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Service-sector work in health care and education is replacing manufacturing.
The big story in the US labor market over the past 40 years is the fall of manufacturing jobs and the rise of service-sector work in industries like health care and education.
In 1975, 22% of all private sector jobs in the US were in manufacturing, more than three times the share that worked in health care and education (or “eds and meds,” as labor-market cognoscenti put it). Over the next four decades, driven by automation, globalization, and an aging population, the sectors have traded places. Today, there are almost twice as many jobs in health care and education (16%) as in manufacturing (8.5%).
This shift has not had a dramatic impact on overall wages, as the median wage in these sectors is similar, and slightly above the overall median wage in the US. But the shift has not taken place evenly across the United States—counties once dominated by manufacturing have struggled to recover, while counties that bet big on schools or health have boomed.
And then there is Hampden County, Massachusetts, a near perfect encapsulation of the US labor market in recent decades. The western Massachusetts county of nearly 500,000 residents is home to the city of Springfield, the Basketball Hall of Fame, and the headquarters of gun manufacturer American Outdoor Brands (formerly known as Smith & Wesson).
Quartz analyzed labor market trends in the United States from 2001 to 2015—the period for which the US Census has consistent data—and found that trends in Hampden resemble the US average more than any other county in the nation. Since 2001, the share of manufacturing in Hampden fell by a little over one third, from 17% of all jobs to 11%—a relative drop that was nearly equivalent to the US a whole. At the same time, jobs in health care and education grew by around one-quarter, from 18% to nearly 23%—just below the rate of growth for the country as a whole. The median household income in the county is just over $50,000, which is also the US median household income.
The people of Hampden, where the population has remained roughly the same since 1970, have lived through the great US labor market transformation.
It is fitting that Hampden is such a microcosm, given it’s place in US manufacturing history. In 1777, the leaders of the American side in the Revolutionary War against the British located the aspiring country’s national armory in Springfield. The armory began manufacturing muskets soon after. Many historians trace the original use of an assembly line back to the Springfield Armory in the 1820s. Like much of New England, manufacturing flourished in Hampden throughout the 19th century as a consequence of the industrial revolution.
Federal Reserve Bank of Boston economist Robert Triest says that manufacturing employment in New England peaked around 1920 (pdf), and that deindustrialization across the region has been going on for almost a century. Hampden, and the rest of western Massachusetts, held on to most of their manufacturing jobs through the 1960s, but began to lose their advantage in low-skill manufacturing to the southern US around that time.
The Springfield area has persistently lost low-skill manufacturing jobs since then, particularly in paper-related manufacturing. In 1990, around 10,000 people in the county worked in paper manufacturing, and today that number is less than 2,000. The county has kept more of its high-precision manufacturing jobs, which includes the manufacturing of machines.
Yet while manufacturing has declined, medical services, in particular, have grown. “Although there has been some growth in higher education, the biggest growth for Hampden County has been in health care,” says western Massachusetts-based economist Dan Hodge. “It’s been particularly strong for hospitals. The area has become a regional center for health care.”
Hodge specifically cites the flourishing Bay State Medical Center, a nationally ranked hospital based in Springfield which is the county’s top private employer, and the expansion of several smaller hospitals in the area. With the infrastructure developed during the area’s industrial heyday, Hampden is well placed to take advantage of increasing demand for medical services from an aging population.
But not everybody can or would want to move from manufacturing to health care. Luckily for some of these workers, in 2014 the Massachusetts state government awarded a Chinese state-owned company, China Railroad Rolling Stock Corp., a contract to build subway cars for the Massachusetts Bay Transportation Authority (also known as the “T”). The company is building a new facility in Springfield, described as “the largest industrial development the city has seen in generations.” It is already considering expansion after winning contracts to build cars for subways in Philadelphia and Los Angeles.
The facility sits on the former grounds of a Westinghouse Electric factory that employed 7,000 people at its peak. Production lines at the new operation will need 200 workers.
Dan Kopf is a Reporter at Quartz, where this article was originally published.