Even a heroic reshoring effort eliminating Americaโs $US1.2 trillion (about $1.9 trillion) goods-trade deficit would do little for jobs. In the production of that amount of goods, about $US630 billion (about $973 billion) of value-added would come from manufacturing (with the rest from raw materials, transport and so on). Robert Lawrence of Harvard University estimates that, with each manufacturing worker generating $US230,000 (about $355,000) or so in value added, bringing back production to close the deficit would create around three million jobs, half on the factory floor. That would lift the share of the workforce in manufacturing production by barely a percentage point. Assume this was done by levying an average effective tariff rate of 20 per cent on Americaโs $US3 trillion (about $4.6 trillion) of imports, and it could cost an extra $US600 billion (about $926 billion), or $US200,000 (about $308,000) per manufacturing job โsavedโ.
That is a high price for jobs that are not as attractive as in the past. Seven decades ago, factories offered a rare bundle: good pay, job security, union protection, plentiful employment and no degree requirement. By the 1980s manufacturing workers still earned 10 per cent more than comparable peers in other parts of the economy. Their productivity was also growing faster.
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Today factory-floor work lags behind non-supervisory roles in services on hourly pay. Even if you control for age, gender, race and more, the manufacturing wage premium has collapsed. Using methods similar to the Department of Commerce and the Economic Policy Institute, we estimate by 2024 the premium had more than halved since the 1980s. For those without a college education, it has gone entirely, even though such workers still enjoy a premium in construction and transport. Productivity growth has fallen, too: output per industrial worker is now rising more slowly than per service-sector worker, suggesting wage growth will be weak as well. A crucial component of the โmanufacturing jobs are good jobsโ argument no longer holds.
A job in industry is also now harder to attain. Modern factories are high-tech, run by engineers and technicians. In the early 1980s blue-collar assemblers, machine operators and repair workers made up more than half of the manufacturing workforce. Today they account for less than a third. White-collar professionals outnumber blue-collar factory-floor workers by a wide margin. Even once obtained, a factory job is far less likely to be unionised than in previous decades, with membership having fallen from one in four workers in the 1980s to less than one in ten today.
White-collar professionals outnumber blue-collar factory-floor workers by a wide margin.Credit: Getty Images
In order to find the modern equivalent of such jobs, we looked for employment with the same traits. What offers decent pay, unionisation, requires no degree and can soak up the male workforce? The result: mechanics, repair technicians, security workers and the skilled trades.
Over seven million Americans work as carpenters, electricians, solar-panel installers and in other such trades; almost all are male and lack a degree. The median wage is a solid $US25 (about $39) an hour, unionisation is above average and demand is expected to rise as America upgrades its infrastructure. Another five million toil as repair and maintenance workers โ think HVAC technicians and telecom installers โ and mechanics, earning wages well above the factory-floor average. Emergency and security workers also show similarities; over a third are union members.
An air-con capital of the world
Still, these jobs differ from manufacturing in one important way: there is no such thing as an HVAC company town. Factories once powered whole cities, creating demand for suppliers, logistics and dive bars. The new jobs are more dispersed and, as such, less likely to prop up local economies. Yet although the benefits are more diffuse, they are almost as large. Nearly as many people are employed in such categories as held manufacturing jobs in the 1990s. With better wages, less credentialism and stronger unions, they may look more attractive than modern factory jobs to working-class Americans.
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The future is drifting even further from factories. Skilled trades and repair workers should see growth of five per cent over the next decade, according to official projections; the number of manufacturing jobs is expected to fall. The fastest-growing categories for workers without degrees are in health-care support and personal care, which are expected to grow by 15 per cent and six per cent, respectively. These include roles such as nursing assistants and child-care workers, and do not look anything like old manufacturing jobs owing to their low pay. The task, as Dani Rodrik of Harvard puts it, is to boost the productivity of the jobs that are actually growing. Perhaps that might include ensuring the adoption of AI, whether for managing medication or diagnosis.
In the late 18th century, Thomas Jefferson viewed farming as the foundation of a self-reliant republic. Influenced by French physiocrats who saw agriculture as the noblest source of national wealth, he believed that working the land was the path to liberty and abundance. By the 20th century, factory work had inherited that symbolic role. But like farming before it, manufacturing employment fades with rising prosperity and productivity. The heart of working-class America now beats elsewhere.
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