U.S. States Where Manufacturing Is Thriving

Staff Report

Thursday, May 19th, 2022

The health of the manufacturing sector in the U.S. has been a major focus of public attention in recent years. With populist political figures like Donald Trump on the right and Bernie Sanders on the left offering critiques of U.S. trade policy and debating how best to assist American manufacturers and workers, policymakers and economic leaders of all stripes have put new focus on support for manufacturing. From former President Trump’s focus on trade policy and President Biden’s $1.2 trillion bipartisan infrastructure bill to companies “reshoring” plants and consumers expressing preferences for American-made goods, combatting the apparent decline of U.S. manufacturing has become a shared commitment.

Manufacturing is important to the U.S. economy for several reasons. Manufacturing jobs have historically been a pathway to the middle class, offering good pay without requiring high levels of education. Companies that rely on manufacturing invest heavily in research and development, which helps drive innovation. Domestic manufacturing also contributes to more secure and resilient supply chains—a point that has become clear during the COVID-19 pandemic.

But in recent decades, the role of manufacturing in the U.S. economy has been diminished. Many companies began moving factories abroad in search of lower costs and better profit margins. Trade deals like NAFTA reduced the cost of foreign imports, giving U.S. producers more competitors. Technological advances made manufacturing processes more efficient, which reduced the need for many manufacturing jobs.

The effects of these shifts in manufacturing are most apparent in employment, which has decreased over the years as a share of overall employment and in total numbers. After manufacturing peaked near 40% of U.S. jobs at the height of World War II, the sector has seen a steady decline over time, to around 8.4% of employment today. In total employment, manufacturing jobs peaked at 19.5 million in the late 1970s and fell off sharply after 2000 to just 12.6 million today.