Manufacture This

The blog of the Alliance for American Manufacturing

Richard McCormack says that without an industrial base, Americans will be stuck in low paying jobs.

The post below is an opinion piece written by award-winning journalist Richard McCormack, the founder and publisher of Manufacturing & Technology News. McCormack also served as the editor of the 2013 book ReMaking America. You can follow him on Twitter at @RichardAMc.

The occupations that will add the most number of new jobs through 2024 don't offer much hope for wealth creation in America.

The U.S. Department of Labor's new jobs projections through 2024 scuttle the goal set by President Obama of creating 1 million new manufacturing jobs.

Almost two-thirds of the 15 occupations that will add the most number of jobs over the next decade require no educational achievement — not even a high-school diploma, according to the U.S. Bureau of Labor Statistics (BLS).

According to the projections, most of the new jobs that will be created over the next decade will be in health care, retail and restaurants. These jobs offer wages that relegate workers to a life of poverty, provide little hope of providing meaningful careers, and make it difficult to pay for soaring rental costs and college loans.

Moreover, the majority of the new jobs created will not help the government fund its basic missions, since they do not generate the taxes necessary to cover growing costs associated with retirees, education, the war on terror and improving the infrastructure.

Without an industrial base, the United States is no longer creating enough high-paying, high-quality jobs that serve industry, including jobs in accounting, finance, product development, design, research and development, IT, legal, marketing, sales, logistics and planning.

Instead, the majority of new jobs will be serving margaritas and fast food; serving the old and infirmed; and serving shoppers in the retail sector with products made by overseas workers.

Unfortunately for economists who tout the “knowledge economy,” there will not be enough new “knowledge jobs” to provide employment for all new “knowledge workers.” At the beginning of the 2015 school year, there were 20.2 million students enrolled in America's colleges. That number represents more than twice the 9.8 million jobs that BLS projects will be created in the U.S. economy over the next 10 years.

Free-trade economists enamored with the growth of the service sector (and remain extremely cavalier about the loss of manufacturing jobs) need to acknowledge that jobs making physical products are better than most of the ones that have replaced them. There is not much pride in serving burgers, but there is a lot of pride among those who are making products that are purchased and appreciated by customers.

Breaking Down the Numbers

Almost half of the occupations with the most job growth over the next decade will require “no formal educational credential,” according to the BLS. Only four of the top 15 growing occupations (registered nurses, general managers, medical assistants and software developers) will pay a livable wage; whereas four of the top five occupations will pay less than the poverty wage of $24,250 (personal care aides, home health aides, food preparers and fast food servers, and retail salespersons).

Ten of the top 15 occupations adding the most number of jobs over the next decade will pay less than $31,201.

“The healthcare and social assistance major sector is expected to become the largest employing major sector during the projections decade, overtaking the state and local government major sector and the professional and business services sector,” the BLS explains.

According to BLS analysts, there is no chance for a manufacturing jobs renaissance. Manufacturing employment for the decade ending 2024 is projected to decline 0.7 percent annually, “a more moderate decline than the 1.6 percent rate experienced in the prior decade.”

The United States is projected to lose 790,400 manufacturing jobs by 2024, reducing the number of workers in manufacturing from the 2014 level of about 12.2 million to 11.4 million.

In 2024, manufacturing jobs will account for 7.1 percent of the U.S. workforce, down from 8.1 percent in 2014 and 9.9 percent in 2004. By 2024, only 3.3 percent of the total American population of 345 million will be making products.

Besides manufacturing, the only other major non-agricultural occupational category in the private sector to suffer a greater decline of jobs will be wholesale trade, which will lose 0.9 percent of jobs annually, or 47,900 jobs over the decade ending 2024 (to 6.2 million).

The U.S. agricultural sector will also remain in a downward spiral for employment, losing 110,500 jobs, an annual loss of 0.5 percent, to 2 million Americans employed growing food.

Meanwhile, jobs that consume rather than produce wealth continue to grow. State and local government jobs will increase at an annual rate of 0.4 percent (adding 756,100 jobs over the next decade to 19.9 million).

The federal government is projected to lose 383,400 jobs over that period, an annual loss of 1.5 percent, reducing the federal workforce from 2.7 million in 2014 to 2.4 million in 2024.

Between 2004 and 2014, the number of self-employed people outside of the agricultural sector took a nosedive, falling by 883,400, from 9.5 million to 8.6 million. But that should turn around, according to BLS: The number of self-employed is projected to grow by 579,300 over the next decade to 9.2 million.

The total number of jobs in the United States is not projected to increase very much, either. The annual growth rate in jobs is projected to be 0.5 percent, well below the projected annual GDP growth rate of 2.2 percent.

There were 150.5 million jobs in the United States in 2014, out of a population of 322 million. For the 10 years through 2024, BLS projects an addition of 9.8 million jobs. Over that same period, the U.S. population is projected to grow by more than double that amount, to 345 million.

The five occupations with the most number of projected new jobs from 2014 through 2024:

  •  Home health aides, with 348,400 new jobs with a 2014 median annual wage of $21,380 (38.1 percent growth rate over 10 years).
  • Personal care aides, 458,100 new jobs with a 2014 median annual wage of $20,440 (25.9 percent growth rate).
  • Registered nurses, 439,300 new jobs with a 2014 median annual wage of $66,640 (16 percent growth rate of new jobs).
  • Food preparation and serving workers, 343,500 new jobs with a 2014 median annual wage of $18,410 (10.9 percent growth rate).
  • Retail sales persons, 314,200 new jobs with a 2014 median annual wage of $21,390 (6.8 percent growth rate of new jobs).