What Manufacturing Production Is Not Good For
Why chasing factory jobs for their own sake really is a dead end—and what policymakers should do instead. It is unions and social-insurance states, not assembly lines, that hold the key to global-north blue-collar prosperity in the 21st century…
I was rather annoyed at a piece from the Economist last month. But the piece did make one very good point:
Economist: The world must escape the manufacturing delusion <https://www.economist.com/leaders/2025/06/12/the-world-must-escape-the-manufacturing-delusion>: ‘Today’s zeal for homegrown manufacturing…. Politicians want to revive well-paying factory work and restore the lost glory of their industrial heartlands…. Politicians hope that boosting manufacturing means decent employment for workers without university degrees…. But factory work has become highly automated…. The good jobs created by today’s production lines are for technicians and engineers, not lunch-pail Joes. Less than a third of American manufacturing jobs today are production roles carried out by workers without a degree…. Bringing home enough manufacturing to close America’s trade deficit would create only enough new production jobs to account for an extra 1% of the workforce. Manufacturing no longer pays those without a degree more than other comparable jobs in industries such as construction…
However, it could have made it better. The point that manufacturing is now too automated for it to be a sizeable part of demand for blue-collar workers is 100% on. But it is only a small part of the story of why manufacturing-promoting industrial policy cannot be an appreciable part of solving income-distribution of blue-collar opportunity problems.
So let me expand:
Manufacturing jobs have typically and historically been crappy: physically taxing, repetitive, and often hazardous involving long hours in environments that are noisy, dirty, and sometimes dangerous. The tasks themselves are frequently routinized and offer little in the way of intellectual stimulation or autonomy. And the compensation for such work is determined by the impersonal forces of supply and demand in the labor market, not by any inherent dignity, social value, or romanticized view of the maker or craftsman. When there is a surplus of workers willing to take on these roles, wages stagnate or decline, and the jobs remain “crappy” in the sense that they offer little if any more than alternatives in exchange for hard labor.
The notion that manufacturing jobs are inherently “good” is a myth rooted more in nostalgia than in the lived experience of most factory workers, especially in the absence of strong institutional supports.
Now not all manufacturing positions are created equal. The cigar-factory cigar-rolling jobs of Samuel Gompers were good jobs for the day. A minority of roles within the sector—typically those requiring specialized skills, technical expertise, or significant experience—can offer higher pay, greater job security, and more interesting work: think of tool-and-die makers, machinists, or practical engineers who optimize production lines on the sho[ floor. Such roles are insulated from downward wage pressure because the skills required are scarce, requiring substantial, training, apprenticeship, or a deep understanding of complex systems. Employers must thus pay more to attract and retain scarce talent. These positions might involve operating or maintaining complex machinery, overseeing production processes, or engaging in quality control and innovation.
The conditions under which manufacturing gives rise to what might be called “labor aristocracy” jobs—positions offering above-average pay, status, and security for blue-collar workers—have always been contingent on the broader economic and technological context of their era.
During the epoch of the Commercial-Imperial Economy, for example, the skilled operators of England’s stocking-frames under the Tudor, Stuart, and Georgian dynasties occupied a privileged niche. These artisans commanded respect and relatively high wages, not because of any inherent generosity on the part of employers or the state, but because their expertise was scarce and the machinery they operated was both valuable and difficult to master. Their bargaining power derived from the complexity of their craft and the limited supply of workers able to perform it. In this context, the labor market rewarded rare skill sets, and the resulting “aristocracy of labor” was a function of both technological constraints and institutional arrangements that kept entry into these trades tightly controlled.
The advent of the Industrial Steam-Power Economy in the nineteenth century radically altered this balance. The rise of mechanized production meant that machines could increasingly substitute for skilled hands, transforming the nature of work on the factory floor. Tasks that once required years of apprenticeship could now be performed by unskilled or semi-skilled workers, guided by the rhythms of the machine rather than the judgment of the craftsman. This shift did not just deskill labor; it also compressed the working class into a more homogeneous proletariat, with fewer avenues for distinction or upward mobility based on skill alone. The “labor aristocracy” shrank as the premium on specialized expertise eroded, and the vast majority of manufacturing jobs became routine, repetitive, and interchangeable. The social structure of the industrial workforce flattened, and the economic rewards of manufacturing work became more closely tied to the brute logic of supply and demand for generic labor.
Subsequent epochs—each defined by their own technological and organizational revolutions—have continued to reshape this landscape of manufacturing employment and the “labor aristocracy”:
The Second Industrial Revolution Applied-Science Economy, driven by applied science and mass production, created new opportunities for technical specialists and engineers, but also further routinized the bulk of factory work.
The New-Deal Order Mass-Production Economy, with its emphasis on large-scale, unionized mass production, briefly expanded the ranks of “good” blue-collar jobs, but only under the unique institutional arrangements of the mid-twentieth-century North Atlantic.
