EconoFact Chats Can Manufacturing Still Provide Inclusive Growth?
May 11, 2025
Robert Lawrence, the Albert L. Williams Professor of International Trade and Investment at Harvard Kennedy School, dives into the decline of manufacturing jobs and its impact on those without college degrees. He discusses whether this decline is a natural evolution of economies and if manufacturing can still offer pathways to stable employment. Lawrence emphasizes the importance of policies like training programs and wage insurance to support job mobility and foster inclusive growth, all while considering the critical role of manufacturing in national defense and technology.
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Manufacturing Employment Curve
- Manufacturing employment follows a universal hump-shaped curve across countries, rising then falling as economies evolve.
- This trend mirrors the earlier shift from agriculture to manufacturing seen over a century ago.
Agriculture and Manufacturing Parallels
- Employment in agriculture declined while food output rose sharply due to productivity growth.
- Similarly, cheaper manufactured goods today drive increased spending on services, shaping employment shifts.
Manufacturing Enabled Inclusive Growth
- Manufacturing once provided millions of non-college educated men middle-class wages and career ladders.
- It also fostered regional income convergence and opportunities for minorities through migration to industrial cities.