LEARN / GLOSSARY
Deindustrialization
A sustained contraction in a country’s industrial activity. Which contraction is meant depends on whether the speaker is counting workers, shares, or output, and the three do not agree on dates.
Definition
Deindustrialization describes a sustained decline in industrial activity relative to some prior state. The term is used for at least three different declines: a fall in the absolute number of manufacturing workers, a fall in manufacturing’s share of total employment, and a fall in manufacturing’s share of national output.
Why the dictionary version is insufficient
Standard definitions describe a reduction in industrial capacity or activity without specifying which measure applies. That omission is the source of most of the public disagreement, because the three measures turned at different times and can move in opposite directions during the same period.
How it is measured
Absolute employment comes from the BLS Current Employment Statistics program, which has tracked manufacturing payrolls since January 1939. Share of employment is that series divided by total nonfarm employment. Share of output comes from the BEA industry accounts, a series that begins in 2005 and therefore cannot date a decline that started earlier.
Measurement noteThe word predates the current debate. The Oxford English Dictionary traces “deindustrialization” and its related forms to the 1930s, when American mill towns were already losing textile capacity to the South.
Related terms
Value added · Reshoring · Industrial base
Appears in
When Did American Deindustrialization Begin?
What Is Reindustrialization?
Read next
When Did American Deindustrialization Begin?
Sources
- U.S. Bureau of Labor Statistics, Current Employment Statistics, series CES3000000001. fred.stlouisfed.org
- U.S. Bureau of Economic Analysis, Guide to the Interactive GDP by Industry Accounts Tables. bea.gov
- Oxford English Dictionary. oed.com