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Supply Chain Graphic of the Week: US Manufacturing Jobs Lost Since China Entered WTO

 

As Support for Free Trade Agreements Wanes, a Look at Manufacturing Employment Trends Overall and in Key Rust Belt States

March 17, 2016
SCDigest Editorial Staff

The current US presidential race has certainly brought manufacturing job losses, the impact of free trade agreements and related topics to the political forefront.

Several news sources have recently noted that the long time general support for trade deals by the US public may be waning - with perhaps major implications, such as the potential failure to get the new Trans-Pacific Partnership (TPP) agreement that was signed by the Obama administration approved by a now gun shy Congress.

 

One of those recent articles was published in the Wall Street Journal last week, and included the graphic below showing trends in manufacturing employment in the US overall, and then specifically in the Midwest states of Ohio and Illinois, because those states had primary elections this week.

 

As can be seen, US manufacturing jobs in both states and the US as a whole really started to tail off in the early 2000s. Why? While there are probably a number of factors, China's late 2001 entry into the World Trade Organization (WTO), which greatly reduced tariffs and duties on goods imported from China, has to be among the key factors.

 

 

While manufacturing jobs in Ohio and the US overall are recently trending up a bit (Illinois is flat), they are still down substantially from early 2000 levels. Of course, another big drop came during the Great Recession of 2008-09, when many plants closed down or did indeed move offshore.

 

While the overall trend is positive, the eventual recovery to even 2008 levels looks dubious based on these charts.

 

While manufacturing employment in the US (and many other areas of the globe) will never be back to say 1990 levels, what is a reasonable and realistic target? And then, how would we get there?

 

These will surely be key questions in this current political season. SCDigest thinks more can in fact be done, but the days of single factories employing thousands of people is largely over in an era of advanced manufacturing and robotics.

 

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