The University of Chicago economist Erik Hurst finds:
A 10 percentage point decline in the local manufacturing share [no matter the reason] reduced local employment rates by 3.7 percentage points for prime age men and 2.7 percentage points for prime age women. To put the magnitude in perspective, naively extrapolating the local estimates suggests that between one-third and one-half of the decline in employment rates and annual hours for prime age workers during the 2000s can be attributed to the decline in the manufacturing sector.
The declines have been most pronounced among those with lower levels of accumulated schooling. For example, prime age men without a bachelor’s degree are working over 200 hours per year less than their counterparts in 2000. Much of this decline is due to individuals who have persistently left the labor market.
Given the trends in both capital and skill deepening within this sector, we further conclude that many policies currently being discussed to promote the manufacturing sector will have only a modest labor market impact for less educated individuals.
In a recent National Review op-ed, I argued that high real estate prices in America’s fastest growing high-wage cities—chiefly San Francisco, Boston and New York—together with an influx of low-skilled immigrants willing to work for low wages after accounting for the cost of living slowed migration to these cites by lower-skilled Americans.