Manufacturing Job Market
A seemingly contradictory state of affairs characterizes today’s U.S. manufacturing industry. The industry itself has remained strong and profitable, but manufacturing jobs have steadily declined over the past several years. If the manufacturing industry is truly flourishing, why is it so difficult for U.S. manufacturing workers to find suitable jobs?
Recession recovery…or lack thereof
According to Robert E. Scott of the Economic Policy Institute, recovery from the economic recession that began in 2007 has remained slow for the manufacturing and construction industries. Manufacturing job availability and industry revenue have still not reached their pre-2007 levels, which means that even highly qualified workers may be finding it difficult to secure paid work.
Scott notes that during periods of economic abundance, jobs in the manufacturing industry tend to pay well, especially for professionals without advanced education. However, during economic slumps, the lack of job availability can have a negative impact on the workforce, even as the industry continues to strengthen.
Where are all the jobs really going?
Reporting for IndustryWeek, executive editor Steve Minter reveals that the disconnect between industry strength and job availability might boil down to the increasing prevalence of a “sector-driven economy.” In other words, while one sector of the manufacturing industry might strengthen, another can easily lose economic viability. Minter uses the energy exploration sector as a key example of a market that suffers from declining interest.
If poorly performing sectors typically represent a large percentage of employment contracts in manufacturing, the industry would seem to lose jobs overall. However, other factors can also come into play.
The lingering results of offshore outsourcing
The global marketplace is partly responsible for the lack of manufacturing jobs available in the United States. Consider this example: China entered the European Union (EU) in 2001, and the Economic Policy Institute (EPI) estimates that in 2011, related job displacement in the United States resulted in a $37 billion economic loss.
Furthermore, the EPI reports that “we export low-wage products to China (such as agricultural products) and import high-wage products (such as computer and electronic products).” In other words, U.S. workers miss out on lucrative employment opportunities at home because the goods that the U.S. exports to China and other countries typically constitute products that are inexpensive to produce.
The good news? Outsourcing is being phased out
While trade between the United States and China has met considerable hurdles over the last few years, the United States continues to import products from other countries. This results in growth for the businesses that operate in the manufacturing industry, but it doesn’t aid in job creation, especially for blue-collar workers who might run machinery, assemble products, and hold other factory-floor jobs.
Increasing wages in foreign countries and the rising costs of global shipping, however, have begun to dissuade companies from outsourcing their manufacturing needs. So-called “re-shoring” has become a common topic of conversation in the industry, and although outsourcing has not completely evaporated, increasing rates of domestic manufacturing could improve job prospects for professionals in this industry as time passes.
Impacts of the technology takeover
Jobs in the manufacturing industry have also suffered at the hands of technology. As machine-to-machine communication, the Internet of Things, and other technological advancements continue to develop, the need for manufacturing employees declines.
On one hand, technology has the power to actually create jobs. For instance, someone has to build all of those machines that run with near-artificial intelligence. However, as mentioned above, the United States outsources many of those more lucrative manufacturing jobs to other countries, which means less job creation domestically.
The ultimate divide between industry strength and job availability
Still, this increase in advanced technology can help to strengthen the U.S. manufacturing industry overall. Using machines and computer programs to automate parts of the manufacturing process can make task completion faster and more accurate. There are fewer opportunities for human error, which can improve customer service, vendor relations, and other facets of the industry.
In fact, manufacturing companies must invest in the latest technology if they want to remain relevant. They become more efficient when they take advantage of available technology, which allows them to compete effectively with other businesses. The advantages created by all of this new technology certainly seem to outweigh the cons of decreased job opportunities, creating an interesting dilemma for proponents of the U.S. manufacturing sector.
In other words, the manufacturing industry has created a conundrum in terms of the relationship between job availability and industry strength. No single event or circumstance is to blame for the disparity; instead, it’s the result of many contributing factors. However, re-shoring trends and technological advancements point to a bright future for the industry, which can only mean good things for the U.S. economy.
What’s your opinion on the future of the U.S. manufacturing sector? Heard of any innovative solutions or stories related to this dilemma? Share in the comments below. And if you’re looking for a way to optimize your cash flow management and acquire the funds you need to help your business grow, contact MP Star Financial today.