Don’t bother bringing them back: Analyst says manufacturing pay ‘shriveling for decades’

06 June

Former treasurer secretary counselor Steven Rattner asks why would any U.S. leader press for a return to low-end manufacturing over service jobs and tech jobs that generally pay better, especially when non-tech manufacturing pays dirt across the planet.

“The minimum wage for garment workers in Bangladesh is about $113 a month. It’s hard to imagine that American workers want to be sewing Nike sneakers together at such very modest wages,” Rattner said.

Manufacturing used to dominate American industry, “but that doesn’t mean we should try to bring those jobs back.” In its heyday American workers enjoyed far higher wages than those in services, but “no longer,” says Rattner. “That advantage has been shriveling for decades and, by some measures, has disappeared entirely.”

Today it would be difficult for U.S. workers to compete and retain a living wage without producing a product too expensive to sell. Mexico, for example is increasingly producing cars at wages a fraction of those paid in the United States, he said. So much so that even our own U.S. car companies assemble much of their vehicles there. The “most resilient part of our domestic auto industry has been in the [American] South, where foreign companies from Mercedes to Hyundai have been expanding their presence using cheap, nonunion labor."

Plus, manufacturing work is often unpleasant, Rattner adds.

“Assembling iPhones is the definition of tedium — long hours performing repetitive tasks, like inserting the same small component over and over, for pay well below our minimum wage,” Rattner says. “Little wonder many Americans — particularly younger ones — view classic factory work as unappealing. Today, there are nearly 500,000 unfilled manufacturing jobs.”

The nation’s shift to a service industry like software design, medical work and tourism is similar to another industrial shift in the late-19th century, when Americans abandoned their farms for jobs in the city. “Trying to drag them back to the farm would have been as counterproductive as trying to restore our textile or furniture-making businesses,” said Rattner.

But the U.S. led the Industrial Revolution, and Rattner assures we can “be leaders again in new sectors” with our substantial technology. The challenge, he said, is to “ensure that Americans are educated, trained and positioned to take advantage of the jobs of our future.”

Read the full New York Times report here.

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