The internet is reshaping the manufacturing sector

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

As we saw earlier, several industries have seen a significant decrease in job numbers, and manufacturing is among them.

According to data provided by the U.S. Census Bureau on their County Business Patterns page, the decrease can be seen in almost every state.

There are several states (including Washington, D.C. and Virginia) where there were two times fewer manufacturing jobs in 2012 than there were in 2000. The only states that witnessed an increase in job numbers are easily seen on the map: Nevada and Alaska (additionally, there has been no change in Wyoming.). However, even in these states only experienced a 5 percent growth.

There are many types of businesses classified as manufacturing businesses by the North American Industry Classification System, but just four of them constitute at least 1.5 percent of all manufacturing jobs — we will now take a look at their dynamics.

emp_by_sub_Manufacturing

Interestingly, the largest category (commercial printing) also saw the most significant decrease not only in absolute terms but in relative terms as well, decreasing by 40 percent from 2000. It is followed by plastics product manufacturing, which declined by 30 percent. In total, these two types of businesses lost nearly 400,000 jobs during the 12 years.

While the decrease in commercial printing can likely be attributed to the falling popularity of newspapers, the question remains whether this has had any effect on wages. Below is a figure representing the change in annual payroll for the aforementioned business types.

avg_by_sub_Manufacturing

Here we can see that the two major types exhibit different changes — while CPI-adjusted annual salaries decreased by 8 percent for commercial printing businesses, wages for plastic product manufacturing businesses actually increased by 5 percent. While the cause remains unknown without further exploration, the data suggests that more low-paid jobs are being cut in the latter industry.

Discuss this article on our forum with over 1,900,000 registered members.

About Andrey Kamenov

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

Andrey Kamenov is a data scientist working for Advameg Inc. His background includes teaching statistics, stochastic processes and financial mathematics in Moscow State University and working for a hedge fund. His academic interests range from statistical data analysis to optimal stopping theory. Andrey also enjoys his hobbies of photography, reading and powerlifting.

Other posts by Andrey Kamenov:

One thought on “The internet is reshaping the manufacturing sector”

  1. A) Two years does not make a trend. B) was deep in the Recession, C) data from 5 years ago minimum so how relevant?

    Poor choice of data/study. Do one more up to date and over more years and maybe your article would be worth reading. Any sophomore college student should be able to tell you this isn’t statistically rigorous.

Leave a Reply

Your email address will not be published. Required fields are marked *