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Economists may have declared the 2007-2009 recession over, yet the pain lingers.

Unemployment has hit younger and older workers, males, and African Americans especially hard.

But one group has paid the biggest price: Blue-collar US manufacturing workers have suffered disproportionate job losses, and their plight has big implications for all of us.

In October, the overall US unemployment rate was 9.6%, while total unemployment and “underemployment” (including people who would prefer to work full time but currently aren’t) hovered around 17%.

But the disparity between white-collar and blue-collar unemployment is stunning: 4.5% among college graduates, vs. 10.8% for those with a high-school diploma—and 14.3% for those without one.

The likely reason: a precipitate decline in US-based manufacturing employment. The US has been losing those jobs for years, but the pace of the decline picked up shockingly in the past decade and during the recession.

Although some big, US-based multinationals recently have announced plans to add production facilities here, this hemorrhage of manufacturing jobs puts us in danger of losing our competitive edge and  missing out on the jobs of the future.

This table tells the story:

From its peak of 19.5 million in 1979, manufacturing employment declined, on average, by about 1.5 million jobs a decade until 2001. Then it fell off a cliff: America lost 2.5 million manufacturing jobs from 2001 to 2007 and almost that much again during the latest recession.

So, nearly five million American manufacturing jobs have disappeared since 2001, an astonishing 29% plunge in less than ten years. The US has lost more than 42,000 factories during that time.

Clearly, it was a “lost decade” for far more people than investors in US stocks.

The number of US workers employed in manufacturing is at its lowest level since 1941—when our factories became the “arsenal of democracy” that helped win World War II.

Where have you gone, Rosie the Riveter?

The hollowing out of US manufacturing would make it hard for us to do that now. Whole industries have nearly picked up and left the US—textiles, furniture, and many electronic components.

Natural, free-market forces have driven most of it. The technological revolution has helped companies boost productivity sharply, so they need fewer people to produce the same amount of goods.

“During the late 1990s, productivity growth in… manufacturing accelerated,… averaging 4.1% annually over the 1995–2007 period,” the Congressional Budget Office reported.

“As a result, productivity in manufacturing has risen by about one-third since 2000.”

And, of course, globalization has triggered explosive growth in lower-cost emerging markets, especially in Asia, and they have become formidable competitors in an amazingly short time.

Margaret McMillan, an associate professor at Tufts University, has studied the impact of foreign competition on US manufacturing. She says the declining price of computers, greater penetration of imports in the US, and shifting production to lower-wage countries have caused the big decline in US manufacturing employment.

“We find that offshoring…is responsible for a downsizing of the American workforce,” she says, adding  that big companies that shift jobs overseas need advanced technology to manage vastly expanded  global supply chains efficiently.

Of course, China joined the World Trade Organization in 2001, opening the floodgates on both offshore production and competitive imports, although it only accelerated trends that had been in place for years. 

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