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Economy & Business Environment Blog

May
03
2017

America’s Foodies are Powering the Economy with Manufacturing Jobs

Authored by Gad Levanon and Diane Lim.

In a column last month, one of us detailed the long-term decline in manufacturing jobs. But it turns out that the somewhat gloomy story by no means pervades the whole manufacturing sector. On the upside, in April’s jobs report, it serves as a reminder of America’s impressive ability to make and manufacture food.

While overall manufacturing employment has been on a fairly constant upswing since 2010, it still remains more than 1.5 million jobs below its pre-recession level from 10 years ago. Although food manufacturing jobs, now at 1.6 million, comprise just 13 percent of total manufacturing jobs, food manufacturing has contributed more than all of the net new manufacturing jobs over the past year, as the rest of manufacturing has lost 3,000 jobs. And unlike the rest of manufacturing which has failed to get back to pre-recession employment levels, there are now over 100,000 more food manufacturing jobs than before the recession.

So why has food employment done so well?

One reason: despite food manufacturing being a “goods-producing” industry, the American consumer increasingly views food as more of an “experience” and less of just a “thing.” The growing preference for “food experiences” means higher demand for food and, ultimately, more jobs producing food.  Start with the simple fact that food consumed away at restaurants now surpasses food consumed at home. Consider all the labor that goes into satisfying, for example, the young urban couple who now wants a distinctive presentation of the food — and to boot, a backstory of the ingredients in the food. Look no further than the rise of the “foodie” — a term that would leave most scratching their heads even a decade ago.

Second, demand for food is by necessity a constant, no matter our economic circumstances. It is not adversely affected by an economic downturn in the way purchases of durable or luxury goods — houses, cars, household appliances, even clothing — are. We have to eat, no matter where we eat, at home or at a restaurant. When incomes decline, we might tighten our food budgets by eating out less and substituting store-branded grocery items for national ones, but we cannot eliminate our food purchases.

Third, in contrast to some other things our country makes, the U.S. still has a “comparative advantage” in producing food. In the simplest of terms, America does food well. Among the reasons, the food “supply chain” journey still remains largely within our borders. This matters due to the perishable nature of food. Overall, the country has the benefit of close proximity between production, at food manufacturing facilities, and consumption, at grocery stores and restaurants.

And that supply-chain journey that food takes from farm to table has a dizzying array of steps in the process. As a Committee for Economic Development of The Conference Board report points out, the process involves and employs millions of people in a huge diversity of roles. By no means is it just workers in the food manufacturing industry, but people who work on the service side of food. For example, employment at food and beverage stores now far exceeds pre-recession levels, up more than 250,000 jobs over the past 10 years.

Apparently, we Americans especially enjoy our carbs and sweets, as employment in retail bakeries (think gourmet cupcakes) has increased by more than 25 percent in 10 years. And our growing preference to eat out shows in the employment numbers for restaurants and bars, now far above pre-recession levels by about 2 million jobs.

Even as our economy shifts from making things to providing experiences, the American “foodie” turns out to be a manufacturing and job creating powerhouse. So with today being Friday, let’s dine and drink to that!



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