How Manufacturing Can Expand Without Job Growth

The manufacturing industry has seen big growth in the last few years, due in part to larger orders for American-made goods being placed. As the economy sluggishly recovers from the recession, consumer confidence has grown enough to validate these larger orders. Unfortunately, growth in output in the manufacturing industry has not led to job growth for several key reasons.

Since January 2013, the manufacturing industry has created 100,000 jobs. While on the surface this may seem like a lot of job growth, it's actually a small amount in the grand scheme—especially once job losses are added into the equation. It's a troubling number considering the uptick in manufacturing orders and output. One of the reasons why there has been growth in output but not in jobs is a great increase in worker productivity in this sector. Employees are learning to work smarter, and some have degrees or advanced training that allow them to turn out products at a much higher rate than entry-level employees. Employers are also actively seeking out experienced employees who know how to streamline their work to create more goods in less time.

Another reason for the surge in the manufacturing industry is an abundance of cheap, readily available energy. The recent energy boom has been a boon to manufacturers, who can now run large plants with a lot of automation and electricity for much cheaper than before. This has been cited as a reason why some companies that had previously outsourced work to countries with cheap labor are returning to the United States. This has helped increase production but not necessarily jobs.

Automation in the manufacturing industry has also led to a drop in the amount of hiring needed to effectively run these plants. Robots have replaced humans in many high-tech plants because they are more precise, don't need breaks, and are generally easy and cheap to repair. They also don't require costly benefits and can be upgraded at any time. As companies like Google get deeper into the robotics game, this trend is not likely to change, which will likely lead to even more automation. Companies that still require humans to do their work often still employ technology to increase productivity, which means the work of two or more people can now often be done with one person.

There has been a manufacturing renaissance of sorts recently, but this has not translated to more jobs. This is due in large part to worker productivity being so high and technology and robotics slowly taking over jobs that humans used to do. Technology will only continue to improve, which means that no matter how large orders get, the manufacturing industry may not have to hire very many people to cover their labor needs.

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