Wages: A Race to the Bottom


From an article posted Friday by Jack Temple to the Demos Policy Shop blog, concerning last week’s jobs report:

[W]hile the manufacturing sector is steadily expanding, it appears to be joining the ranks of lower-wage jobs typically associated with the service sector. Indeed, as I’ve mentioned before, the “wage premium” for manufacturing jobs has been disappearing over the last several decades, relative to service sector jobs requiring similar skill levels.

And the numbers are clear: since 2000, manufacturing wages have increased over 70 percent among OECD nations and over 80 percent in Canada, while U.S. manufacturing wages have risen just under 40 percent.

So while manufacturing may be making some kind of a comeback in the U.S., this by no means signals a return of the high-road jobs that built the American middle class decades ago.

From the testimony of Secretary of Labor Hilda Solis before the Senate Committee on Health, Education, Labor and Pensions, on July 26, 2011:

First, I agree wholeheartedly with President Obama that rebuilding our manufacturing sector is critical to rebuilding the middle class. The manufacturing sector has shown enormous resiliency and strength in our economic recovery so far, with over 250,000 jobs added since the beginning of 2010. Manufacturing jobs are the kinds of jobs that pay well and can serve as an anchor in communities across the country. After more than a decade of losing manufacturing jobs, it is a thrill for me to be part of the policies that are helping to rebuild our manufacturing base. (my emphasis)

The secretary reserved a big chunk of her testimony to discussing the value of education credentials. “Credentials,” she said, “are a key component of improving the skills and adaptability of workers who want to compete for middle class jobs in the 21st century.”

UPDATE 1/16/12: From another recent another story on the rebounding U.S. manufacturing sector:

Ford Motor Company is bringing back 2,000 jobs from China after striking an agreement with the United Auto Workers. [Boston Consulting Group’s Harold] Sirkin says it’s good news for the economy even though wages will be lower in those jobs than they were previously.