Hard Times for Nonprod Workers in Manufacturing

Posted by: Michael Mandel on October 26

Here’s a bit of a good news-bad news chart.


newgdp_23631_image001.gif

The rate of job cuts for production workers in manufacturing has slowed dramatically in the past few months, as companies start to rebuild inventories.

However, they are still aggressively slicing their nonproduction workers—engineers, managers, sales staff, and the like. Over the last three months, employment of manufacturing nonprod workers is falling at a 7.6% annual pace, compared to a 4.2% pace for production workers.

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Reader Comments

Strategery

October 26, 2009 06:12 PM

When you move manufacturing out of the country, supporting positions and industries follow too. I live in an area where a semiconductor manufacturer just ended production. Not only were thousands of production workers let go, plus related management and other staff; but local companies that serviced and supplied materials are also firing people. Inevitably, all the infrastructure and R & D will move to Asia where the production fabs are.

Tom E

October 27, 2009 12:37 PM

This is anecdotal, but I have noticed companies becoming hostile toward their sales and marketing people.

Accountants rule the roost now. They never understood nor liked S&M. Maybe they think with the internet the products will sell themselves.

It seems odd and self defeating. No wonder revenues are not growing. Everyone wants to cut their way to success.

cm

October 27, 2009 09:43 PM

Well, the graph suggests a previous ~10% point gap between the rate of job cuts. Maybe production jobs have already been cut to the point where operations can barely be sustained, and the office staff still has some meat (or fat, as some would have it) left. Possibly the link between output and labor is more easily observed with production staff, i.e. it may be more transparent who is doing what.

I'm under the impression in the office environment where I work, many managers are unable (or unwilling) to figure out what a reasonable workload is, or what their underlings are actually doing the whole day, so they resort to "let's push some more work their way and see how hard we can drive them". Maybe that can be applied the other way around too - let a few of them go and see whether things still work. If not, we can always backfill, there are enough willing candidates out there, right?

Charles Phillips

October 29, 2009 10:23 AM

Economics is very good at telling us what happened. Is there any branch of economics that is looking through the windshield toward stimulating economic growth, rather than through the rear view mirror?

Is there a clearing house for fresh, new economic ideas and innovation? We are looking for one.

Fephisto

October 30, 2009 10:55 AM

Charles Phillips:

Austrian Economics.

Golib Kholjigitov

November 4, 2009 02:27 AM

I agree, very hard time for service sector workers.

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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