Employment in the manufacturing sector is up compared to 3 years ago. Why so much dissatisfaction?
Figure 1: Employment in the manufacturing sector, in thousands, sa (blue). Source: BLS.
Year-over-year through March, manufacturing employment is up 1.6% (in logarithmic terms). Real wages are also on the rise, although only recently recovered to their 2020M11 levels (but above pre-pandemic levels), while work hours are down from record 2022M10 levels .
Figure 2: Hourly earnings in manufacturing in 2023 dollars (blue, left scale) and total hours worked in manufacturing (beige, right scale), for both production and non-supervisory workers. Real wage calculated using the seasonally adjusted chained CPI by the author using X-13. Source: BLS and author’s calculations.
Although real wage erosion in 2022-23 could partly explain this sluggishness, I suspect that manufacturing employment growth is not always where manufacturing was previously concentrated. While this can probably be seen at the county level, I will look at the state level. Figure 3 shows annual manufacturing employment growth by state compared to the manufacturing employment share a year ago.
Figure 3: Annual growth in manufacturing employment through March 2024 relative to manufacturing’s share of nonfarm payroll employment in March 2023. Nearest neighbor adjustment (window = 0.6) (tan line). Washington DC omitted. Red dotted lines at national averages. BLS source, and author’s calculations.
Note that manufacturing-intensive states like WI, MI, and IN are experiencing reduced manufacturing employment, while those with weak manufacturing (NM, NV, and to a lesser extent, WA) are experiencing rapid increases.
This is, of course, an ongoing process in which manufacturing has moved from the Great Lakes region to the South and elsewhere. However, I think it is interesting to examine this process in a period where manufacturing employment has been relatively constant, and yet there has been a redistribution of employment.
