Cost of saving factory jobs via lower wages

Adam Allington Jan 7, 2015
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Cost of saving factory jobs via lower wages

Adam Allington Jan 7, 2015
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President Barack Obama is in Michigan today to highlight the resurgent automotive and manufacturing sectors. The auto industry employs over 730,000 workers in the U.S. (according to the Center for Automotive Research), back to levels not seen since before the recession. Hallelujah, right?   

“So, the returning jobs aren’t the same quality as the jobs that we lost,” says Catherine Ruckelshaus, director of the National Employment Law Project, which documented the decline in manufacturing wages. Autoworkers, she says, are no exception. “Parts plants, which pay as low as $8 an hour are employing 75 percent of auto workers today.”

Others say there actually is wage growth in the manufacturing sector, just not in unskilled labor. 

“[Computer numerically controlled] machinists, highly skilled welders, I just keep coming across companies who say they just can’t seem to find the people they need,” says Gary Pisano of the Harvard Business School. 

Pisano says the U.S. can and should grow its manufacturing with technical and productivity gains, not low wages, and that is the best outcome for both workers and employers.

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