In the late 1940s America accounted for over half of global manufacturing output. By 2024 it accounted for little over a tenth, and imported $1.2trn more in merchandise than it exported. In real terms, America's factory output is over twice as high as in the early 1980s; the country produces more goods than Japan, Germany and South Korea combined. America's factories would, on their own, rank as the world's eighth-largest economy.
Whereas almost a quarter of American workers were employed in manufacturing in the 1970s, less than one in ten is today. Half of "manufacturing" jobs are support roles such as human relations and marketing, or professional ones such as design and engineering; less than 4% of American workers actually toil on a factory floor. In the 2000s alone America shed nearly 6m factory jobs. Even Germany, Japan and South Korea, which run large trade surpluses in manufactured goods, have seen steady declines in manufacturing employment. China shed over 20m factory jobs from 2013 to 2023—more than the entire American manufacturing workforce. The IMF calls this trend "the natural outcome of successful economic development".
In the early 1980s blue-collar assemblers, machine operators and repair workers made up more than half of the manufacturing workforce; today they account for less than a third. White-collar professionals outnumber blue-collar factory-floor workers by a wide margin. Unionisation in manufacturing has fallen from one in four workers in the 1980s to less than one in ten today.
Average pay for a production worker in America is more than twice the level in China and nearly six times that in Vietnam. Despite those wages, a fifth of factories surveyed by the Census Bureau said they could not get the workers they needed to operate at full capacity. Foreign bosses hoping to manufacture in America lament the paucity of skilled welders, electricians and machinery operators.
By the 1980s manufacturing workers still earned 10% more than comparable peers in other parts of the economy. By 2024 the manufacturing wage premium had more than halved since the 1980s. For those without a college education, the premium has disappeared entirely, even though such workers still enjoy a premium in construction and transport. Factory-floor work now lags behind non-supervisory roles in services on hourly pay. Productivity growth in manufacturing has also fallen: output per industrial worker is now rising more slowly than per service-sector worker.
Robert Lawrence of Harvard estimates that eliminating America's $1.2trn goods-trade deficit through reshoring would create around 3m jobs, half on the factory floor—lifting manufacturing's share of the workforce by barely a percentage point. At an assumed 20% average effective tariff on $3trn in imports, the cost would be about $200,000 per manufacturing job "saved". Over 7m Americans work in the skilled trades (carpenters, electricians, solar-panel installers); the median wage is $25 an hour, unionisation is above average, and demand is expected to rise as America upgrades its infrastructure. Another 5m work as repair and maintenance workers—HVAC technicians, telecom installers—and mechanics, earning wages well above the factory-floor average. Dani Rodrik of Harvard argues the task is to boost productivity in the jobs that are actually growing, perhaps through AI adoption.
Many manufacturing inputs come from abroad—industrial chemicals used in adhesives, coatings and plastics for cars, or active pharmaceutical ingredients for medicines—and Trump's tariffs have driven up their cost. About half of American imports directly support domestic manufacturing, and hence American exports. The USMCA, a free-trade deal that has shielded many manufacturers relying on cross-border supply chains from the worst of the tariffs, is up for review later in 2026.
One exception to the broader manufacturing slump is computer equipment, especially semiconductors, which have boomed owing to the data-centre build-out. Semiconductors have been carved out from Trump's "reciprocal" tariffs on specific countries.
From 2019 to 2025 manufacturing jobs fell as a share of the workforce on every continent except Africa, according to the International Labour Organisation. The pace of decline has been slightly faster in the 2020s than in the preceding three decades.
Globally, manufacturing provides 20m, or 6%, fewer jobs than in 2013, even as output has increased 5% by value. China's 29% share of global manufacturing value-added is a function of its size rather than its strategy; its workforce share in factories corresponds to America's at a similar level of prosperity. China's goods exports have grown by 70% relative to global GDP since 2006, but they have fallen by half as a share of the Chinese economy. Factories in America, Germany, Japan and South Korea together add more value than those in China.
India's manufacturing output as a share of GDP languishes about ten percentage points below Narendra Modi's target of 25%, but that has not stopped the economy growing at an impressive rate. The war in Ukraine shows that a wartime economy can innovate and multiply production volumes remarkably fast, suggesting that countries at peace need not develop all-purpose manufacturing capacity for the sake of war-readiness.
In 2023 there were 295 industrial robots for every 10,000 manufacturing workers in America, up from 255 in 2020, according to the International Federation of Robotics. That was dwarfed by China's 470 and South Korea's 1,012.
Annualised spending on factory construction doubled, adjusting for inflation, over the four years to 2025, spurred by subsidies for chips and green technologies. Many projects, however, have been mired in delays. A 2023 paper by Austan Goolsbee and Chad Syverson of the University of Chicago's Booth School of Business found that productivity in the construction sector, measured as output per worker, had fallen by two-fifths from its peak in the 1960s. The authors blamed excessive regulation, NIMBYism and a lack of incentives to deliver projects on time.
Over half of the roughly 50,000 manufacturing facilities across America are more than three decades old; the average plant was built some 50 years ago. Much of the electricity grid was constructed in the 1960s and 70s and is at or near the end of its useful life. One in three bridges needs to be replaced or repaired, according to the American Road & Transportation Builders Association.
Nearly $1trn worth of research and development takes place in America each year, more than anywhere else.
America's early textile industrialisation owed much to pirated British technology and immigrant expertise. Samuel Slater, an immigrant from Britain who memorised the country's textile-machinery designs, established America's first cotton mills. Francis Cabot Lowell secretly replicated British power-loom technology.
By 1980 Ford and General Motors recorded combined annual losses exceeding $1.3bn (over $5bn in 2025 money), while Japanese car workers had become 17% more productive than American ones. In semiconductors, America's share of global production dropped from 57% in 1977 to just 40% by 1989, while Japan's share almost doubled, to 50%. Silicon Valley regained its edge not through protection but by pivoting to innovation, design and software development, and offshoring assembly to low-cost East Asian manufacturers, especially in China.
Even before Donald Trump's first term, three-quarters of American industries had become more concentrated than they were during the 1990s computer boom, exercising a drag on productivity. Corporate-lobbying spending has risen by almost two-thirds in real terms since the late 1990s.
The five biggest companies in America average just 39 years old, and are all technology firms. By comparison, the five biggest companies average 84 years old in Japan, 116 in Britain, 120 in Germany and 152 in France.
Just because he's dead is no reason to lay off work.