POLICY BRIEF 13-27

US Employment Deindustrialization: Insights from History and the International Experience

by Robert Z. Lawrence, Peterson Institute for International Economics
and Lawrence Edwards, Cape Town University

October 2013

International factors, such as the dramatic increase in imports from emerging-market economies, especially China, have been widely blamed for the decline in manufacturing employment in the United States over the past decade. The authors argue, however, that far more important in causing that decline has been the slow overall growth in US employment and powerful historical forces that have affected all advanced economies: a combination of rapid productivity growth and demand that is relatively unresponsive to income growth and lower prices. To be sure, US manufacturing employment can grow in the short run. The labor content of the US manufacturing trade deficit remains significant and a vigorous US and global economic recovery could boost US manufacturing employment. Over the long run, however, absent new product innovations, or a shift in consumer preferences, the basic forces leading to declining manufacturing employment are unlikely to abate.

View full document [pdf]


RELATED LINKS

Working Paper 14-6: Wages and Labor Market Slack: Making the Dual Mandate Operational September 2014
Revised November 13, 2014

Working Paper 14-2: Labor Market Slack in the United Kingdom July 2014

Working Paper 13-7: How to Measure Underemployment? August 2013

Article: When It Comes to Globalization, Listen to the American People April 18, 2011

Op-ed: Trade: An Opportunity About to Be Lost? May 20, 2011

Testimony: Designing a National Strategy for Responding to Economic Dislocation June 24, 2008

Testimony: Reforming Unemployment Insurance for the 21st Century Workforce March 15, 2007

Op-ed: Why a “Grand Deal” on Labor Could End Trade Talks March 12, 2007

Working Paper 05-9: Tradable Services: Understanding the Scope and Impact of Services Outsourcing September 2005

Paper: Outsourcing--Stains on the White Collar? February 2004

Policy Brief 03-11: Globalization of IT Services and White Collar Jobs: The Next Wave of Productivity Growth December 2003

Policy Brief 01-2: A Prescription to Relieve Worker Anxiety March 2001



© 2014 Peter G. Peterson Institute for International Economics. 1750 Massachusetts Avenue, NW.
Washington, DC 20036. Tel: 202-328-9000 Fax: 202-659-3225 / 202-328-5432
Site development and hosting by Digital Division