Millennials Are Bolstering The Manufacturing Industry

Lawren Henderson
Staff Writer at Cluster

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The “Millennials Are Killing (blank)” hot takes have become a cottage industry unto itself, with the generation born between 1981 and 1996 blamed for the demise of everything from cable television to diamonds, beer, casual dining, and even cereal. But as these now 20 and 30-somethings become a larger percentage of the national workforce, they are breathing new life into an industry long written off as dead – manufacturing – transforming the sector with highly-skilled and educated engineers, and rebranding the image of the traditional manufacturing worker.  

A Pillar of the American Economy Falls  

The term “manufacturing worker” likely conjures images of blue collar laborers machining aluminum in a factory, assembling car parts in a plant, or steering forklifts in a warehouse. These hands-on industrial jobs played a significant role in America’s economic rise throughout much of the 20th century. The post-war era saw manufacturing employment climb steadily and peak at over 19 million in 1979. From there it trended downward, then dove off a cliff at the turn of the millenium. The Great Recession (2007-2009) only accelerated the collapse.

All told, from 2001 to 2009, manufacturing lost an astounding 4.576 millions jobs or 28% of its total workers, far more than any other sector. Construction trailed behind with 793,000 (11%) jobs disappearing over the same time period, while information saw 784,274 (22%) jobs vanish into thin air. To put it in perspective, manufacturing shed more jobs than all other losing sectors (information, construction, admin & support, utilities, retail trade, transportation and warehousing, real estate, wholesale trade, finance and insurance, agriculture) combined!

The number of Americans working in manufacturing has declined from 1979 to the Great Recession.

Scholars have spilled terabytes of digital ink trying to explain the annihilation of a workforce that employed one in three Americans in 1953. Today, it’s less than one in ten. But as they say on the Iron Islands of Westeros, “What is dead may never die,” and with Millennials forecast to comprise half of the American workforce by 2020, we’re seeing manufacturing “rise again harder and stronger.”

Rise of the “Smart Collar” Worker

To be fair, while manufacturing employment plummeted from 1979 to the end of the Great Recession, productivity never followed the same trajectory. 2017 data from the BLS shows manufacturing output at 80% above its level 30 years ago as Americans now produce far more with dramatically fewer workers.

Powering this output is, of course, technology. And increasingly, as modern manufacturing grows ever more high-tech, dependent on advanced robotics and artificial intelligence, the industry is creating a new labor category of “smart collar” workers. These engineers, who are more often than not Millennials, possess manual prowess, superior technology acumen, and a postsecondary degree or two or three. They’re building rocket ships to blast civilians into space, designing electric airplanes to reduce carbon emissions, developing intelligent systems for self-driving cars, and conducting an orchestra of autonomous robots on factory floors.

California consistently ranks as one of the top manufacturing states in the country, and its top manufacturing job posters in 2017 were Tesla, Northrop Grumman, General Atomics, Lockheed Martin, and SpaceX. If you research any of their career pages you’ll find that their openings are dominated by engineering positions. Millennials are the most educated generation participating in the labor force with about four in ten holding a bachelor’s degree or higher. Compare that with just three in ten for Gen X. While the issue of crippling student debt is a major cause of concern among the younger generation, ultimately, it’s good that they secured that diploma as it’s forecasted that 65% of all jobs in the economy will require a higher education degree and training beyond high school by 2020. And that too goes for manufacturing. Once a reliable place where high-school grads could turn to land a good paying job, by 2020, 53% of manufacturing jobs will require a postsecondary education.

Manufacturing jobs have always paid a compensation premium relative to other sectors in the form of higher wages and benefits. But that premium has been slowly eroding since the 1980s. During the 90s, it fell from 17.3% to 15%, then down to 13.5% during the aughts. But after the Great Recession something remarkable happened, the premium ticked back up to 15% over the course of the 2010s. We’ve entered an era where manufacturing companies must offer more attractive compensation in order to lure highly-skilled and educated engineers to fill smart collar roles.  

Following the Great Recession, total employment within the sector mounted an incredible comeback. It rebounded off an all-time-low 11.5 million jobs at the start of 2010 and climbed to 12.8 million jobs in July 2019. The twin sirens of high wages ($30.52/hr in 2017) and the opportunity to work on cutting-edge, high-tech projects are drawing Millennials to manufacturing and catalyzing employment growth in the once moribund sector.

The number of Americans working in manufacturing has trended upward since the Great Recession.

Millennials take a lot of heat for allegedly driving a host of traditional industries to the brink of extinction. But when it comes to manufacturing, these digital natives are using their high educational attainment, tech savvy skills, and passion for creative ventures to reshape and evolve an entire sector. And evolution is the key to survival.

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Published on
August 27, 2019