Manufacturing Sector Adding Jobs, But at Much Lower Wages
The manufacturing sector may be rebounding on paper. It is adding jobs, producing more goods and pumping out even larger profits. But because of America’s failed trade policies, the manufacturing jobs that are being created are at much lower wages than those of manufacturing jobs of the past.
In North Canton, Ohio, workers recently lined up to apply for factory jobs starting at $7.50 per hour, according to The Washington Post.
The company that used to own the facility, Hoover, paid workers an average of $20 per hour. That is until it decided it would pack up and move production to Mexico, where wages are much, much cheaper.
“It’s not clear that the manufacturing jobs that are now growing are all that desirable,” Susan R. Helper, an economist at Case Western Reserve University, told The Washington Post.
The sector has expanded for 20 consecutive months now. The problem is, companies are doing more with less. That may be good for a company’s bottom line, but not for the worker that was replaced by a combination of low-cost, Third-World labor and robots.
Last year, productivity in the industry grew at a rate of 7.8 percent, while labor costs fell 4.4 percent as companies shipped jobs overseas or simply cut them without a replacement.
Some may view lower labor costs as a good thing, meaning lower-cost goods. However, lost manufacturing jobs have ripple effects throughout the entire economy. Related jobs are sometimes lost, tax revenues fall, wages stagnate and innovation and research typically follows the manufacturing jobs.
Wages are not the problem. America’s failed trade policies that open the borders to a flood of cheap imports and allow companies to seek out the lowest labor costs and most lax regulations possible are.
The race to the bottom created by America’s failed trade policies are coming home to roost. By putting American workers in direct competition with those in country where the prevailing wage in the manufacturing sector literally amounts to pennies on the dollar, it drives down the wages of American manufacturing workers as well.
“The communities and workers in Ohio have been devastated over the past decade and are grateful for the opportunity to earn a living,” Robert Baugh, executive director of the AFL-CIO’s Industrial Union Council, told The Washington Post. “But this is tempered by reality. One is that the jobs at Suarez, with wages and benefits well below the middle-class ones that were there before, are not a replacement for the ones that left.”