Is the Recession Really the Cause of Lost Manufacturing Jobs?

When the recession hit, many people blamed the collapse of the auto industry, the financial sector, and the mortgage meltdown for the loss of manufacturing jobs. These things contributed, but the damage was already done before the collapse. Aside from economists in the know, few people understand that the losses in manufacturing may have little to do with the recession.

The Real Catalysts

Economists and industry experts say that the decline in the manufacturing labor force began in the late 1990’s. In fact, 1997 was the year to show the last real growth in the manufacturing sector. There have been an estimated 6 million jobs lost since 1997 in the manufacturing industry. The decline of the auto industry was the icing on the proverbial cake, not the cause. The real change-agents have come in several different forms:

Technological advances

Advances in factory automation technology have reshaped the industry. They have both eliminated and created jobs. In most cases this has meant a decrease in overall jobs but an increase in demmand for skilled labor.

Alternative Materials

A vital portion of the Alternative Energy and Green movements are alternative materials that have made the old standards not such a stable choice. The switch from steel to magnesium alloys, for example, caused steel mills to see a decrease in production and the workforce went with it. As with other technological advances, these losses were offset by new investment in producers of magnesium alloy and the training and infrastructure that came with it.

Green manufacturing

Green Manufacturing is synonymous with Lean Manufacturing. While Green Manufacturing brings many environmental benefits and Green Jobs, it has also naturally led to a reduction in workforces in some manufacturing sectors.


Companies have been shipping production overseas for decades, causing a decline in US-based manufacturing jobs. Today, however, more firms are finding reasons to stay within U.S. borders. We’ll look at this a little more thoroughly in an upcoming post.

Cause for Celebration

The Bureau of Labor Statistics, along with economic analysts writing for the Wall Street Journal, Atlantic Monthly, New Manufacturing and more have all stated that manufacturing jobs will grow by 2020. In fact, growth in 2010 alone was the largest single year for growth since 1997. Now that is cause for celebration.

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