The Neoliberal Order Globalized Value-Chain Economy, characterized by globalized value chains and relentless cost-cutting, eroded these gains by shifting production to lower-wage regions and automating what remained.
Today, in the Attention Info-Bio Tech Economy, the locus of economic value has shifted even further away from traditional manufacturing. The skills most highly rewarded are increasingly cognitive, creative, and technical, and the opportunities for blue-collar workers to secure “aristocratic” positions through manufacturing alone have dwindled to a vanishing point.
Each successive transformation has further undermined the notion that manufacturing, by itself, can serve as a stable foundation for broad-based working-class prosperity.
But there is a much more important factor than all of those: unions.
Unions have historically played a crucial role in transforming manufacturing jobs from “crappy” to “good.” The difference between a bad unskilled manufacturing job and a good semi-skilled one is a strong union—either in being, or as a union threat. The classic example is the United Auto Workers in the mid-20th century, who negotiated contracts that made assembly line work a ticket to the middle class. The presence of a strong union can turn even relatively low-skill, repetitive work into a stable and respectable livelihood.
The history of mass-production in America is intertwined with the rise of industrial unionism. Henry Ford’s famous $5/day wage was not an act of benevolence, but a calculated move to reduce turnover and stave off labor unrest, particularly from radical unions like the Industrial Workers of the World (IWW). Mass-production settings, with large numbers of workers concentrated in a single location, are more amenable to union organizing than dispersed, small-scale operations. Yet, even in these environments, unionization was never guaranteed and often depended on the broader political and legal context. The gains made by unions in the mid-20th century were the result of hard-fought battles, not the natural outgrowth of the production process itself.
The extent to which manufacturing jobs are unionized—and thus “good”—is predominantly a political question. Labor law, government enforcement, and the broader climate of public opinion all shape the ability of workers to organize and bargain collectively. In periods of pro-labor policy, such as the New Deal era, union density soared and manufacturing jobs improved accordingly. In more hostile environments, unions have been weakened or broken, and the quality of manufacturing work has declined. As DeLong has emphasized, the fate of the working class is not determined solely by economic forces, but by the outcome of political struggles over the rules of the game.
It’s not just manufacturing: the benefits of unionization and pro-worker policy can extend to a wide range of blue-collar and service sector jobs. When the political environment supports collective bargaining, minimum wage laws, and robust social safety nets, the floor for job quality rises across the board. Sectors like construction, transportation, and even retail can offer stable, well-compensated employment if workers have the power to demand it. The focus on manufacturing as the sole source of “good jobs” is thus misplaced; what matters is the institutional framework that governs all forms of work.
If the goal is to create more “good” jobs for workers without college degrees, the most effective lever is to strengthen unions and the rights of workers to organize. The evidence is clear: unionized workers earn more, have better benefits, and enjoy greater job security than their non-union counterparts. Policies that make it easier to form and join unions, protect collective bargaining rights, and penalize employer retaliation are essential to reversing the decline in job quality. The solution to the crisis of blue-collar opportunity lies not in nostalgia for a lost manufacturing golden age, but in rebuilding the institutions that once made those jobs desirable.
The era of mass employment in manufacturing is over, and it’s not coming back. Decades of technological progress have made it possible to produce more goods with fewer workers. Automation, robotics, and advanced manufacturing techniques have steadily reduced the demand for human labor on the factory floor. Even as output rises, employment falls—a trend that is likely to accelerate in the coming years. The hope that reshoring or industrial policy can restore the lost world of plentiful, well-paid factory jobs is a delusion. The future of work will be shaped by the relentless advance of technology, and the challenge is to ensure that the gains from productivity are broadly shared, rather than concentrated at the top.
If factories employing large numbers of unskilled blue-collar workers should come back to the U.S., the jobs they provide will be among the worst jobs in our economy.
Do put a tickler here, however: I do want to circle around to talk about why the rest of the piece did leave me annoyed.
References:
“The world must escape the manufacturing delusion”. 2025. Economist. <https://www.economist.com/leaders/2025/06/12/the-world-must-escape-the-manufacturing-delusion>
Autor, David H., David Dorn, and Gordon H. Hanson. 2016. “The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade.” Annual Review of Economics 8: 205–240. https://www.annualreviews.org/doi/10.1146/annurev-economics-080315-015041
DeLong, J. Bradford. 2017. “Where US Manufacturing Jobs Really Went.” Project Syndicate, May 31. https://www.project-syndicate.org/commentary/manufacturing-jobs-share-of-us-economy-by-j--bradford-delong-2017-05
Freeman, Richard B., and James L. Medoff. 1984. What Do Unions Do? New York: Basic Books. https://archive.org/details/whatdounionsdo00free
Houseman, Susan N. 2021. “Understanding the Decline of U.S. Manufacturing Employment.” In The U.S. Labor Market: Questions and Challenges for Public Policy, edited by Michael R. Strain, 69–110. Washington, DC: American Enterprise Institute. https://research.upjohn.org/up_workingpapers/287/