The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy.
The fall of employment in the manufacturing
Before examining the factors that have led to job losses, the authors discuss two periods that saw manufacturing
employment fall sharply—1980 to 2000 and 2000 to 2017. Two million jobs were lost between 1980 and 2000 and
5.5 million jobs were lost between 2000 and 2017. The authors note that these losses have affected the
employment rates of prime age workers, finding that a “10 percentage point decline in the local manufacturing
share reduced local employment rates by 3.7 percentage points for prime age men and 2.7 percentage points for
prime age women.”
What is most responsible for the manufacturing job losses? Rising trade with China is often cited as a possible
culprit. But competition from China only accounts for about a fourth of the decline in manufacturing during the
2000s. This theory is further eroded by the fact that local markets that did not compete with Chinese imports also
saw employment declines.
A skills mismatch—the gap between the skills workers have and the skills employers need—has also contributed
to the decline of manufacturing employment. Using data from the Job Opening and Labor Turnover Survey, the
authors saw job opening rates in the manufacturing sector nearly double, from 1.8 percent in 2001 to 3.1 percent
in 2017. The construction industry—which generally employs low-skilled labor—only saw an increase of 0.17
percent over that same period (from 2.53 percent to 2.69 percent). The authors suggest this increase in job
openings is due to a skills mismatch, causing job vacancies to remain unfilled for longer periods.
The decline of manufacturing is at least partly the result of a decline in cross-regional migration. In the past,
individuals would move to take on a new job, causing the local population to change. Between 1980 and 1990, a
1.0 percentage point change in manufacturing share created a 4.0 percent change in population, while from
2000 to 2017, a 1.0 percentage point change in manufacturing s