In April, President Donald Trump promoted his strict tariff strategy as a catalyst for the reshoring for manufacturing employment. Now, eight months onward, advancements in bringing jobs back are absent.
TL;DR
- President Trump's tariff strategy has not boosted manufacturing employment as promised, with job losses continuing.
- Tariff uncertainty discourages businesses from expanding staff, leading to reduced payroll expenses and slower decision-making.
- Shrinking manufacturing jobs may also stem from a skills mismatch, despite resilient job advertisements.
- Attracting and retaining skilled workers remains a primary difficulty for manufacturing firms.
Last week's jobs report from The Bureau of Labor Statistics indicated that although nonfarm employment grew by 119,000, manufacturing positions decreased by 6,000, further contributing to the 59,000 factory positions eliminated since Trump's April pledges to boost domestic production. The Labor Bureau's figures align with The Institute for Supply Management's November report, which showed manufacturing employment shrinking for an eighth straight month.
“The US is losing blue-collar jobs for the first time since the pandemic…as manufacturing industries lose jobs at a rapid pace while growth in construction & transportation has nearly zeroed out,” economic commentator Joseph Politano noted in a LinkedIn post last week.
In a frozen white-collar job market, manual labor and industrial positions have been seen as a safe haven not only by Gen Z but also by restless white-collar employees more generally. However, a reduction in factory positions suggests that career opportunities in this low-fire, low-hire market could be less promising than some employees had expected.
The diminishing manufacturing prospects, which were supposed to alleviate domestic labor challenges, are paradoxically a consequence of Trump’s erratic tariff strategy aimed at reviving factory employment, as stated by Laura Ullrich, the director of economic research at the Indeed Hiring Lab.
“It is striking how soft manufacturing has been because in theory, you put tariffs in place to protect domestic manufacturing, so that domestic manufacturing employment grows,” Ullrich told Coins2Day. “And we have seen the opposite of that.”
Tariff troubles
Ullrich points to the uncertainty introduced by tariffs as a factor in the shrinking manufacturing industry, explaining that this has discouraged businesses from expanding their staff. In a September memo to clients, Pantheon Macroeconomics researchers Samuel Tombs and Oliver Allen attributed shrinking wage growth U.S. Businesses impacted by tariffs as they attempt to preserve profits by reducing payroll expenses. Likewise, Ullrich contended, businesses dealing with new unknowns typically prioritize stability over expansion.
“Oftentimes when there is heightened uncertainty, it’s just difficult for businesses and people to make decisions in real time,” she said. “And so that slows down employment. It slows down all those processes.”
Certainly, the vast majority of employment opportunities—excluding those in healthcare and the leisure/hospitality industry, which continue to grow and encompass numerous manual labor positions—have seen no growth because of financial instability, Ullrich pointed out, yet manufacturing positions might face an additional risk stemming from trade duties.
The tariffs imposed by Trump have affected components, which are items utilized in the manufacturing of a completed product. These duties have increased expenses for materials and manufacturing, potentially deterring employment. A study released this month in the American Economic Journal: Economic Policy discovered that throughout President George Bush's second tenure in 2002, his tariffs on steel failed to boost employment in local steel production, but instead harmed it, even long after the duties were rescinded.
“When you tax the intermediate goods, that’s going to manufacturers directly,” Ullrich said. “That’s part of what we’re seeing.”
Labor mismatch
The most recent employment figures don't fully capture the situation in manufacturing. Ullrich referenced information from Indeed indicating that advertisements for manufacturing positions have remained resilient, even as the industry shrinks. She stated that although there are fewer available positions, the sector continues to experience a lack of individuals possessing the necessary qualifications for manufacturing roles.
“Some of the declines in blue collar employment could be about labor demand going down,” Ullrich said. “But it also could be about labor supply shortages and a mismatch between the skills the jobs that are available and the skills that people have to fill those jobs.”
Earlier this month, Ford CEO Jim Farley expressed concern during an episode of the Office Hours: Business Edition podcast, noting that Ford had 5,000 open mechanic roles, some earning $120,000, remained unfilled positions. A 2024 survey conducted by The Manufacturing Institute and Deloitte, surveying over 200 manufacturing firms, revealed that more than 65% of these businesses identified attracting and keeping employees as their primary difficulty.
It's possible, therefore, that even with a reduced number of manufacturing positions available presently, seeking out vocational expertise might prove beneficial in securing employment. The number of students enrolling in vocational institutions and courses has been increasing nationwide, indicating that younger generations aren't abandoning aspirations for manufacturing careers in the immediate future.
“More kids are realizing they can go out and earn a great living with an amazing career and making very good money,” Matt Scott, a welding instructor at Portland Community College in Oregon, told KATU in July.