Manufacturing Job Loss in U.S. Deindustrialized Regions—Its Consequences and Implications for the Future

Abstract

The loss of manufacturing jobs in the United States has been widely noted in the popular press as well as in public policy debate. We examine several of the most prominently made assertions about manufacturing decline and its consequences for deindustrializing metropolitan areas and find not all of them supported by the data. In particular, we find that, given their industrial structure some of these areas performed better than expected, that long-term economic distress was not inevitable, that manufacturing remains an important component in many metropolitan area economies, and that much of the growth in the service sector is based upon or complementary to the existence of manufacturing. We also find that low growth in these deindustrialized areas was due more to these regions losing their market share of individual industries to other U.S. regions than it was to the areas having an adverse industrial structure, that economies that were more diversified in 1980 did not have greater employment growth from 1980-2011 than those that were less diverse, and that declines in manufacturing did result in a movement of jobs from relatively high-wage to relatively low-wage industries and thus a decline in earnings per jobs.