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November 14, 2003

What Kind of Jobs Do You Want?

The U.S. economy has added more than a quarter million net new jobs in the last three months, and recently posted its strongest single quarter of growth in almost twenty years.  Even the much-maligned Indiana economy has managed a modest 19,000 job gain since July, with a modest pickup in average weekly hours and other forward-looking economic indicators. Does this mean that the economy will fade from prominence as a campaign issue?

Don't bet on it.  Political rhetoric has a way of bending and flexing to fit whatever new facts may arrive.  You can be sure that even if a torrent of new hiring propels job totals to the stratosphere in the coming months, they won't be the kind of jobs that make everyone happy, especially inIndiana .  That's because very few of the net new jobs created are likely to be manufacturing jobs.

In communities across the state, there is a palpable discomfort, even distrust, with any pattern of growth that does not embrace factories and assembly lines.  That much is easy to see.  We mourn the all-too-frequent loss of these production-oriented jobs, and celebrate the happier -- and relatively rare -- occasions when new plants arrive, and rightly so.  Those jobs have a significant impact our economic livelihoods, both individually and collectively.

What is harder to understand is precisely why so many of us still cherish the notion that manufacturing in general -- and large scale, mass production-oriented manufacturing in particular -- is the key to our economic salvation, when the path of economic growth has been telling us otherwise for almost two decades.

Since the mid-point of the 1980's, almost three out of every four net new jobs created in the national economy have been in white collar occupations -- managers, professionals, engineers and other knowledge workers -- most of whom make more money than production workers.  Indeed, the single, most important explanation for the steady deterioration in Indiana 's average wages relative to the national average is the failure of our state economy to participate in this growth.

At the community level, at least, a preference for manufacturing over other types of jobs is a little easier to explain.  Indeed, in an economic developer's version of Sophie's Choice, where one must choose between 100 factory jobs and, say, 100 engineering jobs at a software company, there is much to be said for the former.   Factories are familiar, are more likely to employ local people, and their plants and equipment make great additions to the local property tax base.

And in a state that is the most manufacturing-intensive in the country, factories "plug in" to the rest of the state economy better than many other facilities might.  The customers and suppliers of an auto parts company in Bedford are more likely to be in its own back yard than, say, those up- or downstream of a testing laboratory or an engineering consulting firm, increasing its economic footprint.

But the game these communities are hunting has become increasingly scarce.  In the national economy, manufacturing jobs have been on a downward trajectory for 24 years. The 100 manufacturing jobs a community succeeds in attracting must run the twin gauntlets of job-thinning productivity improvements and cut-throat international competition every year.  Indiana 's manufacturers are, by necessity, world class competitors, but the forces that make them so will always restrict their payroll growth.

That same necessity forces all of us to wake up to the reality that it will be growth in the production of services and knowledge, rather than physical products, that will put bread on most of our tables in the future.

Link to this commentary: https://commentaries.cberdata.org/345/what-kind-of-jobs-do-you-want

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About the Author

Pat Barkey none@example.com

Patrick Barkey is director of the University of Montana Bureau of Business and Economic Research. He served previously as Director of the Bureau of Business Research (now the Center for Business and Economic Research) at Ball State University, overseeing and participating in a wide variety of projects in labor market research and state and regional economic policy issues. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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