Manufacturing Employment Growth

Manufacturing has long been a mainstay of the Michigan economy and an important source of employment across the country. Over the last five years Michigan has lost a large number of manufacturing jobs, especially in the automobile sector. Michigan is far from alone in this; most states saw declines in manufacturing employment between 2001 and 2006. But right-to-work states saw much less severe losses in this area.

The trend away from manufacturing employment was already well underway five years ago; nationally, manufacturing employment reached its peak in 1979. Between 1990 and 2000 right-to-work states experienced an average increase of 1.0 percent annually in manufacturing employment, but non-right-to-work states saw annual declines in manufacturing payroll averaging 0.6 percent. Michigan, in the midst of a stretch of relative prosperity, gained manufacturing jobs by an average of 0.4 percent per year during that time, but had experienced losses in the 1980s.[8]

The tendency for non-right-to-work states to lose manufacturing jobs has become more pronounced over the last several years. Between 2001 and 2006 the typical right-to-work state saw manufacturing employment decline 1.5 percent annually, 7.1 percent overall. Non-right-to-work states, however, faced even sharper declines: averaging 3.0 percent annually and 13.7 percent over the five-year period. Every non-right-to-work state but one, Alaska, lost manufacturing jobs during that period, while five right-to-work states registered at least modest gains in this area.[9]

It will come as no surprise to most readers that Michigan’s record for manufacturing employment over the last five years is particularly disturbing: between 2001 and 2006 Michigan manufacturing employment declined an average of 4.6 percent per-year, or by a total of 20.9 percent over the whole five-year period.[10]

Graphic 3 - click to enlarge

The decline in manufacturing employment is occurring nationwide and has been underway for nearly 30 years; large statewide gains in manufacturing employment are unlikely even with the best economic policies. But given Michigan’s status as one of the most heavily industrialized states in the union, with 14.9 of Michigan’s workforce in manufacturing compared to the national average of 10.2 percent, Michigan has a particular interest in preserving manufacturing employment as much as possible, an area where states with right-to-work laws appear to have a distinct advantage.[11]