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March 19, 2004

Report: New York one of only five states to see high-skilled manufacturing jobs decline

While manufacturing employment has dropped nationwide, New York was one of only five states to have lost high-paid manufacturing jobs over the last two decades, according to a report from the Federal Reserve Bank of New York.

The report, which analyzed the transition of the nation’s manufacturing sector from low-skilled to high-skilled labor, found that New York is one of five states to lose better-paid, high-skilled manufacturing jobs since 1983.

“Our analysis reveals that in all parts of the country the decline in manufacturing jobs since the 1980s has been accompanied by a shift in the remaining workforce composition toward high-skilled occupations, and away from mid-and low-skilled occupations,” the report said.

That shift helped almost every area in the country, including areas that saw severe manufacturing job losses, experience an increase in high-skilled manufacturing jobs since 1983.

Only five states saw a decline in the number of high-skilled jobs. From 1983 to 2002, New York experienced a 14.3 percent decrease in high-skilled jobs, the second highest of the five states. Only Hawaii, with 40.7 percent, lost more. Connecticut, Virginia, and New Jersey fared better than New York with high-skilled job losses of 10.3, 8.5, and 4.3 percent.

The U.S. gained an average of 36.6 percent in high-skilled manufacturing jobs during the same time period. New York neighbors Pennsylvania and Ohio experienced a growth of 25.9 and 24 percent, respectively.

While declining in absolute numbers, high-skilled manufacturing jobs in New York increased their share of manufacturing employment by 6.6 percent over the same period. But the report notes that Connecticut’s high-skilled workers increased their share by 12.1 percent.

The state also experienced high losses among its mid-skilled and low-skilled manufacturing jobs, the report said.

“Despite the nationwide net loss in manufacturing jobs, manufacturing employment has not been declining in every region of the country,” the report said. “Within the United States, manufacturing employment has been migrating to the South and West.”

“It appears that manufacturing companies are relocating in order to take advantage of the lower priced resources-land, labor, and energy-available in those areas.

The report did not speculate on the reasons New York’s high-skilled job loss is so severe, but it did caution against throwing the blame on an increase in productivity and the expansion of international trade.

“The forces of productivity growth and globalization also create jobs, both in the manufacturing sector and in other sectors of the economy,” the report said. “Technology advances promote the development of high-skilled jobs, including jobs in research and development and in fields such as engineering. Liberalized trade can also lead to the creation of specialized, high-skilled domestic jobs in those markets where the U.S. labor force has a competitive edge.”

For the full report, click here .