Reasons for the Decline of Manufacturing-based jobs in the U.S

Reasons for the Decline of Manufacturing-based jobs in the U.S

In recent times, the U.S. economy is turning into a service-based economy rather than a manufacturing-based economy. The percentages of people employed in service-based jobs are increasing, and the rates of people employed in manufacturing-based jobs are decreasing. However, this trend leads to a false conclusion that service-based jobs are more important to a nation's economy compared to manufacturing-based jobs.

There are basically two main reasons for the decline of manufacturing-based jobs in the U.S. It is mentioned below: 
1. Automation in production means fewer people are needed to accomplish a task. Moreover, automation and sophisticated machinery increase productivity and output, decreasing the number of people required to finish the same amount of job. 

2. Outsourcing manufacturing tasks to countries with low labor costs transfers the manufacturing jobs to another country.

However, when the companies outsource manufacturing jobs to low-cost countries, it unknowingly also transfers service jobs to those countries. For example, jobs like machine maintenance or packing of finished goods are also assigned to those countries. Thus outsourcing leads to transferring the manufacturing Jobs of a nation to another nation but inevitably moves the service jobs.


There were 12.7 million Americans in manufacturing jobs. This number, while steadily improving, is up from significantly from the same period in 2021. Manufacturing employees earned an average of 92,832 a year annually, on average, including pay and benefits.

U.S. manufacturing workers deserve this pay. They are the most productive in the world. That's due to the increased use of computers and robotics. They also reduced the number of jobs by replacing workers. Yet, 89% of manufacturers are leaving jobs unfilled. They can't find qualified applicants, according to a 2018 Deloitte Institute report. The skills gap could leave 2.4 million vacant jobs between 2018 and 2028. That could cost the industry $2.5 trillion by 2028.

Manufacturers also face 2.69 million jobs to be vacated by retirees. Another 1.96 million are opening up due to growth in the industry. The Deloitte report found that manufacturers need to fill 4.6 million jobs between 2018 and 2028.

Trends in Manufacturing Jobs

Manufacturing processes are changing, and so are the job skills that are needed. Manufacturers are always searching for more cost-effective ways of producing their goods. That's why, even though the number of jobs is projected to decline, the jobs that remain are likely to be higher paid. But they will require education and training to acquire the skills needed.

That's for two reasons. First, the demand for manufactured products is growing from emerging markets like India and China. McKinsey & Company ​estimated that this could almost triple to $30 trillion by 2025. These countries would demand 70% of global manufactured goods.

How will this demand change manufacturing jobs? Companies will have to offer products specific to the needs of these very diverse markets. As a result, customer service jobs will become more important to manufacturers.

Second, manufacturers are adopting very sophisticated technology to both meet these specialized needs and to lower costs. Here are six examples:
  • Nanotechnology is creating a new era of microelectronics.
  • Lightweight steel, aluminum, and carbon fibers are making cars lighter and more fuel-efficient.
  • Bio-engineering creates more customized pharmaceuticals.
  • 3D printing creates prototypes by combining small particles rather than by casting or stamping, but it is being used more and more to manufacture specialized aerospace components and human organ replacements.
  • Robots are becoming more sophisticated.
  • Big data is being used to analyze customer trends and guide product development.


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