Actually, manufacturing has been rising and falling at the same time, which perhaps explains why economists use the churn, an old tool farmers used to turn milk into butter, to explain why Connecticut's manufacturers have been boosting productivity while shedding jobs. A recent
The Connecticut Economy article describes the outward signs of this process in which "obsolete products or technologies make way for new innovations, and resources are allocated to more efficient uses."
According to the job numbers, manufacturing jobs shrunk from about 33% (477,000) of all jobs in 1969 to less than 10% (174,000) in 2011. But, manufacturers boosted their output by more than half between 1990 and 2007. In short, they did more with less. "Real output per worker (measured in 2005 dollars) grew from $57,000 in 1990 to $135,000 in 2007, an impressive 35% increase." And the jump in output translated into higher wages. In 2011, factory workers' annual earnings averaged $76,900, 26% above the state's industry-wide average of $61,100.
The story behind these seemingly contradictory forces is a fundamental change in the way manufacturers make things. Henry Ford's assembly line required workers to perform simple tasks repeatedly, the goal being to reduce production costs by mass-producing a few standard products. Today's factory requires workers to manipulate computers controlling robotic machines that make custom parts and products.
In addition, Henry Ford's sprawling brick factories have given way to smaller facilities operated by small and mid-size firms. In 2009, 85% of Connecticut's manufacturing establishments employed fewer than 100 people, up from 80% in 1990.
What does all this mean for the state's economic growth? "Though in the short-run the disruption that 'churn' causes might crimp industry growth, in the long run 'churn,' led by smaller firms, can be an important source of economic change and development."
