The Decline & Fall Of Manufacturing in America

[searcher]

I remember a time when you could graduate high school or get out of the service, get a job with a big company, work your way up (on the job training, apprenticeships, extra schooling, etc.) and make a good living that would support you and your family, allow for a nice vacation, you'd have money for your kids education and save for retirement. It was a time when companies had some loyalty towards their employees and vice versa. Those days seem long gone.

This is a subject I enjoy talking about so I figured I start a thread on it. Going to start off with a question I asked Grok and progress from there. Feel free to chime in. Different opinions, perspectives and personal experiences are all welcome.

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What caused the decline and fall of manufacturing in America?


The decline of manufacturing in America is a complex story, driven by a mix of economic, technological, and policy factors that unfolded over decades. Here’s a breakdown of the key causes, based on available data and analysis:

1. Globalization and Trade Policies: Starting in the late 20th century, trade liberalization—through agreements like NAFTA (1994) and China’s entry into the WTO (2001)—opened U.S. markets to cheaper foreign goods. Imports from low-wage countries, particularly China, surged, with the U.S. trade deficit in manufactured goods ballooning from $19 billion in 1992 to $419 billion by 2006. This competition hit industries like textiles, electronics, and steel hard, as companies moved production to countries with lower labor costs. For example, China’s manufacturing output grew from 3% of global production in 1990 to over 20% by 2015, while the U.S. share dropped from 22% to 17%.
2. Automation and Technological Advances: Manufacturing productivity soared due to automation, robotics, and computerization. Between 1987 and 2017, U.S. manufacturing output grew by 80%, but employment in the sector fell by 25% (from 17.6 million to 12.4 million jobs). Machines replaced repetitive tasks, particularly in assembly lines, reducing the need for low-skill workers. While this boosted efficiency, it hollowed out jobs in regions dependent on manufacturing, like the Rust Belt.
3. Decline in Union Power: Unions, which once secured high wages and benefits for manufacturing workers, weakened significantly. In 1983, 20% of U.S. workers were unionized; by 2020, that figure was under 11%. This reduced workers’ bargaining power, making it easier for companies to cut costs by relocating or outsourcing. Weaker unions also meant less political clout to push for protectionist policies.
4. Corporate Strategies and Offshoring: U.S. companies, chasing higher profits, offshored production to countries with cheaper labor and fewer regulations. For instance, by 2010, over 40% of goods sold by U.S. firms were produced abroad, up from 10% in the 1970s. This was driven by shareholder pressure for cost-cutting and the rise of global supply chains, which prioritized efficiency over domestic production.
5. Policy and Investment Shifts: U.S. policy often failed to counter these trends. Tax incentives and deregulation in the 1980s and 1990s encouraged offshoring, while investment in workforce training and infrastructure lagged. Other nations, like Germany, invested heavily in vocational training and industrial policy, maintaining stronger manufacturing sectors. The U.S. also underfunded R&D relative to competitors—federal R&D spending as a share of GDP fell from 1.2% in 1980 to 0.7% by 2018.
6. Economic Shifts to Services: The U.S. economy increasingly shifted toward services and tech, which offered higher margins and growth. By 2020, manufacturing accounted for just 11% of U.S. GDP, down from 16% in 1990, while services grew to 80%. This reflected consumer demand and higher profitability in sectors like finance and tech, pulling investment and talent away from manufacturing.
7. Regional and Social Impacts: The decline wasn’t uniform. Midwest and Northeast industrial heartlands—like Michigan, Ohio, and Pennsylvania—lost millions of jobs, leading to economic stagnation and social challenges, including opioid addiction and population decline. Between 2000 and 2010, 5.7 million manufacturing jobs vanished, with 2.7 million tied directly to the China trade shock.

Counterpoints exist: some argue the decline is overstated, as U.S. manufacturing output remains high (second globally behind China), and automation-driven job losses reflect progress, not failure. Others note recent reshoring trends, with 1.3 million jobs brought back since 2010, spurred by rising foreign wages and supply chain disruptions. Still, the combination of global competition, automation, weak policy support, and corporate priorities reshaped the sector, leaving lasting economic and social scars in many communities. If you want me to dive deeper into any specific aspect—like trade data, automation stats, or regional impacts—let me know.

 

[searcher]

This is pretty long (different chapters) and is about the Phila area.

Philadelphia's Industrial History: A Context and Overview

 

[searcher]

Labor Movement - America, Reform & Timeline | HISTORY

The labor movement in the United States emerged from the artisans of the colonial era and gained steam with the wides...

www.history.com

Labor Reforms: The Rise of Unions in the Progressive Era

Explore the rise of labor unions during the Progressive Era and their impact on workers' rights, economic change, and social justice movements.

www.usahistorytimeline.com

The History of Unions in the United States

Sustained trade union organizing began in 1794. They've gained important protections for workers, but they haven’t always welcomed women, Black workers, and immigrants.

www.investopedia.com

 

[searcher]

Reshoring of Manufacturing Is Happening, But It’s No Short-Term Fix

Reshoring of manufacturing is no overnight cure for current pain: It involves multiple considerations and commitment to an expensive, multi-year undertaking.

www.supplychainbrain.com

 

[Joe King]

Monetary inflation is the root of the problem.

The over supply of dollars for Decade after Decade, took its toll by constantly increasing the costs of production.

Had the monetary system been properly managed, gold could still be $20.67/oz.

