Study: Manufacturing jobs more critical to rural America

Manufacturing jobs are twice as important to rural America as urban areas, according to the latest analysis from the USDA’s Economic Research Service, Rural Manufacturing at a Glance.

The report found that in 2015, manufacturing represented a greater share of both private nonfarm rural jobs (14% vs. 7%) and rural earnings (21% vs. 11%) when compared to urban areas.

Manufacturing jobs in rural areas totaled about 2.5 million jobs in 2015 and were described as paying “relatively well” by the USDA’s Sarah Low, with only mining having higher median earnings.

The manufacturing sector’s share of employment and earnings in rural areas began to exceed its share in urban areas in the 1980s, when import competition forced domestic manufacturers to lower costs, Low said.

“Rural areas generally have lower wages, property taxes, and land prices, making these areas relatively attractive to manufacturing firms,” Low added, noting that overall “manufacturing is no longer the driver of job growth that it once was.”

“Between 2001 and 2015, a period that included two recessions (in 2001 and 2007-09), manufacturing employment fell close to 30%. In addition, 71% of U.S. counties experienced a decline in manufacturing employment. Counties with the largest relative declines were concentrated in the eastern United States, the traditional hub of U.S. manufacturing,” Low said.

She continued: “Despite the relative importance of manufacturing to the rural economy, economic restructuring is altering job opportunities for rural areas of the country. Rural manufacturing employment was smaller both in relative and absolute terms in 2015 than in 2001. There were 21% fewer manufacturing jobs while total employment grew almost 7%. That is, manufacturing employment became a smaller piece of a larger pie.”