Manufacturing employment was generally on a downward trend between 1980 and 2009, with a precipitous decline between 2000 and 2009. Compared to the peak of 19.5 million in 1979, manufacturing employment had declined approximately 41% by 2009. Manufacturing employment declined from 17.3 million in January 2000 to a low of 11.5 million in December 2009, a drop of 33% over the decade. Manufacturing employment steadily (but only slightly) rose with the economic expansion of the last decade, ending 2019 at 12.8 million. Manufacturing employment was relatively unchanged in 2019, despite tariffs and corporate tax breaks from the 2018 tax bill that encouraged investment in manufacturing employment. Even with the growth in manufacturing employment following the 2008 financial crisis, the manufacturing sector ended the decade with approximately 1 million fewer employees than before the financial crisis. The economic decline in early 2020 dropped manufacturing employment over 10% from 12.8 million in January to a low of 11.4 million in April, but manufacturing employment began rebounding in May 2020 and rose back to 12.9 million by the end of 2024. As a percent of total employment, manufacturing employment peaked during World War II in October 1943 at 38.9%. After peaking in 1943, the percentage of people employed in the manufacturing sector has generally been on a long and steady decline. By early 1980, manufacturing employment comprised slightly more than 21% of total employment. By the end of 2024, manufacturing employment accounted for about 8% of total employment. Although manufacturing as a percent of total state employment has declined, Wisconsin continues to be a leading state for manufacturing. According to the National Association of Manufacturers , Wisconsin and Indiana were virtually tied at end of 2024, with manufacturing employment as a percent of state employment at 15.8%. The loss in manufacturing jobs is not just a U.S. phenomenon. The chart below shows manufacturing employment as a percent of total employment since the turn of the century for seven developed economies: 1) Germany, 2) Italy, 3) Mexico, 4) Japan, 5) United States, 6) United Kingdom, and 7) Canada. In each case, manufacturing employment as a percent of total employment declined. Automation and globalization have changed the manufacturing environment, with service sector jobs becoming increasingly important. Manufacturing Employment as a Percent of Total Employment (Sources: United Nations Industrial Development Organization and International Labour Organization)
The switch from manufacturing to a more service sector economy was not associated with a decline in income. Although the switch certainly affected workers within specific industries, the switch to a more service sector economy was associated with an increase in real GDP per capita. Real GDP per capita measures output per person in a country with greater per capita output leading to greater income. Real GDP per capita is one measure in assessing a country’s overall prosperity and standard of living. The per capita measure does not take into account changes in the distribution of income across a population and therefore is unaffected by changes in income inequality.
Central Wisconsin Report - Spring 2025
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