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Understanding The Decline Of U.S. Manufacturing Employment, Susan N. Houseman

Upjohn Institute Working Papers

U.S. manufacturing experienced a precipitous and historically unprecedented decline in employment in the 2000s. Many economists and other analysts—pointing to decades of statistics showing that manufacturing real (inflation-adjusted) output growth has largely kept pace with private sector real output growth, that productivity growth has been much higher, and that the sector’s share of aggregate employment has been declining—argue that manufacturing’s job losses are largely the result of productivity growth (assumed to reflect automation) and are part of a long-term trend. Since the 1980s, however, the apparently robust growth in manufacturing real output and productivity have been driven by a relatively …