#723 – One Manufacturing Job = Seven New Jobs in Other Industries

Have we told you before that we LOVE manufacturing?? We particularly love the job multiplier effect of manufacturing jobs. This report from the Economic Policy Institute reaffirms our point.

One Manufacturing Job = Seven New Jobs in Other Industries

Not every job is created equal ― at least not in terms of how it impacts the rest of the labor market.

In a new report by EPI’s Josh Bivens, we see how one new manufacturing job in the U.S. results in 7.4 new jobs in other industries. Whereas one new retail job creates just 1.2 new jobs.

This is due, in part, to what’s known as backward linkages ― essentially how a job in a particular industry results in the need for materials (and more jobs).

Check out the graphic below which demonstrates how the loss of manufacturing jobs is more detrimental to the U.S. job market than nearly any other industry.

EPI’s research shows that the loss of 100 auto manufacturing jobs results in the indirect loss of 744 additional jobs.

The only two industries with higher indirect job losses are utilities (9.6 to 1) and real estate and rental leasing (8.8 to 1).

This effect is known as “employment multipliers” — the degree of backward and forward linkages that exists between industries.

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