Is Manufacturing Coming Back?

The anger that many working-class Americans feel about the decline of American manufacturing has manifested itself in the 2016 presidential election. On the Republican side, Trump has promised to do whatever is necessary in order to protect American manufacturing jobs - including implementing policies like high tariffs and conducting business interventions. On the Democratic side, Senator Sanders blamed past trade agreements for the decline in manufacturing jobs. This anger is, perhaps, warranted: according to a report from the Federal Reserve, American manufacturing employment decreased by 18 percent between March 2001 and March 2007 and can be tied to the U.S. granting Permanent Normal Trade Relations to China.

However, some argue that �reshoring� (bringing manufacturing jobs in foreign countries back to America) cannot and will not restore the American manufacturing industry as it once was. The argument is that reshoring is already happening, but many blue-collar workers are not seeing the results. More and more companies are bringing their manufacturing jobs back to the U.S. (60 percent from China), company executives are increasingly planning on reshoring production, factory jobs have been on the rise since March 2010, the wages for those jobs have been increasing, and for the past few years, for every offshored job, another job has been reshored. And yet, American manufacturing is still not what it was. The U.S. has approximately 7 million less manufacturing jobs today than it did during its peak in 1979.

One possible reason for these statistics is that while manufacturing is coming back to America, the factories being built are heavily automated, and thus need much less workers than they might have needed previously. A better solution for helping the middle-class might then be to raise wages for people in service jobs, like retail workers. More Americans work in retail than manufacturing, and on average, retail workers also make less than factory workers.

Another possible reason for this is that modern factories, due to more advanced technologies, require workers who are adept at handling those advanced technologies. Current factory workers do not have the training for this, and thus, another possible solution is to invest in training programs. This in turn might encourage more companies to reshore, as there would be more highly-trained workers in the labor market.

Further Reading:

FiveThirtyEight, Manufacturing Jobs Are Never Coming Back

The New Yorker, Why Donald Trump Is Wrong About Manufacturing Jobs and China

NPR, How Machines Destroy (And Create!) Jobs, In 4 Graphs

The Glass-Ceiling Index

The Economist created the Glass-Ceiling Index in 2013 to commemorate International Women�s Day (March 8th).  Since then, it has been updated every year around this date, using data from the Organisation for Economic Co-operation and Development (OECD),  European Commission and the International Labor Organization (ILO), among other organizations.

The index covers 29 OECD countries and considers 10 indicators, such as women�s access to higher education, labor force participation, wage gap, business-school applications, representation in senior management and the cost of child care. The higher the overall score a country receives, the better the environment is for working women. The index rates countries on a scale of 0 to 100.

As one can see in the chart, this year the leading positions in the ranking are occupied by Nordic countries (Iceland, Norway, Sweden and Finland) where one can find similar levels of labor participation among men and women. Some common characteristics in these nations are large percentages of women with higher education degrees, lower gender wage-gaps, and higher female presence in company boards and in the Legislative chambers.

On the opposite side of the ranking there are countries like Japan, Turkey and South Korea, where women tend to have less higher education degrees than men, lower workforce participation and less presence in senior positions. The difference of wages for men and women is larger, too.

In 2016, a new indicator has been added to the index: paternity leave. Several studies have shown that as new fathers use this benefit, mothers tend to return to the labor market after giving birth, contributing then to reduce the earning gap between men and women. Of the countries considered in this index, paternity paid leave is generally short (eight weeks on average). Even though they show poor environments for working women in the overall index, Japan and South Korea stand out among OECD countries for having the longest paid leave for fathers and mothers (more than 50 weeks of paid leave). Countries like Canada, Italy and Britain don�t have this type of benefit for fathers and the U.S is the only country on this ranking that doesn�t have paid maternal leave.

As no country has the maximum score in the index, there are plenty of opportunities for improvement, even among top-ranked nations. For example, even though OECD women are more likely to have a degree than men, they have fewer opportunities to participate in the workforce and receive lower salaries. Some variables that explain this problem are the careers women are choosing and the costs associated with childbearing.

With this interactive chart you can create your own Glass Ceiling Index, varying the weights of each indicator http://www.economist.com/blogs/graphicdetail/2016/03/daily-chart-0