The Charlotte metropolitan region shed nearly 40 percent of its manufacturing workers from 2000 to 2010, bleeding jobs faster than the national average. But the sector remains an important driver of employment and wages, a new study from the Brookings Institution found.
The report, “Locating American Manufacturing: Trends in the Geography of Production,” released early Wednesday, tracked manufacturing trends over the last decade in all 366 U.S. metro areas. It found American manufacturing, overall, is centered largely in metro areas and is becoming more diversified – and more high-tech.
“There has been a lot of theorizing in recent years that manufacturing is basically the same across the country, and this sector no longer matters much to the economy,” Brookings fellow and report co-author Howard Wial said. “Our research shows that’s not the case.”
Among the key findings: Nearly 80 percent of all manufacturing jobs and 95 percent of those jobs classified as “very high-tech” were concentrated in metropolitan areas in 2010. Most metro areas specialize strongly in at least one manufacturing industry, and most jobs in the sector were clustered in six broad categories, including computers, chemicals and food production.
The report also highlighted the sector’s severe hit from 2000 to 2010: Nationally, manufacturers slashed 5.9 million jobs during that period, a 34 percent decline. There has been some rebound since 2010, but it’s unclear whether that’s due to pent-up demand from the recession or the beginning of a longer-term trend, the Brookings report found.
South lost a third
Meanwhile, there has been a geographic change. The Midwest and South each lost about a third of their manufacturing jobs from 2000 to 2010. Since then, those jobs have grown by more than 5 percent in the Midwest, compared to just over 2 percent in the South.
In the Charlotte-Gastonia-Concord region, manufacturers employ more than 65,000 people, ranking the area 27th among U.S. metros, the study found. That was down 39.6 percent from 2000.
Manufacturing jobs make up 8.1 percent of total employment in the Charlotte area, below the 8.5 percent national average. Yet the sector remains important to the region, paying an average salary of more than $57,000 per year, above the $52,000 for all jobs in the area.
Moderately high-tech manufacturing jobs, which account for about one-fifth of the area’s manufacturing positions, pay about $66,000 annually, the Brookings report found. Jobs classified as very high-tech pay an average of more than $99,000 per year, it said.
Across the country, manufacturing pay ranges from about $35,000 in McAllen, Texas, to almost $145,000 in San Jose, Calif.
Despite the big job losses of years past, researchers found hopeful signs in the data. The recent boom in domestic oil and natural gas production, for instance, has boosted manufacturing wages higher than the overall economy.
And manufacturers located in metro areas have significant advantages, including close proximity to related firms, bigger pools of talented workers, and better access to customers, suppliers, education and other services, the report found.
Now, it’s up to policymakers to support the development of innovative, high-tech manufacturing that employs skilled – and highly paid – workers in U.S. metro areas, according to the report from Brookings, a Washington, D.C.-based public policy organization. The research, which relies on Moody’s Analytics and government data, is part of Brookings’ Metropolitan Policy Program, an effort to provide decision-makers with information and policy ideas for improving metropolitan areas.
“We can make investments in training, in research and development, in infrastructure, or we can watch things crumble,” said Susan Helper, an economics professor at Case Western Reserve University and a report co-author. “We can take advantage of the synergies that are happening on the ground, or we can squander the energy that’s building.”