You can hardly be blamed if you think U.S. manufacturing is in a precipitous free fall. The news has been bleak in recent months with the sector contracting again in October.
The latest numbers have prompted calls of a “manufacturing recession” and another round of “we don’t make anything in this country anymore.”
The former is likely true, though there is reason to believe it won’t last long. As for not making anything, that’s false. Many of you already know that. Still, the misconception won’t die.
Manufacturing has made up a fairly consistent slice of the overall economy dating back to the late 1940s. The sector accounts for a little more than 11 percent of the country’s gross domestic product, the total value of goods and services produced. Adjusted for pricing, that’s squarely within the 11 percent to 14 percent range it’s been in for decades, according to data from the Federal Reserve Bank of St. Louis.
So why so much gloom?
It’s doesn’t help that manufacturing’s slice of the overall economy has declined a bit in recent years. But the bigger factor is jobs. While we still make things, we don’t need nearly as many workers. The number of manufacturing jobs has declined from a peak of about 20 million in the 1970s to about 12.8 million today.
Put another way, manufacturing employed more than 1 out of every 4 working Americans in 1970. Today, it’s closer to 1 in 12. The rise in automation helps explain some of the decline, as do jobs moving overseas. A big increase in the number of service-sector jobs over the past three decades has also eaten up a bigger slice of the jobs pie, effectively elbowing out other sectors.
Florida has never relied as much on manufacturing as other states, especially those in the Steel Belt along the Great Lakes. But the trends are similar. The state’s 20,600 manufacturing businesses still make everything from yachts to food flavorings to fire suppression equipment. They just don’t need as many workers as a few decades ago.
In 1990, manufacturing employed 520,000 Floridians. If the sector had grown at the same rate as the state’s population, the number would have risen to 830,000 today. Instead, the numbers declined. Only 381,000 worked in manufacturing in September, the state reported.
That’s just a little more than 4 percent of Florida’s total non-farm workforce, down from nearly 10 percent in 1990. For context, construction employs 6.3 percent, government 12.5 percent. The state’s largest job sector — trade transportation and utilities — employs 20 percent of working Floridians.
Pinellas County remains one of the state’s leaders with more than 30,000 manufacturing jobs, many in the medical device field, according to the Florida Department of Economic Opportunity. Hillsborough has 27,000 in everything from aviation to pharmaceuticals.
The decline in manufacturing jobs hurts in several ways. The sector employs a higher share of workers without a college degree, an important factor as the state struggles to maintain enough middle-class jobs.
The sector also pays better, so a decline in the number of jobs hurts more. The average annual manufacturing salary last year was $61,735, the Florida Bureau of Workforce Statistics reported. That’s more than twice as much as the average wage for the leisure and hospitably sector. It’s also more than construction or government. It’s even more than education and health services.
Manufacturing jobs have taken a big hit in recent decades. But it’s not because we don’t make things anymore.