U.S. manufacturing comeback: Nice story...if only it were true
Is that nice story about the return of "Made in America" simply made-up?
The U.S. has added some 520,000 manufacturing jobs over the past three years. That’s led many analysts to declare an American manufacturing renaissance. But according to a new report from the Information Technology and Innovation Foundation, that's not really the case.
The report, titled “The Myth of America’s Manufacturing Renaissance: The Real State of U.S. Manufacturing” argues that while the U.S. economy added those more than half-million jobs, that's compared to the 2.5 million lost in the Great Recession. The Information Technology and Innovation Foundation is a non-partisan, non-profit think tank based in Washington, D.C.
“I wouldn’t say it’s a myth,” says Yahoo Finance Senior Columnist Michael Santoli, "[But] it’s probably been exaggerated at least in terms of jobs."
The report contradicts a popular narrative among analysts and the media that U.S. manufacturing has seen a broad-based recovery and that the boom in U.S. oil and gas production continues to fuel it. Boston Consulting Group has been leading the drumbeat for a few years. But the authors of the report say, “The lion's share of growth that has occurred appears to have been driven by a cyclical, rather than structural, recovery, and as such may represent only a temporary trend."
The U.S. is no longer losing jobs in the sector, but as Yahoo Finance editor-in-chief Aaron Task and Santoli discuss in the attached video, the economy will likely never regain all the jobs since the 1980s. However, there is evidence of growing investment in the sector because of low oil and natural gas costs. Dow Chemical is building a new plant in Texas which will open in 2017. Airbus will open its first production facility in North America later this year. Companies like Siemens have rolled out high-tech apprenticeship programs for manufacturing plants in the U.S. to train young Americans for new jobs in the industry.
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“It‘s too anecdotal,” says Santoli, and focused on the idea that it is all “going to come back.” He says the industry is changing. “It’s not really about coming back. It might be about new industries building things here.” He points to the auto industry and in particular Tesla building cars in the U.S.
It's not just about manufacturing changing, it's about the U.S. labor force on the whole changing. The collective fascination with U.S. manufacturing is "nostalgia for good middle class jobs you didn’t need a college education for," says Santoli. "Is manufacturing better than a UPS driver job or a solar panel installer jobs?”
“We’re not going to start manufacturing t-shirts in North Carolina again. We’re not going to start making small electronics in Texas again,” he says. “That stuff is gone. It has to be something new.”
Yahoo Finance did reached out to Boston Consulting Group for comment on the new report. We did not hear back at the time this blog was published.
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