Today’s jobs report from the Department of Labor shows that the private sector has added jobs for the past 25 months consecutively. One particular bright spot: auto industry employment continued its winning streak.
Nearly ten percent of the 120,000 U.S. jobs added in March were a result of strong growth in the motor vehicles and parts manufacturing sector, serving as yet another wake-up call regarding whose ideas are working for the economy. Many Republicans — including the GOP’s presidential front-runner, Mitt Romney, said we should “let Detroit go bankrupt“.
Auto industry jobs suffered a steady decline in the 2000s even before the Great Recession hit. From March 2001 — the previous cycle peak — to December 2007, auto jobs fell from 1.24 million to 956,000. As the housing bubble economy deflated and the financial crisis on Wall Street threw us further into a tailspin, auto industry employment fell by another one-third.
Fortunately, the Obama administration had the vision and perseverance to come to the aid of the auto industry in early 2009. By organizing a restructuring of the industry instead of letting it go bankrupt, the Administration saved hundreds of thousands of American jobs and a vital sector of the U.S. economy.
The graph here shows the cumulative net change in motor vehicles and parts industries jobs since June 2009–the month that General Motors filed for Chapter 11 bankruptcy and the Obama administration’s strategy for restructuring the American auto industry really kicked into high gear.
From June 2009 to March 2012, the industry increased employment by more than 22 percent, or 139,000 new jobs created. And last week, U.S. automakers registered their strongest sales growth since early 2008, even stronger than during the successful “Cash for Clunkers” program in summer 2009.
Industry output growth recovered, too. After falling 60 percent in 2008 and 25 percent in 2009, U.S. motor vehicle output grew by 27 percent in 2010 and 12 percent in 2011, adjusting for inflation. Growth in 2011 was held back by the March 2011 Japanese earthquake, which disrupted global automotive supply chains.
Without the Obama administration’s bold efforts to restructure the American auto industry, not only would these auto industry jobs not exist, but hundreds of thousands of other jobs upstream and downstream from the auto industry would have disappeared as well.