Macro Hive Conversations With Bilal Hafeez Ep. 331: Gordon Hanson on US Manufacturing Fetishisation, Job Loss, and the Middle Class
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Oct 23, 2025 Gordon Hanson, a Harvard expert on labor markets and globalization, dives into America’s longstanding obsession with manufacturing. He discusses how manufacturing jobs have historically paid well for non-college workers and the regional inequalities stemming from factory closures. Hanson explores the debate on whether deindustrialization results from globalization or automation, and highlights the potential of non-manufacturing sectors like construction and healthcare to create good jobs. He also advocates for targeted local policies over tariffs for economic revitalization.
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Manufacturing's Historic Role In Good Jobs
- Manufacturing historically combined productivity and high wages for non-college workers.
- Its employment decline disproportionately squeezed middle earnings and regional economies.
Scale Economies Link To Higher Wages
- Large firms with scale economies often pay higher wages through profits and career structures.
- Market dominance in manufacturing and big firms enables better pay for non-college workers.
Clustering Intensifies Regional Impact
- Manufacturing clusters because buyers and suppliers locate near each other, creating regional concentrations.
- Plant closures ripple through local supply chains, amplifying regional decline.
