The predominant story of American manufacturing for the past thirty years has been rising output and declining employment. Labor-intensive work has been outsourced to foreign countries where labor is cheaper, while American output has been more dominated by mechanization and taken advantage of lower cost inputs. The result has been flourishing quantity of stuff, but declining labor market prospects for men without college degrees. Michael Fletcher reports from the Washington Post on a manufacturing revival in Ohio driven by the other possibility—lower wages:
But the new hiring also reflects another emerging reality of U.S. manufacturing: Many of the jobs don’t pay anything close to what they used to. Assembly-line workers who will be making the EdenPure products under the auspices of Suarez Corp. Industries will start at $7.50 an hour.
That’s a far cry from the $20 an hour that most workers made with Hoover, which shifted its century-old production lines to Mexico and El Paso in 2007 after concluding that it was too expensive to make its products in the industrial Midwest.
Now it’s a bit unfortunate to compare the lowest possible wage at Suarez to the average wage at Hoover, since presumably an apples-to-apples comparison would reflect better on Suarez. Still, the direction of the trend is the same. The good news for the vast majority of Americans who don’t work in manufacturing is that these trends have made manufactured goods better, cheaper, and more plentiful. All across the United States of America there’s no shortage of vacuum cleaners and other household appliances. But we’re paying the price, in part, for selective rationalization of the economy. Doctors, dentists, college professors, and lawyers haven’t been subjected to this same kind of pitiless international labor market competition even though such competition would make it much easier for Americans to afford vital professional services. Movie studios, publishers, and record companies have been given stronger legal monopoly rights even as globalization has increased the returns to stardom. We’ve made it harder, not easier, for working class people to move to high-wage metropolitan areas where job opportunities are plentiful, and we’ve made it more expensive for their kids to go to college.
I think seeing this as a problem that can or should be addressed by trying to rebuild the manufacturing economy of yesteryear is a mistake, but that’s not the same as saying it’s not a problem.