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From Site Selection magazine, July 2019

The Way We Were:
Lessons from Manufacturing's Front Lines

Shifting map of America’s factory belt highlights migration pattern of good jobs.

Welding is an occupation in high demand in Northeast Wisconsin. Without programs like NEWMA, many employers in the region would be facing critical worker shortages in this key field.
Photo courtesy of NEWMA


America’s factory belt isn’t just shrinking in size. It’s becoming ever more clustered in a handful of Midwestern and Southeastern states.

Those are among the principal findings in a landmark study published June 25 by the Georgetown University Center on Education and the Workforce (CEW) in partnership with JPMorgan Chase & Co. “The Way We Were: The Changing Geography of U.S. Manufacturing from 1940 to 2016” details how the industry migrated from the Northeast to hubs in the Midwest and Southeast by the early 2000s.

Decades of major declines in employment in favor of large increases in productivity have produced an America in which only 16 states employ at least 10% of their workers in manufacturing and just two states, Indiana and Wisconsin, where manufacturing remains the largest source of employment.

Despite the fact that manufacturing is the largest employer in only two states, it still is the top provider of good jobs for workers without a bachelor’s degree in 35 states.” 
— Anthony P. Carnevale, Director, CEW

From 1947 to 2016, manufacturing declined by 3 million jobs in America while manufacturing output grew by $4 trillion, according to the CEW report. These dramatic changes were especially felt in the Northeast, Midwest and Southeast.

In 1940, 23% of American workers were employed in manufacturing. Industry employment was concentrated mainly in 15 Northeastern, Mid-Atlantic and Great Lakes states and in cities like Gary, Detroit, Cleveland, Buffalo, Pittsburgh, Newark and Baltimore. By 2000, however, the share of workers in manufacturing had dipped to less than 15%, and by 2016 it had fallen to 10%. Meanwhile, jobs in the services sector increased from 21% of the workforce to 55% between 1940 and 2016.

“As the economy shifted from manufacturing to services during the 20th century, the geography of manufacturing shifted to the Southeastern and Central states, where labor costs were lower and subsidies were more attractive to industry,” the report states. “As of 2000, it was the largest employer in 18 states, including seven Southeastern states: Alabama, Arkansas, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. However, by 2016, the industry had fallen from the ranks as a top employer.”

3 Trends Costing U.S. Factory Jobs

Three connected trends accounted for the bulk of factory job losses, according to CEW: a decline in share of economic output as the role of services in the U.S. economy grew; a decline in the share of the workforce as the industry adopted automation and encountered more intense international competition; and a rise in output per worker that enabled manufacturing to increase its overall output. Increased foreign trade and offshoring also contributed to steep manufacturing job losses, particularly after 2000, the report noted.

“Despite the fact that manufacturing is the largest employer in only two states, it still is the top provider of good jobs for workers without a bachelor’s degree in 35 states,” said Anthony P. Carnevale, lead author of the report and CEW director. Moreover, the report adds, the “continued industrial strength in Indiana and Wisconsin reflects the enduring legacy of manufacturing in the Midwest.”

Neil Ridley
Neil Ridley is state initiative director for CEW.

According to the National Association of Manufacturers, Indiana leads all states with 17% of its workers employed in manufacturing jobs, followed by Wisconsin with 16%. The rest of the top five includes Michigan at 13.8%, Iowa at 13.5% and Alabama at 13.3%. By contrast, the District of Columbia has the lowest share of workers in factory jobs, at just 0.2%. The rest of the bottom five includes Hawaii at 2.1%, New Mexico at 3.1%, Wyoming at 3.4% and Nevada at 3.4%.

According to the Wisconsin Policy Forum, the Badger State had 490,000 manufacturing workers as of November 2018, up 19,000 jobs from November 2017. Indiana, meanwhile, had 536,000 manufacturing jobs in 2018, according to the Indiana Manufacturers Association.

Neil Ridley, state initiative director for CEW, says there are concrete steps that states and communities can take to boost manufacturing employment. “One approach that some states are taking is to encourage partnerships between industry and technical colleges on the ground in those manufacturing cluster areas,” he says. “Programs where workers can earn community college degrees and technical certificates while working with a manufacturing firm can be a win-win for the worker and the firm and position the workforce for better jobs. Those kinds of initiatives are very important. Kentucky is a good example. They have excellent partnerships between educational institutions and Toyota, among other employers.”

Tricia Braun
Tricia Braun is deputy secretary of Wisconsin Economic Development Corp.

Tricia Braun, deputy secretary for the Wisconsin Economic Development Corp., says Wisconsin has bucked the nationwide trend of manufacturing job losses by focusing on the three T’s: talent, training and technical colleges. “We incorporate higher education into our workforce development to create a cohesive plan to build our pipeline of talent,” she says. “We’re also working to attract talent to Wisconsin. We have run ads in Chicago encouraging young adults to pursue rewarding careers up north. We’ve also focused on recruiting alumni and transitioning veterans. We are creating best practices that other states are now wanting to follow.”

Forecast: U.S. to Lose Another 253K Jobs

The report on manufacturing job migration patterns came just two weeks after CEW released a related study, “Upskilling and Downsizing in American Manufacturing,” which found that workers with postsecondary education now outnumber workers with a high school diploma or less in the industry. The key finding was a dramatic one: “Workers with associate’s degrees were the only group without a bachelor’s degree to see net gains in good manufacturing jobs — about 250,000 — between 1991 and 2016.”

The report also found that “about 10% of manufacturing workers have an industry certificate or license, and those with one of these credentials are more likely to have a good job than those who do not have one.”

The future may not be so bright, though. The report cautioned that “manufacturing is not expected to be a major job machine in the future, with employment expected to decline 2% — or by 253,000 net jobs — as of 2027.”

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Data, Inc. He has been with Conway Data for 22 years and serves as a writer and editor for both Site Selection and the company's Custom Content publishing division. His Twitter handle is @RonStarner.


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