Is sustainability driving the uptick in U.S. manufacturing jobs?

U.S. manufacturing — and the jobs that go with it — have been steadily increasing since 2010. As President Obama mentioned during January’s State of the Union address, the U.S. economy added 568,000 new manufacturing sector jobs between January 2010 and December 2013. Meanwhile, industry — of which manufacturing is the largest component — reduced its energy-related CO2 emissions (PDF) by 2 percent between 2010 and 2012. Whether the resurgence of U.S. manufacturing jobs continues depends on a range of factors — including environmental initiatives.

The interaction of U.S. labor and environmental policies was the subject of February's Good Jobs, Green Jobs Conference, a gathering of labor organizations, companies, policymakers, and environmental groups in Washington, D.C. While the future of U.S. manufacturing jobs is uncertain, one major message came through loud and clear: energy-efficiency and clean-energy investment can help ensure that this sector continues to thrive.

To understand the future prospects for continued U.S. manufacturing jobs growth, it is first useful to review the drivers of the recent resurgence.

Which subsectors are driving U.S. manufacturing jobs?

Cars, trucks and related subsectors have led the recent resurgence of U.S. manufacturing jobs. The three subsectors that generated the most manufacturing sector jobs between 2010 and 2013 were fabricated metal products (forging, stamping, bending, forming or machining purchased metal into products), transportation (largely composed of cars and trucks) and machinery manufacturing. Each sector added more than 100,000 jobs between 2010 and 2013. This week’s call by President Obama for a new round of efficiency and carbon pollution standards for trucks will help to drive continued resurgence in U.S. transportation manufacturing subsectors.

While some industries lost jobs — namely, the printing, apparel, and pulp and paper manufacturing subsectors — data from the Bureau of Labor Statistics (BLS) shows that the U.S. manufacturing sector overall gained 568,000 jobs between 2010 and 2013, which is equivalent to 5 percent growth.

The figure below shows that this recent resurgence began to reverse more than 10 years of rapid U.S. manufacturing sector job losses.

 

How do environmental improvements affect these jobs?

New technology innovations and investments serve as a double-edged sword for manufacturing jobs. On the one hand, automation and advanced robotics can displace current workers as looms replaced textile artisans in 19th century England. On the other hand, efficiency-improving investments and innovations can preserve and in some cases create jobs through increased economic competitiveness.

The job-creation effects of energy efficiency have been documented in multiple studies (PDF). One U.S. manufacturing subsector example is pulp and paper mills. WRI’s facility-level study of Midwest pulp and paper mills found that facilities could save $240 million per year in total energy costs by improving their performance to existing, Energy Star levels. These efficiency-derived savings could help preserve the 370,000 jobs associated with Midwest pulp and paper mills. Another study (PDF) of aggregate job impacts found that energy efficiency and solar energy generate more direct jobs than coal, natural gas and nuclear energy. These findings are consistent with an assessment from the National Academies of Science showing that U.S. industry cost-effectively could reduce its GHG emissions by 14-22 percent relative to baseline forecasts for 2020 by investing in energy efficiency and renewable energy.

Technology investment and efficiency improvements will help preserve jobs through facility survival, although net job-creation effects will vary by manufacturing subsector and production technology. The capital investment accompanying the recent manufacturing sector resurgence provides a unique opportunity for all manufacturing subsectors to increase competitiveness, jobs and production while reducing costs and environmental impacts.

In addition to industry action, energy efficiency and clean energy policies also can help support U.S. manufacturing sector jobs. Three examples illustrate the manufacturing jobs impacts of new federal energy and climate policies. Last year’s Shaheen-Portman bill would increase efficiency through model building energy codes, energy efficiency financing programs, introduction of a Sustainable Manufacturing Initiative and development of a voluntary Supply Star efficiency labeling program. A second policy example is President Obama’s 2012 Executive Order establishing a national goal of deploying 40 gigawatts (GW) of new combined heat and power (CHP) and waste heat recovery capacity by the end of 2020. Achieving the CHP target would help to further boost U.S. manufacturing jobs (PDF) while reducing environmental impacts. Finally, by promoting continued innovation and investment, this week’s presidential announcement of new fuel efficiency and GHG standards for medium and heavy-duty trucks can help maintain the competitiveness of U.S. auto manufacturers.

What’s the future for manufacturing jobs?

While U.S. manufacturing jobs are experiencing sustained growth through reshoring and reinvestment, their future is uncertain. Contradictory forecasts predict both growth and decline. PwC (PDF), for example, estimates that low-cost shale gas will help generate 1 million new U.S. manufacturing jobs through 2025. The U.S. Bureau of Labor Statistics (BLS) presents a less sanguine forecast. The BLS projects that the U.S. manufacturing sector will lose 550,000 jobs by 2022 — nearly a complete reversal of the recent resurgence. The figure below details the subsector distribution of those changes. Previous BLS projections of U.S. manufacturing jobs decline have not borne out over the past four years, but these projections do reflect growing technology displacement concerns regarding mixed jobs impacts of the ongoing resurgence.

The future of U.S. manufacturing jobs is not set in stone — it will be highly influenced by company investments and new policies. As policymakers, private companies and industry stakeholders turn their attention to the ongoing resurgence of U.S. manufacturing, policy and private sector programs are available to generate the Good Jobs, Green Jobs needed to sustain American prosperity.

The story originally appeared at the WRI Insights blog. Top image by Andrey_Popov via Shutterstock