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Are Good Jobs Flying Away? U.S. Aircraft Engine Manufacturing and Sustainable Prosperity

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  • Beth Almeida

    (The Jerome Levy Economics Institute)

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    Abstract

    In a manner not unlike the other industries highlighted in this series of reports, aerospace, the "crown jewel" of post-war U.S. manufacturing, is experiencing a structural decline, seeing "good jobs" slipping away at an alarming rate. The 1990s have seen the U.S. aerospace industry undergoing a far-reaching process of consolidation; shedding thousands of highly-skilled, well-paid blue collar jobs in addition to white collar design and engineering jobs that only a few years ago seemed secure. In five short years, between 1989 and 1994, aerospace equipment manufacturers cut close to half a million jobs, a decline of 37% from their 1989 employment level of 1,331,000. [Barber and Scott, p. 12] Much of this decline has to do with the slowing of military orders as the Cold War wanes. But declining employment in aerospace manufacture has occurred alongside a narrowing of the trade surplus, and a greater role for foreign companies in product development and even basic research activities. These developments are all indications of a structure shift in the industry, one whereby production has become increasingly globalized over the last two decades. These developments have been particularly significant in the area of aircraft engine manufacturing which saw employment peaking in 1988 with 141,4000 U.S. employees. [1992 Census of Manufactures, p. 37B-9] By 1995, employment in the industry had plummeted by almost half to 76,300. [1995 Annual Survey of Manufactures, p. 1-24] The U.S. barely maintains a trade surplus in aircraft engines and engine parts, with exports of $6.266 billion and imports of $5.247 billion in 1993, despite the fact that the two largest firms in the industry, General Electric Aircraft Engines and Pratt and Whitney, which altogether command two-thirds of the world market, are U.S.-based. [Aerospace Industries Association (a), p. 122-123] Probably the most telling indication of a structural shift in the industry is the fact that, since 1993, new orders have been on the increase (up 25% in 1994 and 10% in 1995, in real terms). [See Appendix 2] But during this period, the decline in employment continued unabated, with 27, 000 jobs lost between 1993 and 1995 alone. [See Appendix 2]

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    File URL: http://128.118.178.162/eps/mac/papers/9801/9801003.pdf
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    Bibliographic Info

    Paper provided by EconWPA in its series Macroeconomics with number 9801003.

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    Length: 34 pages
    Date of creation: 22 Jan 1998
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    Handle: RePEc:wpa:wuwpma:9801003

    Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on PostScript; pages: 34; figures: included
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    Web page: http://128.118.178.162

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