A Lesson About Manufacturing Jobs from Farming

There is a lot hand-wringing about the loss of manufacturing jobs. For example, a Google search for the term "loss of manufacturing jobs" shows 308,000 results. We have lost eight million factory jobs since 1979, and manufacturing employment is now at the lowest level since 1941. As a percent of the U.S. labor force, manufacturing jobs have fallen to only 8.92% of total jobs in 2010, which is about one-third of the 28% manufacturing share of all jobs as recently as the 1960s (see chart above). And yet manufacturing output is close to an all-time high.

People don't seem too concerned, at least not any more, about the loss of farming jobs. Do a Google search for "loss of farming jobs" and you'll only get about 171 results. And yet the loss of farming jobs in the U.S. economy has been much greater than the loss of manufacturing jobs, measured as a share of total jobs.

It happened over a long period of time, but farming jobs as a share of the U.S. workforce went from 90% in 1790 to only 2.6% by 1990 (see chart below, data here). Because of advances in farm technology and increases in farmer productivity, we can now produce more food than ever before with only 2.6% of our labor force working on farms. Just the single invention of the tractor eliminated something like 10 million farm jobs.

Bottom Line: The trend in manufacturing in the U.S. is following the same pattern as farming: we're able to produce more and more output in both sectors with fewer and fewer workers, due to technological advances and significant increases in worker productivity. We're much better off as a country with only 2.6% of our workforce in farming compared to having 90% of our population involved in farming, and we're also much better off as a country with only 9% of our workforce toiling in factories compared to having 20 or 30% of our workers employed in manufacturing.