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Issue 1463 April 15, 2012
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Chicago and Detroit lost the most manufacturing jobs in the decade from 1995 to 2005

Reasons Behind U.S. Job Losses Perplex Researchers, Social Scientists

1,000 Workers of the 1970s Replaced by 177 Today: A National Dilemma

May 13, 2012       Leave A Comment
By: Dave Rogers

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The United States has endured unprecedented erosion in manufacturing, says a Washington "think tank," confirming what we in the Saginaw Valley have experienced in spades.

"As a share of the economy, we've seen a 32 percent decline in manufacturing jobs, worse than what we experienced in the Great Depression," states the Information Technology and Innovation Foundation (ITIF).

Chicago and Detroit lost the most manufacturing jobs in the decade from 1995 to 2005 (over 100,000 jobs each), while Canton, OH, and Flint, MI, lost the greatest shares of manufacturing employment.

Flint official Joe Conroy, testifying in 2008 before Congress on the need for a gambling casino for economic revitalization, stated: "Once known as a booming center of automobile manufacturing, with as many as 14 General Motors related auto plants, the city of Flint, in recent years, has seen its economic base decimated by the loss of nearly 85,000 manufacturing jobs since the 1980s, as General Motors closed plants and laid off workers in order to compete in the emerging global economy."

ITIF finds in a report released recently that this employment decline is not, as so many presume, about superior productivity leading to fewer jobs. It is about the loss of U.S. international competitiveness leading to reduced output and fewer jobs. Such a decline was not inevitable and it is recoverable.



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The Brookings Institution estimated that between 1995 and 2005 the United States lost more than 3 million manufacturing jobs. Nearly all of this job loss occurred during the last five years, and 37.5 percent of the loss occurred in the seven Great Lakes states.

Michigan lost the most manufacturing jobs between 2000 and 2005 (nearly 218,000), followed by Ohio, Illinois, and Pennsylvania.

Despite these job losses, manufacturing remains a major driver of the nation's economy and the economy of the Great Lakes region, according to Brookings.

The great debate about jobs may well determine the U.S. Presidential election of 2012.

But the argument is being fought on very shaky grounds.

The most startling statistic is one that asserts 177 workers now produce the same as 1,000 workers of 30 years ago.

That's the "productivity" argument.

Others argue that high taxes and regulations in the U.S. have driven many jobs offshore or China has taken over our manufacturing, displacing a great percentage of our workers.

But nobody really knows what will bring back American jobs or exactly what is causing the anemic employment market.

If Willard "Mitt" Romney is elected based on his promise to restore jobs, many analysts reckon that he may not be able to deliver. Global trends may dictate a continued decline no matter who is in the White House.

President Barack Obama is taking severe hits for not being able to ramp up the economy to restore jobs and reach a 4 percent unemployment rate, considered minimally acceptable to the business community.

So called conservatives and liberals are lined up on opposing sides with very little cross-over.

"We can't afford more public sector jobs," say some conservatives like TV commentator Joe Scarborough, a former Republican Member of Congress. About 600,000 public jobs reportedly have been eliminated in recent years by the budget-cutting philosophies of the right wing Tea Party Revolution.

"Jobs are jobs no matter who the employer is," say those on the other side, call them liberals, if you will, or traditionalists.

A new study by the ITIF, agruing against the idea of productivity-driven job losses, states:

"Government statistics significantly overstate the change in U.S. manufacturing output, and most economists and pundits do not extend their analysis beyond one macro-level number (change in real manufacturing value added relative to GDP).

"But the conventional wisdom that U.S. manufacturing job loss is simply a result of productivity-driven restructuring (akin to how U.S. agriculture lost jobs but is still healthy) is wrong, or at least not the whole story.

This report contends that the loss of U.S. manufacturing jobs is a function of slow growth in output (and, in most sectors, actual loss of output) caused by a steep increase in the manufactured goods trade deficit.

ITIF is a Washington, D.C.-based think tank that describes itself as "at the cutting edge of designing innovation policies and documenting how advances in technology are creating new economic opportunities to boost economic growth and improve quality of life in the United States and around the world." Among honorary co-chairs are Utah Sen. Orrin Hatch and California Congressman Darrell Issa, noted Republican conservatives.

In response to an initiative to promote innovation and competitiveness in manufacturing President Obama has announced, ITIF President Rob Atkinson made the following statement:

"Finally, at the very highest levels of government there is recognition that manufacturing matters and an acknowledgement that our public policies have been failing this critical sector.

"The National Network for Manufacturing Innovation is one of the most important steps this or any Administration has taken in recent years to revitalize American manufacturing and it is urgently needed.

"We hope the 15 Institutes for National Manufacturing Innovation the President envisions will help harness America's inventive capacity and turn ideas into new products and enhance U.S. competitiveness. Germany, Japan, Korea, and other countries have demonstrated the effectiveness of similar approaches for creating and sustaining dynamic manufacturing sectors while also maintaining high wages and global market share.

"The future of manufacturing transcends party identification. We hope this is an initiative that can be implemented as soon as possible." ###

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Agree? or Disagree?


Dave Rogers

Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at carraroe@aol.com)

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