Busting the myth of a manufacturing comeback in the US

President Joe Biden has lately been celebrating the triumphant return of “Made in America.” “‘Make It in America’ is no longer just a slogan; it’s a reality in my administration,” Biden said last week. Days later, he boasted about “finally bringing home jobs that have been overseas for a while.” These are among many comments touting a supposed manufacturing comeback, based on recentlyannounced plans for factories that will produce semiconductors, electric vehicles and fiber-optic cables. It’s these new factories, Biden says, that will power job growth “from the bottom up and the middle out.”

Such rhetoric is compelling: What red-blooded American doesn’t love the idea of bringing home manufacturing jobs? But it gets the issue wrong in a few interconnected ways.

Contrary to myths we’ve stopped “making” things in the United States, we already manufacture a lot of stuff here. In fact, we manufacture nearly the most “stuff” on record, as measured by the inflation-adjusted value of those products. We just happen to make that stuff with fewer workers than we used to, because technological advances have led to huge productivity gains.

To oversimplify: U.S. factories still make things, but those are increasingly produced by robots.

This is true even for some of the iconic American industries that have supposedly petered out. The United States produces about as much steel today as it did three decades ago, for example, with about half as many workers.

This is not a new phenomenon. Back in 1870, roughly half of workers were in farming. Mechanization brought the share down to about 1% today. That’s not a tragedy; it’s a triumph of human ingenuity. We can feed more people with less labor.

Similarly, the manufacturing industry’s fraction of total employment peaked back in the 1940s, based on available records, and has been mostly trending downward ever since. In fact, while Biden can honestly tout manufacturing job growth on his watch, the share of total jobs that are in manufacturing remains near a record low — roughly 8% of total non-farm jobs.

... Building more physical “things” in this country does not guarantee huge job growth, much less “bottom-up” job growth. That’s true even if we invest in manufacturing the technologies of “the future,” as Biden frames it. In fact, as the country transitions to electric vehicles, employment in the U.S. auto manufacturing industry is likely to shrink, even if that EV manufacturing happens here, because electric cars, having fewer parts, will ultimately require less labor to produce.

... Nonetheless, Americans remain nostalgic for an era when manufacturing employed more of the U.S. workforce. That’s what Biden is tapping into. Presumably what Americans miss, though, is not the specific midcentury factory jobs themselves, which were often backbreakingly difficult, but rather, the solid middleclass wages they offered, even to high school grads and dropouts.

That is probably not something that can be reproduced today, at least not for those jobs, not at the same scale. The manufacturing jobs that will persist will likely require more education and training than in the past. In fact: they already do.

So what should politicians focus on instead? ... Entertainment. Cloud computing. Logistics. Advertising. Higher ed. Finance. Medicine. The United States is a servicesbased economy. We are really good at producing services in America and employing Americans in service-sector jobs.

It’s true some low-level service-sector jobs are poorly paid, unpleasant, even backbreaking. But the solution is not to promise to revive some halcyon manufacturing-centric labor market that will never return. It’s to automate as much of the unpleasant, poorly-paid work as possible, or at least make it more humane, and get more U.S. workers trained for better, high-paying jobs — whatever sector they’re in.