November 28, 2016
As a prelude to CEPR’s upcoming Blue-Collar Jobs Tracker, this post provides an overview of manufacturing jobs in Illinois, Indiana, Michigan, Minnesota, Ohio, and Pennsylvania from 1990 until the present. In all these states the amount of manufacturing jobs has declined since 1990.
However, losses were more severe in some states than in others. Over a third of manufacturing jobs were lost in Pennsylvania, Michigan and Ohio. In Minnesota and Indiana the losses were somewhat lower, with a 7 percent and 14 percent decline, respectively.
The overall trend in the number of manufacturing jobs in Illinois, Indiana, Michigan, Minnesota, Ohio, and Pennsylvania is illustrated below. The figure shows a 12-month moving average of the number of people employed in the manufacturing sector.
In the recession of the early 1990s, some jobs were lost, but were mostly recovered during the period of strong economic growth that followed in the late 1990s. In Indiana, Michigan, and Minnesota, more people were employed in manufacturing in 2000 than in 1990. Only Pennsylvania suffered a substantial loss of manufacturing jobs in this decade, with a decline of 9 percent.
The accelerated decline in domestic manufacturing jobs starts after 2000 and coincides with the sharp increase of the U.S. trade deficit. By 2008, before the onset of the Great Recession, the number of people employed in the manufacturing sector fell significantly. Michigan was hit the hardest, with a loss of over 323,000 jobs, a loss of more than a third of the employment in the sector. Between 2000 and 2008 employment in the manufacturing sector decreased by 28 percent in Ohio, 25 percent in Illinois and Pennsylvania, 22 percent in Indiana, and 15 percent in Minnesota.
Then, the Great Recession hit the manufacturing sector hard, with Ohio losing 110,000 jobs, Michigan 108,000, Illinois 81,000, Indiana 80,000, Pennsylvania 70,000, and Minnesota 36,000 between 2008 and 2009.
In the recovery, manufacturing job numbers posted modest recoveries, but have not come close to 2000 levels. Michigan is the only state that even surpassed the pre-recession level of employment in manufacturing. However, it is also the state that lost the most jobs previous to the recession, and the current employment level is lower than it was in 2000 by almost 300,000 jobs or 34 percent.
While the modest upticks in manufacturing jobs from the recent recovery might continue, this will not go far towards replacing the jobs lost in the last 15 years.
