, says there are major misunderstandings among the public and the media about the manufacturing sector. “The U.S. manufacturing base is not in decline, and we have recovered from the recession,” Hicks states. “Nor are jobs being outsourced because American manufacturing can’t compete internationally.
“Moreover new jobs in manufacturing pay well above the average wage.”
The study also found that since the end of the recession, the economy has added 750,000 manufacturing jobs, and the biggest job losses occurred in low-productivity sectors with low transportation costs. The report claims that retiring baby boomers are leaving behind good, well-paying jobs in those sectors, and younger workers are filling those jobs at an unprecedented rate.
In addition, recent new hire salaries averaged $20.06 per hour — almost $42,000 a year, the report says. As millennials move into the workforce, wage gaps between new and existing jobs are primarily age- and tenure-related.
The study notes that the Great Recession had lost its stranglehold by 2014, when U.S. manufacturers attained record levels of production.