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Failing to Deliver: Manufacturing Wages Aren’t What They Used to Be

By Deirdre Fulton | Common Dreams | November 21, 2014

Though nine out of ten Americans perceive blue-collar jobs as “good jobs” and policymakers tout the benefits of expanding the country’s manufacturing base, the truth is that factory wages now rank in the bottom half of those for all jobs in the U.S., according to a new study from the National Employment Law Project (NELP).

The report, Manufacturing Low Pay: Declining Wages in the Jobs That Built America’s Middle Class (pdf), reveals that while the manufacturing sector has experienced a rebound in recent years, in fact “the quality of too many of the returning jobs is low and fails to live up to workers’ and the overall public’s expectations.”

“Manufacturing jobs are… highly sought after by our federal and state policymakers,” write co-authors Catherine Ruckelshaus and Sarah Leberstein, “lauded as ‘advanced industries’ that generate investments, create a high number of direct and indirect jobs, enhance worker skills, and generate additional economic activity in related industries.”

But “while the manufacturing sector has been resurging in the last few years, growing by 4.3 percent between 2010 and 2012, the jobs that are returning are not the ones that were lost: wages are lower, the jobs are increasingly temporary, and the promised benefits have yet to be realized,” they write.

Specifically, the study finds that:

  • More than 600,000 manufacturing workers make just $9.60 per hour or less and more than 1.5 million manufacturing workers—one out of every four—make $11.91 or less;
  • Real wages for manufacturing workers declined by 4.4 percent from 2003 to 2013—almost three times faster than for workers as a whole.
  • In the largest segment of the manufacturing base—automotive—wages have declined even faster. Real wages for auto parts workers, who now account for three of every four autoworker jobs, fell by nearly 14 percent from 2003 to 2013—three times faster than for manufacturing as a whole, and nine times faster than the decline for all occupations.
  • In particular, new jobs in the auto industry pay less than the jobs that were lost. New hires in auto earn less than $10 an hour.
  • Heavy reliance on temporary workers hides even bigger declines in manufacturing wages. About 14 percent of auto parts workers are employed by staffing agencies today. Wages for these workers are lower than for direct-hire parts workers and are not included in the official industry-specific wage data cited above.

“What will these jobs look like in 10 years if these trends continue?” the report asks. “If the wage trends continue, manufacturing jobs will not deliver on the promise of creating livable jobs with positive economic revivals in communities and families.”

Writing at the Campaign for America’s Future blog, Dave Johnson blames globalization and so-called free-trade pacts for exacerbating—if not directly causing—the issues raised in NELP’s report.

“American factory jobs used to provide reasonable pay and benefits—largely because of unions and democracy. So how do you make manufacturing jobs more ‘efficient?’ You can move the factory to a country that doesn’t allow unions. Our country used to recognize this game and ‘protected’ the good wages and benefits that democracy provided people with tariffs that raised to price of goods made in places that allowed exploitation of working people. Solution: ‘free trade’ that pits our democracy against thugocracies with few or no protections for people or the environment.

Free trade’ worked—to force unemployment up and wages down. We lost more than 6 million manufacturing jobs and 60,000-plus factories between 2000 (the year before China entered the World Trade Organization) and 2010.

With approval of the corporate-friendly Trans-Pacific Partnership on the horizon, NELP’s findings are a wake-up call, writes Scott Martelle for the LA Times.

“We as a nation need to press the federal government to rethink trade policies, especially as it pushes for ever more deals to make it easier to ship goods and jobs around the world,” he says. “The looming Trans-Pacific Partnership (look at it as NAFTA for the Pacific Rim) might be good for global manufacturers and American consumers, but those consumers are also American workers. Driving down retail prices while also driving down family incomes is the wrong spiral for community stability and a steady or improving standard of living.

Martelle continues: “A century ago, Henry Ford figured out that if he wanted a mass market capable of buying his cars—cheaper to make with his moving assembly line—then he needed to pay higher wages. He understood the connection between wages paid and products bought. These days, the focus seems to be more on wages squeezed. And that’s no way to preserve, or strengthen, a middle class capable of driving a vibrant consumer economy.”

November 21, 2014 - Posted by | Economics | ,

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