Manufacturing on the Move

This paper evaluates a study by Robert Crandall that empirically examines the shift in manufacturing employment and output from the so-called “Rust Belt” states – the states from Wisconsin to New York – to the South and West [the “Sun Belt”]. Crandall finds that differences in labor market conditions – in the degree of unionization and wage rates – provide the principal explanation of this growth of manufacturing employment and output in the West and South. He also provided evidence that the movement of manufacturing from the Rust Belt to the Sun Belt is not likely to stop because the interstate differentials between the Rust Belt and the Sun Belt in terms of wages and the degree of unionization have not significantly narrowed