Upskilling and Downsizing in American Manufacturing

1. Manufacturing now plays a smaller, less central role in an economy dominated by services.
2. Manufacturing is still a source of good jobs for less-educated workers.
3. While there are still good jobs in manufacturing, the structure of economic opportunity has shifted in favor of those with postsecondary education and
   industry-recognized credentials.
4. Manufacturing workers now pursue education and training options beyond traditional degrees and diplomas.
5. Current trends suggest that there will be no return to the glory days when good manufacturing jobs were plentiful for high school-educated workers.

After decades of industry transformation, the manufacturing workplace has a new look that bears little resemblance to that of the 1970s. Modern manufacturing is not just about making things on the factory floor. It now requires workers with a diverse set of skills to perform functions such as research and development, product and production design, marketing and sales, and customer support. While workers with a high school diploma or less dominated the manufacturing workforce of the past, today, even production jobs have begun to shift to workers with postsecondary education. The result is that while manufacturing still has good jobs that pay well, they are now going to a downsized, better-educated workforce.

Manufacturing firms are not likely to add large numbers of jobs, because today’s highly automated production methods require fewer production workers and more equipment and technology than the labor-intensive factories of the past. In fact, the industry is expected to shed employment in the next decade, with workers with a high school diploma or less sustaining most of the losses in production occupations.

Despite its decline, manufacturing remains an important source of economic opportunity, particularly in the 24 states where it is the top industry for good jobs and the 35 states where it is the top industry for good jobs for workers without a bachelor’s degree. While manufacturing will never return to its peak when a third of all workers with a high school diploma or less were employed in the industry, it is still a route to good jobs for a smaller, more skilled workforce.

This report analyzes data from 1991 to 2017.

In 1970, nearly four out of five of all manufacturing jobs (79%) and an even higher proportion of production jobs (92%) went to workers with no more than a high school diploma. High school dropouts alone accounted for more than two out of five manufacturing workers (43%). But this began to change as employers automated five million jobs between 1991 and 2016.

Currently:

• The high school pathway is a well-traveled route for slightly more than two out of five manufacturing workers (43%), down from the four out of five workers (79%) than it was before.
• The middle-skills pathway has doubled as a share of the manufacturing workforce since 1970, reaching about a quarter in 2016.
• The bachelor’s degree pathway has grown from 8 percent of all manufacturing jobs in 1970 to represent nearly a third of the manufacturing workforce.

The structure of good jobs has shifted in favor of workers with more education. Workers with a high school diploma or less, who held the largest number of good manufacturing jobs in 1991, held fewer good jobs than workers with a bachelor’s degree by 2016.

• In 1947, manufacturing was responsible for 25 percent of all value-added in the economy, more than any other industry. By 2017 it had fallen to 12 percent of all value-added.
• In 2007, for the first time, workers on the high school pathway made up less than half of the manufacturing workforce. In that year, workers with some level of postsecondary education became the new majority.
• In 2016, manufacturing still provided more good jobs for workers without a bachelor’s degree than any other industry, with 4.8 million (16 percent) of all those jobs.
• About 10 percent of manufacturing workers have earned a certificate, which typically recognizes the completion of a program of study between high school and the associate’s degree

• Last Updated:
• Created:
• Resource Publication Date: 2019
• Author(s): A. Carnevale, N. Ridley, B. Cheah, J. Strohl, K. Peltier Campbell
• Funding Source: JP Morgan Chase
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies