Stagnant manufacturing employment

Good news in the latest report on employment from the Bureau of Labor Statistics. 2015 saw the most net new jobs since the boom of the late 1990s. 2.65 million jobs were added in 2015. Of those 35,000 were in manufacturing. You read that right: manufacturing contributed less than one tenth of one percent of the job gains in America last year.

So much for the much hyped American manufacturing renaissance. At the end of 2015 manufacturing employed 12.3 million out of 143.2 million American workers. That is 8.6% of American jobs. This reality is a continuation of the long term trend of the American economy––largely because of the mega forces of globalization and technology––becoming a service providing, rather than goods producing, economy. (You can find details on job growth from December 2104 to December 2015 by industry here.)

A recent post by St Louis Fed economist Maximiliano Dvorkin entitled Jobs Involving Routine Tasks Aren’t Growing explores what kind of occupations are growing. Dvorkin divides the economy into four occupational clusters:

  • Nonroutine cognitive occupations, which include management and professional occupations
  • Nonroutine manual occupations, which include service occupations related to assisting or caring for others
  • Routine cognitive, which include sales and office occupations
  • Routine manual, which include construction, transportation, production and repair occupations

He details employment changes for the four clusters between 1983 and 2013. He summarizes his findings this way: “The picture is clear: Employment in nonroutine occupations—both cognitive and manual—has been increasing steadily for several decades. Employment in routine occupations, however, has been mostly stagnant.”

In 1983 nonroutine cognitive, routine cognitive and routine manual occupations all had about the same number of employees. Thirty years later nonroutine cognitive occupations employment had nearly doubled, while the two categories of routine occupations had stayed largely unchanged. Nonroutine manual occupations in 1983 were around one half the other three occupational categories. In 2013 they were close to the two routine occupational categories.

The best book I have read on the future of jobs is still Daniel Pink’s 2005 A Whole New Mind. Pink explains that routine/left brain work is the easiest to automate and outsource. And that what isn’t are what he calls high concept and high touch. He writes “we’re progressing yet again––to a society of creators and empathizers, of pattern recognizers and meaning makers”. A decade later the Dvorkin data provides evidence that Pink’s analysis of the kind of jobs that will be in demand in America going forward is quite accurate.


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