Manufacturing is back, but it's not the problem
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Robet Reich Guest blogger
Suddenly, manufacturing is back 鈥� at least in the election. But don鈥檛 be fooled. The real issue isn鈥檛 whether and how we get manufacturing back. It鈥檚 how we get good jobs and good wages back. And they aren鈥檛 at all the same thing.
Republicans have suddenly become born-again champions of American manufacturing. That may have something to do with crucial primaries occurring next week in Michigan and the following in Ohio, both of them former arsenals of American manufacturing.
Mitt Romney says he鈥檒l 鈥渨ork to bring manufacturing back鈥� to America by being tough on China, which he describes as 鈥渟tealing jobs鈥� by keeping value of its currency artificially low and thereby making its exports cheaper.
Rick Santorum promises to 鈥渇ight for American manufacturing鈥� by eliminating corporate income taxes on manufacturers and allowing corporations to bring their foreign profits back to American tax free as long as they use the money to build new factories.
President Obama has also been pushing a manufacturing agenda. Last month the President unveiled a six-point plan to eliminate tax incentives for companies to move offshore and create new lures for them to bring jobs home. 鈥淥ur goal,鈥� he says, is to 鈥渃reate opportunities for hard-working Americans to start making stuff again.鈥�
Meanwhile, American consumers鈥� pent-up demand for appliances, cars, and trucks have created a small boomlet in American manufacturing 鈥� setting off a wave of hope, mixed with nostalgic patriotism, that American manufacturing could be coming back. Clint Eastwood鈥檚 Super Bowl 鈥淗alftime in America鈥� hit the mood exactly.
But American manufacturing won鈥檛 be coming back. Although 404,000 manufacturing jobs have been added since January 2010, that still leaves us with 5.5 million fewer factory jobs today than in July 2000 鈥� and 12 million fewer than in 1990. The long-term trend is fewer and fewer factory jobs.
Even if we didn鈥檛 have to compete with lower-wage workers overseas, we鈥檇 still have fewer factory jobs because the old assembly line has been replaced by numerically-controlled machine tools and robotics. Manufacturing is going high-tech.
Bringing back American manufacturing isn鈥檛 the real challenge, anyway. It鈥檚 creating good jobs for the majority of Americans who lack four-year college degrees.
Manufacturing used to supply lots of these kind of jobs, but that was only because factory workers were represented by unions powerful enough to get high wages.
That鈥檚 no longer the case. Even the once-mighty United Auto Workers has been forced to accept pay packages for new hires at the Big Three that provide half what new hires got a decade ago. At $14 an hour, new auto workers earn about the same as most of America鈥檚 service-sector workers.
GM just announced record profits but its new workers won鈥檛 be getting much of a share.
Inthe 1950s, more than a third of American workers were represented by a union. Now, fewer than 7 percent of private-sector workers have a union behind them. If there鈥檚 a single reason why the median wage has dropped for non-college workers, it鈥檚 the decline of unions.
How do the candidates stand on unions? Mitt Romney has done nothing but bash them. He vows to pass so-called 鈥渞ight to work鈥� legislation barring job requirements of union membership and payment of union dues. 鈥淚鈥檝e taken on union bosses before, 鈥� he says,鈥� and I鈥檓 happy to take them on again.鈥� When Romney鈥檚 not blaming China for American manufacturers鈥� competitive problems he blames high union wages. Romney accuses the President of 鈥渟tacking鈥� the National Labor Relations Board with 鈥渦nion stooges.鈥�
Rick Santorum says he鈥檚 supportive of private-sector unions. While in the Senate he voted against a national right to work law (Romney is now attacking him on this) but Santorum isn鈥檛 interested in strengthening unions, and he doesn鈥檛 like them in the public sector.
President Obama praises 鈥渦nionized plants鈥� 鈥� such as Master Lock, the Milwaukee maker of padlocks he visited last week, which brought back one hundred jobs from China. But the President has not promised that if reelected he鈥檇 push for the Employee Free Choice Act, which would make it easier for workers to organize a union. He had supported it in the 2008 election, but never moved the legislation once elected.
The President has also been noticeably silent on the labor struggles that have been roiling the Midwest 鈥� from Wisconsin鈥檚 assault on the bargaining rights of public employees, through Indiana鈥檚 recently-enacted right to work law 鈥� the first in the rust belt.
The fact is, American corporations 鈥� both manufacturing and services 鈥� are doing wonderfully well. Their third quarter profits totaled $2 trillion. That鈥檚 19 percent higher than the pre-recession peak five years ago.
But American workers aren鈥檛 sharing in this bounty. Although jobs are slowly returning, wages continue to drop, adjusted for inflation.
The fundamental problem isn鈥檛 the decline of American manufacturing, and reviving manufacturing won鈥檛 solve it. The problem is the declining power of American workers to get a portion of the gains. That鈥檚 why we need strong unions.