 

[Joe King]

Ultimately, the blame lies at the feet of We The People who (mostly) and ignorantly allowed it all to happen.

 

[SilverStacker]

go to 0250 LOL

 

[searcher]

Post in thread 'Tracking Trump's Tariffs and Turbulent Trade Talks'

Sep 24, 2025

Tariffs and Deportations – Will They Revive U.S. Manufacturing?​

The good news: Tariffs can increase overall U.S. manufacturing employment in the long run. The bad news: Tariffs are likely to reduce U.S. manufacturing employment in the short term, and to cause more reallocation of workers across individual sectors than bring overall employment growth.

Moreover, employment could fall sharply in the short run and remain depressed for many years before it eventually recovers, due to supply-chain adjustment frictions.

That’s the conclusion from Joseph B. Steinberg, in his recent paper...

• searcher

 

[Casey Jones]

Another reason was the militancy of trade unions in industrialized regions.

Detroit was an industrial powerhouse. In 1946, it had the highest per-capita income of anywhere in the nation. And the unions played a part in that.

Not a nice part. Remember the stories of union battles, between the UAW (Walter Reuther as head) against the Ford Service Department (Old Henry's goon squad, headed by former boxer Harry Bennet)? Reuther got his head broken, badly. Other men were beaten, and uncounted numbers, fired. I haven't read up on the history of GM organization, but I doubt it was a friendly process.

So...that was the start of auto manufacturing decentralization. Oh, yeah, there were regional Model T plants before that - because of the cost of shipping completed cars. But as cars became more complex, the decentralization accelerated - rather than centralized.

Outfits with a decreasing market share - like Studebaker - were suddenly at a disadvantage. They had one plant, South Bend. A strike could destroy the company. So, especially since Packard management bought them in 1953, and after Packard's plant was shut down (long story there) the financiers running Studebaker-Packard just gave the union what they demanded.

Until they couldn't, anymore - 1963. The union contract was up; UAW called a strike; the company instead just shut down the American plant. It kept a small-scale Canadian plant (non-union) running, making one model of Studebaker...this to avoid legal claims by dealers. Studebaker intended to keep going, just not as a car company.

Nor as a unionized company. One subsidiary they had was Gravely Tractors. Dunbar, West Virginia - they bought it from the founder's heirs. West Virginia was a union region - UMW - and of course the UAW had no trouble organizing. Nor with Benjamin Gravely, the founder. He was a forward-thinking entrepreneur.

Studebaker management saw unions as trouble. Once they finished shutting down the South Bend operation, they took the axe to Gravely. They opened a new plant in North Carolina, did NOT offer any transfers, and moved all work there.

It backfired, because a defense contractor opened a nearby plant, driving wages for skilled metalworkers much higher. In the end, they were paying MORE for skilled labor than in West Virginia - and lost all the knowledge and experience. Quality fell so greatly, in the end, they stopped making their own tractor engine - the Gravely engine was a torquey, slow-revving lugger, perfect for a small tractor - and started using Kohler engines. That revved high, had only splash lubrication, and characteristics not suited to Gravely's power attachments. It was the beginning of the end for Gravely; and Studebaker-Worthington itself just contracted into takeover by Wagner Electric.

But, to the subject, those were the first steps towards what we now call "outsourcing." Moving plants to rural areas - which may be wholly unsuited for the industry; which may have social or other problems in maintaining discipline and quality output - but which cut the labor costs.

Mexico has been A Thing since after WWII. Willys, later Kaiser, built a Jeep plant in Mexico. The Mexican government demanded part ownership; and old Henry Kaiser, for some reason, acquiesced. That was the start of VAM - American Motors wound up owning Kaiser's share; and VAM made AMC products; but those were not imported to the States. They had a few unique models and one unique engine - but engineering and design ideas were sometimes sent North. Putting the heavy AMC six into an XJ was a VAM idea.

But for the most part, Mexican quality remained suspect. VW made a full line of products in Mexico; but only "The Thing" came north. Today, I'm told, Mexican Beetles, even well-cared for, are suspect. Don't buy one, a local VW expert says. You're better off with a 50-year-old German model.

What changed, IMHO, was when financialists took over various industries; when quality, all of a sudden, stopped mattering.

The trend towards Financializing industry had started in the 1980s - the fictional Gordon Gekko illustrated the archetype of a Yuppie who moved money around, doing little else - but a whole generation of young people saw that as the ideal. THEN...Bubba Priapic went and kicked open the door to CHY-nuh!

The whole point of trade and tariff laws, was to prevent the nation from being flooded with slave-labor products. Which of course was why that deviate rotter had to contravene those laws! Destroy American industry, and make his totalitarian idols richer!

It's just been a steady stream of moving manufacturing of products to cheap places, since. China was a natural target - they were advanced enough they HAD plants, and COULD manufacture...something. Not a high-quality thing; but some semblance. They could quickly change specifications or designs. Not while preserving quality...not while offering quality.

But what mattered was, to the Financialists, was, low wholesale price. What mattered to the Globalists and the Clintons was, approval of their totalitarian masters.

It just keeps on going - this game doesn't stop until this society collapses. And we're close; but of course the Elites don't want to hear it, don't want to see that it's happening.

 

[Fatrat]

The "Greed is Good" Gordon Gekko types, the corporate raides looting land and pension funds destroying companies didn't help.