Manufacturing a bright spot in U.S. economy
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Jeremy Hobson: The markets are closed today, but the government is open, so the Labor Department will be releasing the all important March jobs report in a few hours. It’ll tell us how many jobs were created last month, and what the new unemployment rate is. Economists are expecting around 210,000 ew jobs were added in March, and some of that will likely come from another strong month for manufacturing in this country.
Marketplace economics correspondent Chris Farrell joins us now to talk about that. Good morning.
Chris Farrell:Good morning, Jeremy.
Hobson: So Chris, we’ve all heard about manufacturing as a bright spot in our economic recovery. How much of a role is that sector playing in our job growth right now?
Farrell: It’s playing a huge role. Over the past two years, we’ve added over 400,000 factory jobs and you know, you get these major multinational corporations like Ford, General Electric, United Technologies — they’re adding jobs here in the U.S. So it’s a bright spot in an economy that’s been recovering, but it’s a moderate recovery, not particularly exciting but the factory sector is really working.
Hobson: And when these companies add manufacturing jobs here in this country, are they bringing these jobs back from places like China?
Farrell: Well this has captured a lot of attention, because we have this phenomenon called inshoring, so a manufacturing plant may not add workers in China or put workers in China, but instead add here in the U.S., or even bring jobs from China to the U.S. So you’re seeing GE doing that and Ford doing that and Masterlock, all-clad manufacturers. Part of it is you want to be close to your market; you don’t want to be carrying a lot of inventories. There’s the high price of oil, rising raises in China — so there’s a number of factors that are making manufacturing in the United States more attractive.
Hobson: Are we getting high-end manufacturing jobs like they have in Germany?
Farrell: Yes, we basically are getting good manufacturing jobs because you know what, despite the fact that our wages are more competitive on a global basis, we’re still pretty expensive. So this is the kind of manufacturing that uses a lot of computers, you need a lot of knowledge, you’re hiring educated workers to operate these factory lines. And the really cheap stuff? It’s still overseas.
Hobson: All right, big picture, Chris: How much of our workforce is now in manufacturing, and how does that compare to, say, the peak of manufacturing in the U.S.?
Farrell: Oh we’re way down. I mean, look: Manufacturing is great, these are good jobs, but it’s only about 9 percent of our workforce — 12 million people. 1979, you know, the era of smokestack America — 20 million. So this is good, it’s good news, it adds a lot of jobs — you add a factory worker, there’s other jobs that get added elsewhere in the economy, but it’s never going to be a major job engine in the end.
Hobson: Marketplace economics correspondent Chris Farrell. Thanks so much.
Farrell: Thanks a lot.