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A Look at Current Manufacturing Employment Trends in California

Posted by Ellen McKewen on Dec 30, 2014 1:18:08 PM

Person_WeldingAs we emerge from the Great Recession, we are growing increasingly optimistic about our job prospects as engineers, software developers, technicians, designers, and so forth. Some of our media outlets paint a hopeful picture of our evolving job market, while others put forth a more depressing outlook – which may confuse some in their economic expectations and business plans.

So, which way is it and what do we have to look forward to?

We would like to provide you with some of the most up-to-date, credible facts and statistics about California manufacturing employment trends based on a 2014 comprehensive research study conducted by Los Angeles Economic Development Corporation.

The manufacturing business model has turned the tide

The manufacturing landscape has gradually transitioned from predominantly factory manual labor to automated manufacturing processes over the past several decades. Therefore, cost-effective computing, electronic devices, and mechanical equipment have replaced a lot of the manpower that used to physically engage in mass production and quality control systems. 

This evolution has changed the demand for the type of knowledge and skills needed in mass production plants and facilities. Most manufacturers now look mostly for engineers and technical specialists who have expertise in mathematics, physics, chemistry and other material sciences.

Automated manufacturing processes generate a far greater efficiency of production than manual labor because the equipment operates at a faster pace than humans and it doesn’t take smoke breaks, meal breaks, or vacations. In many cases where manual labor is needed, manufacturers tend to out-source it to Asian and South Asian countries when it becomes cost-prohibitive to keep manual labor on-site.

The Hard Stats

This is not to say that machines are completely taking over – but it does mean California manufacturing employment on the decline. From 1990 to 2012 (the most recent year for which reliable research data is available), California’s manufacturing jobs decreased by nearly 40 percent – which is a loss of 842,180 jobs. The bulk of this decline came from non-durable goods manufacturing, which was either largely automated or off-shored. Cuts in national defense spending in the 1990s also significantly impacted California in that durable products produced by state aerospace and defense industries had to be reduced. 

Despite the reduction of California manufacturing jobs, there were 248,000 California manufacturing job openings as of February 2014. So, all hope isn't lost. Further, demand for manufacturing hasn’t gone down. On the contrary, manufacturing output and consumption has increased as the industry became more automated, streamlined, and off-shored. On a national scale, the manufacturing sector comprises 12.3 percent of the U.S. GDP and 9 percent of employment. National manufacturing product value doubled over the last 2+ decades – reaching $3.9 trillion in 2012.

California controls the largest market share of the national manufacturing GDP out of any other state -- coming in with 11.4 percent, followed by Texas with 10 percent. California’s manufacturing GDP has grown by 73 percent since 1998, which is more than twice the growth of the national manufacturing GDP. 

The California manufacturing industry consists of 21 manufacturing sub-sectors, such as beverage and tobacco, petroleum and coal products, leather and allied products, chemical products, food, furniture, apparel, computers and electronics, and so forth. From 2010 to 2012, the only manufacturing subsector to have expanded its employment base was beverage and tobacco – 10,296 additional jobs. Petroleum and coal products lost 884 jobs, leather and allied products lost 2,060 jobs and at the bottom of the spectrum, apparel lost 38,284 jobs, and computer and electronic products lost 92,039 jobs.

However, more specific industries within these 21 California manufacturing sub-sectors have extended job opportunities. For example, the California food manufacturing sub-sector lost 6,030 jobs, but certain food manufacturing divisions within that subsector gained 7, 492 jobs from 2010 to 2012. The California chemical manufacturing subsector lost 4,131 jobs but pharmaceuticals and medicine industries gained 4,235 jobs.

If all of these statistics are any indication of the future, employment in California manufacturing plants most likely will continue to fall as technological innovation paves a road toward increasingly efficient manufacturing systems for maximum production.

However, the technical ingenuity and management skills of highly knowledgeable engineers and specialists will continue to be in high demand with manufacturers into the foreseeable future. Manufacturing looks especially bright for our millennials, who on average are more technologically savvy over previous generations. They are the future of our manfacturing industry. By 2029, all baby boomers will have turned 65 and would be on their way to retirement. By 2025, three-fourths of our workforce will consist of Millennials, so the technological development and production of manufacturers will be carried on and reinforced.

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Topics: Manufacturing

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