The Washington Post

The U.S. may have more manufacturing jobs than we think

The United States lost 6 million manufacturing jobs between 2000 and 2009. At least, that's the official count from the Bureau of Labor Statistics. But could the official count be missing something?

(Photo by Justin Sullivan/Getty Images) (Justin Sullivan/Getty Images)

In a new paper, two economists point out that nowadays there are lots of companies in the United States that aren't counted as manufacturing by the government but are still heavily involved in the manufacturing of goods.

The prevalence of these "factory-less goods producers" — Apple, Inc. is a prime example — suggests that the country might have more manufacturing capabilities than official statistics suggest.

The authors, Andrew Bernard and Teresa Fort of Dartmouth's Tuck School of Business, define a "factory-less goods producer" as a company that designs and coordinates the manufacturing of various goods. It just doesn't have an actual factory or assembly plant; that part is usually contracted out. Apple, for instance, does just about everything else in the United States except stitching its iPhones and iPads together. That's outsourced to China.

Right now, the Census Bureau counts these U.S. companies as "wholesale" firms instead of "manufacturers." But that's certainly an arguable point. After all, many of the engineers and designers at these firms would count as manufacturing workers if their company happened to have a factory in-house, even though they'd be doing the exact same job.

And this could really make a difference in the statistics. Bernard and Fort estimate that if all factory-less goods producers had been reclassified as manufacturers, that would have added from 431,000 to 1,934,000 workers to the U.S. manufacturing sector in 2007. (The United States officially had about 14 million manufacturing jobs that year.)

There are a few caveats, however. In an interview, the authors stressed that they weren't able to tell how these numbers have changed over time — in part because the historical data on factory-less goods producers is inconsistent. So it's hard to tell how much of the manufacturing job loss since 2000, say, is attributable to a shift toward factory-less goods production. Researchers would like to explore that aspect in the future.

Bernard also noted that the rise of factory-less goods producers can't account for the entire decline in U.S. manufacturing jobs, which have fallen from 17 million in the 1990s to 11.9 million today:

"We can safely say that the decline of manufacturing jobs is a true decline," he says. "But that decline may be mitigated by the fact that some of those jobs and capabilities have still stayed within the country." The upshot, he says, is that "we may have to rethink our knowledge of what manufacturing firms do."

Further reading: 

-- Here's a recent paper from the Census Bureau exploring the question of whether producers of factory-less goods should be counted in the manufacturing sector.

-- Is U.S. manufacturing set for a comeback--or is it all just hype?



Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Show Comments
Most Read



Success! Check your inbox for details.

See all newsletters

Your Three. Videos curated for you.
Play Videos
What can babies teach students?
Unconventional warfare with a side of ale
A veteran finds healing on a dog sled
Play Videos
A fighter pilot helmet with 360 degrees of sky
Is fencing the answer to brain health?
Scenes from Brazil's Carajás Railway
Play Videos
How a hacker group came to Washington
The woman behind the Nats’ presidents ‘Star Wars’ makeover
How hackers can control your car from miles away
Play Videos
Philadelphia's real signature sandwich
Full disclosure: 3 bedrooms, 2 baths, 1 ghoul
Europe's migrant crisis, explained
Next Story
Ezra Klein · September 5, 2013

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.