Why old-fashioned manufacturing jobs won’t return to the West

By S.W.

MANUFACTURING has a powerful hold over politicians and policymakers in the rich world. Donald Trump, among others, wants to bring the job of making things back to America from the low-cost countries to which it has emigrated. Manufacturing is worthy of political attention. Manufacturers are more likely to be exporters than other types of businesses and those tend to be more productive than non-exporting firms. But when politicians talk about manufacturing it tends to be in terms of the production line: assembling parts into cars, washing machines or aircraft, which adds less value than it once did. It is the processes that accompany assembly—design, supply-chain management, servicing—that today bring the value. Manufacturing, and jobs in manufacturing, have changed in ways that mean that the old jobs will never return to the rich world.

Because of these changes, working out how many people are employed in manufacturing is tricky. Between the 1840s and the 1960s in Britain, manufacturing’s share of employment hovered at around a third; today official data show around one in ten workers is involved in manufacturing. In the late 1940s in America, it accounted for one in three non-farm jobs. Today’s figure is just one in 11. But the way official figures are compiled means that manufacturing’s decline has been exaggerated. Some processes that used to be tightly held together are now strung out across the world. Manufacturing companies increasingly bring in other firms to take care of things like marketing or accounting. Because statisticians generally categorise companies according to their largest block of employees, this can make the loss of manufacturing jobs look bigger than it is.