The Century Foundation on Why Manufacturing Jobs are Worth Saving

The foundation is aiming to increase the number of high wage jobs.

StartFragment

The Century Foundation officially launched a new initiative on Tuesday to find ways to bring high wage work back to America’s heartland, including via manufacturing, technological innovation, expanding workforce training and targeted investment.

Overseen by the foundation’s Bernard L. Schwartz Rediscovering Government Initiative, the "High Wage America Project” will focus on research and policy solutions to develop a high wage agenda and reverse policies that cut wages. The project kicked off with a discussion at the Capitol in Washington, D.C., featuring Members of Congress and panelists from different regions of the country.

The project believes that good opportunities can be restored, and that all Americans — from the industrial heartland to the inner city — can lead better lives. Its agenda has three major components to help workers:

Public investment and innovation;
Education and training;
And labor standards and social supports.

The Century Foundation also released a new report this week, titled Why Manufacturing Jobs Are Worth Saving, that studies the role of manufacturing in our economy, its potential for growth and its track record of providing above-average wages.

Authors Andrew Stettner, Joel S. Yudken and Michael McCormack note that the “steep decline of U.S. manufacturing during the first decade of the century was the result of changes in trade policy not automation.” But given manufacturing’s growth over the past several years — the sector gained 945,000 jobs from 2010 to 2017 — a major revival is now possible. Manufacturing remains hugely important to Midwestern states and rural communities, and if lawmakers and others make smart decisions, continued growth can happen.

“As the nation’s manufacturing workforce ages and technical demands of jobs increase, there will be an acute need to create a diverse pipeline of skilled workers and entry-level workers interested in manufacturing careers,” they write. “Taking advantage of this opportunity will require a dynamic, high road recovery model—one that will address the interlinked challenges of manufacturing innovation and workforce readiness, and ensure that federal policies level the playing field for U.S. producers.”

Insights from Capitol Hill

During the kickoff event on Capitol Hill, Rep. Marcy Kaptur (D) reiterated the importance of the smart manufacturing policies in places like her home state of Ohio, where she calls manufacturing their lifeblood. “We need to respect it and we need to enliven it,” Kaptur said of manufacturing.

Kaptur noted that the trade deficit is felt most by manufacturing workers, who in some cases are forced to train the very people their outsourced jobs go to. "We must hold this administration accountable for promises they made in places like Ohio" to fix these kinds of problems, Kaptur added.

Kaptur described plans to renegotiate the North American Free Trade Agreement (NAFTA) as an opportunity to fix problems related to unfair trade, as well as set an example for all future trade deals to ensure fairness.

She also advocated for passage of the Balancing of Trade Act of 2017, legislation she introduced to require that the president take steps to better balance trade with countries that the United States has maintained an annual trade deficit of more than $10 billion for three consecutive years.

The congresswoman also urged the Commerce Department to finish its Section 232 national security investigations into steel, which should be unveiled by the end of June. Kaptur also emphasized the importance of thinking creatively to reboot the economy and the manufacturing sector, including things such as providing bridge loans to the steel industry, and reinvesting back into our industrial base.

Pennsylvania Sen. Bob Casey (D) made an appearance on Tuesday as well, noting that wage growth in America has been at an all-time low, 11 percent, for the past 40 years. Growth from 1948 to 1972 hit 91 percent, he added.

Casey also advocated for the Community Economic Assistance Act, legislation he introduced to provide economic assistance to communities that have experienced a localized recession from large scale job loss. The communities that would eligible for the assistance are small rural towns that have been effected by jobs moving overseas.

Amy Goldstein, author of Janesville: An American Story, also led a discussion panel featuring three panelists who answered questions on why manufacturing jobs are worth saving and what can be improved.

Stettner, a senior fellow at The Century Foundation who helped author the new manufacturing report, summarized the recovery of manufacturing jobs since 2010 and noted that small cities and towns rely on manufacturing for a good portion of their jobs. While some manufacturing jobs have been recovered, he did summarize a few challenges that face the industry, including recruiting women and minority workers, coping with advancements in technology, and decreasing wages.

