Why Factory Jobs Are Shrinking Everywhere

A report from the Boston Consulting Group last week suggested the U.S. had become the second-most-competitive manufacturing location among the 25 largest manufacturing exporters worldwide. While that news is welcome, most of the lost U.S. manufacturing jobs in recent decades aren’t coming back. In 1970, more than a quarter of U.S. employees worked in manufacturing. By 2010, only one in 10 did.

The growth in imports from China had a role in that decline–contributing, perhaps, to as much as one-quarter of the employment drop-off from 1991 to 2007, according to an analysis by David Autor and colleagues at the Massachusetts Institute of Technology. But the U.S. jobs slide began well before China’s rise as a manufacturing power. And manufacturing employment is falling almost everywhere, including in China. The phenomenon is driven by technology, and there’s reason to think developing countries are going to follow a different path to wealth than the U.S. did—one that involves a lot more jobs in the services sector.