Cecil Bohanon and John Horowitz: Acquiring factories shouldn’t be economic focus

In the summer of 1980, Bohanon and a fellow graduate student from Virginia Tech took a road trip to Granville, Ohio, and then to Muncie to search for living accommodations near their new jobs at Ball State University and Denison University. A salient memory upon leaving Muncie to go back to Blacksburg, Virginia, was the afternoon traffic jam on Kilgore Avenue. The Warner Gear factory was changing shifts, and hundreds of cars were coming in and going out through the main gate. How things have changed in 45 years.

Warner Gear’s employment in Muncie peaked in 1953 at 6,100. It was down to 2,575 by 1989, 780 by 2007 and 0 by 2009. There are no more afternoon traffic jams on Kilgore Avenue. The prolonged decline of Warner Gear in Muncie had a detrimental impact on numerous individuals and the broader community. Many look back to the mass factories of the 1950s with nostalgia. One could graduate from high school, start working at a factory, buy a house, support a family and enjoy a good life. Many welcome policies that are supposed to bring back factory jobs to the USA.

Indeed, Commerce Secretary Howard Lutnick opined in April. “The army of millions and millions of human beings screwing in little screws to make iPhones—that kind of thing is going to come to America,” he said, quickly qualifying that “it is going to be automated” and claiming such reshoring of manufacturing would lead to the “greatest resurgence of jobs in the history of America.”

We wish it were so, but we doubt it. Some quick facts: In 2024, in the USA, 4.9 million people work on factory floors at a median wage of $22 per hour. Meanwhile, 15.4 million work at jobs in skilled trades, repair and maintenance, security and emergency personnel, vehicle and equipment technicians, and operators and extractive workers—all at median wages 7%-26% higher than factory work. Like factory floor work, most don’t require a college degree.

Worldwide, manufacturing jobs have declined by 6% from 330 million to 310 million between 2013 and 2025, while the value of manufacturing output rose by 5%. Automation means there is no need for an “army of millions and millions of human beings screwing in little screws.” This trend is likely to continue in the next 12 years. It is foolish for local, state or national governments to place acquiring factories at the forefront of their economic development efforts.•

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Bohanon and Horowitz are professors of economics at Ball State University. Send comments to [email protected].