Madeline Janis, executive director of the Jobs to Move America project, also highlighted the lack of representation for women in manufacturing. According to Janis, just 27 percent of manufacturing jobs belong to women — most of which are administrative positions. Only 7 percent of middle-skilled manufacturing positions are held by women.

Original article published: http://www.americanmanufacturing.org/blog/entry/the-century-foundation-on-why-manufacturing-jobs-are-worth-saving

Excerpt from Why Manufacturing Jobs are Worth Saving

The U.S. manufacturing sector was reshaped by a steep decline in the first decade of the century, dropping from 13.1 percent of the total workforce in January of 2000 to 8.8 percent in in January of 2010. But unlike after the 2001 recession, manufacturing has grown alongside the rest of the economy, adding 945,000 jobs from 2010 to 2017.
Current growth and future potential of manufacturing is now focused on a concentrated core of goods, such as transportation, fabricated metals, machinery, chemicals, and food products—subsectors that account for 52.6 percent of manufacturing jobs nationwide as of January 2017.
The steep decline of U.S. manufacturing during the first decade of the century was the result of changes in trade policy not automation. During this period, manufacturing productivity growth actually slowed, averaging only 7 percent in all manufacturing sectors other than computer and electronics. At the same time, the entrance of China into the World Trade Organization allowed the trade deficit to increase from $83 billion in 2001 to $347 billion and was responsible for 2.4 million job losses.
Further economic recovery and the reshoring of manufacturing American jobs is indeed possible. Real foreign direct investment in manufacturing surged to $243 billion in 2015, up from $117 billion in 2007. When all the costs of outsourcing are considered, 55 percent of manufactured goods could be produced more cheaply in the United States, while only 3 percent could be based on the sticker price alone.
Manufacturing has become more regionally concentrated, with three manufacturing regions (the Rust Belt, Agricultural Midwest, and the Industrial Southeast) holding most of the nation’s manufacturing jobs. Seven Rust Belt states (Ohio, Pennsylvania, Indiana, Michigan, Illinois, Wisconsin, and Minnesota) have 3.7 million manufacturing jobs, more than seventeen large Western states including California and Texas. Manufacturing is now of greatest importance to mostly rural communities in these manufacturing states, where it makes up one-in-four private-sector jobs, as compared to either strictly rural or urban areas.
Manufacturing jobs continue to provide above-average wages, especially for skilled positions that require on-the-job training but not college degrees. Among workers without a four-year college degree, manufacturing workers earn $150 more per week than in other industries. On average, an econometric analysis finds that workers in manufacturing earn 9 percent more per week than workers in other economic sectors, holding other differences between workers equal. However, plummeting manufacturing unionization in the Rust Belt over the past twenty-five years (from 28.4 to 14.5 percent) has shrunk the real wage advantage of manufacturing jobs from $220 to $170 per week in the crucial region.
The manufacturing sector must address major workforce challenges if it is to experience a revival. The aging of the manufacturing workforce will create a shortage of as many as 2 million qualified manufacturing workers, especially among skilled manufacturing positions such as industrial mechanics (paying $51,890 per year and expected to add 18 percent more positions over the next ten years) and operators of computer-controlled machine tools needed for advanced means of production (paying $39,500 and growing by 17.5 percent over ten years). Yet, only 13 percent of manufacturers recruit at high schools despite a coming workforce shortage that could be met by a new generation of high school graduates. Despite conventional wisdom, manufacturing is not a white male field. Hispanic workers (16.1 percent of all manufacturing workers) and Asian workers (6.8 percent) are just as likely to work in manufacturing as any other field. African-Americans represent 10 percent of manufacturing workers, only slightly less than their 12 percent share of the overall workforce. However, manufacturing has a much larger gender gap, which got worse during the recession, with women dropping from 32 to 27 percent of those on manufacturing payrolls.