Manufacturing jobs continue to disappear in the United States, and the process has accelerated during the recession that started in March 2001.  Manufacturing employment declined from 18,116,000 to 17,037,000 between March and December 2001, according to the U.S. Bureau of Labor Statistics (BLS).  The popular media have reported that this recession is the mildest since World War II, yet federal data reveals a more severe contraction in manufacturing.  A February 11 memo released by the National Bureau of Economic Research states that “A peak [in industrial production] occurred in June 2000 and the index declined over the next 17 months by 7.1 percent, far surpassing the average decline in the earlier recessions of 4.6 percent.”  BLS data shows that the percentage loss of manufacturing jobs (6.4 percent) already exceeds declines registered in the July 1990-March 1991 (3.7 percent) and July 1981-November 1982 (6.2 percent) recessions.

Manufacturing job creation peaked in April 1998.  Since then, some of the biggest job losses have occurred in the industrial heartland.  Michigan and Ohio, whose combined manufacturing employment is greater than any other state’s, lost 123,000 jobs between April 1998 and December 2001.  Another 243,000 manufacturing jobs were lost in Illinois (83,900), Pennsylvania (76,000), Indiana (44,200), and Wisconsin (39,000), while California and Texas shed a combined 149,000.  From a post-1950 annualized average peak of 21,040,000 in 1979, manufacturing employment dropped to 17,698,000 in 2001, a 16-percent decline.

Annualized average manufacturing employment has fallen eight of the 12 years since 1990.  During the 1990’s, nearly 850,000 manufacturing jobs were lost.  “The manufacturing group of industries was particularly sensitive to changing economic conditions, both at home and abroad,” reports the Monthly Labor Review (December 2000).  “The durable goods industries experienced the greatest losses and were slower to recover from national and global economic weaknesses,” including the 1997 Asian crisis.  “Employment in primary metals, which fluctuates with trade balances, sharply declined during the decade,” the Review notes.  “Blast furnaces and basic steel products was hurt in particular, and production capacity bottomed out as financial crisis spread across the globe.”  Among durable-goods components, the largest declines were in instruments and related products (16.5 percent), primary metals (8.3 percent), and transportation equipment (8.2 percent).  Nondurable-goods employment peaked in January 1995, with large declines recorded in apparel and other textile products (35.6 percent) and in the production of the textiles themselves (22 percent).

Which sectors recorded employment gains?  The service sector increased 45 percent in the 1990’s, to nearly 40 million jobs.  Employment in the service sector has doubled since 1979.  Retail-trade jobs grew by 17 percent in the 1990’s, while finance, insurance, and real-estate sector job growth was 13 percent.

Perhaps the most revealing fact to emerge from the BLS data is that combined federal, state, and local government employment grew 13.4 percent in the 1990’s and exceeds manufacturing in many states.  Combined government employment in Texas is 1.6 million, while 1.05 million work for manufacturers.  Through December 2001, government employment was the only sector that did not decline during this recession.  In June 1991, combined government employment surpassed manufacturing for the first time, and it has continued to grow as manufacturing declines.  Today, government employs 21 million, an army of bureaucrats that exceeds workers who actually build products by more than four million.