Let me ask you a question. Why is it that an office worker doing, say, supply chain management at a major defense contractor makes $80,000 a year with full benefits and 100% tuition reimbursement to pursue an MBA while the cafeteria cook at the local elementary school both of their children attend makes $8 an hour with no benefits, no career path, and no payments for higher education?
We can come up with three broad answers to the question. First, our laissez-faire corporatist friends might suggest that's simply the power of the market, matching up demand for skills and the value added to society by paying different people differently. I assume anyone with a casual interest in Democratic politics or Daily Kos specifically can wholeheartedly laugh off such a notion as being instantly and hilariously inaccurate and simplistic. However, there seems to be much disagreement about the role of the other two answers.
Second, we might say it's because jobs in the manufacturing sector are 'better', or pay more, or some variant thereof, than service sector jobs.
Third, we might say it's because public policy has purposefully depressed wages in the service sector of the economy.
It's these last two notions I want to address today.
There is a general tendency in our discourse to blame wage stagnation, the hollowing out of the middle class, on the decline of the manufacturing sector (I'll ignore for this discussion that small segment of the country that seems to think the last three plus decades haven't been brutal for workers). What I advocate is that that framework actually misses the mark; the decline of manufacturing is not damaging our economy. Rather, domestic public policy has been the guiding force. In our corporate media dominated landscape of 'left' and 'right', I am aware this makes people like me come off as rather conservative (and perhaps even heartless). What I hope is that you'll follow this exploration to see a different perspective on what's been happening. This is fundamentally an optimistic message because the forces shaping our world are not foreign or beyond our reach. They are almost completely within our control, and anything we control can be changed.
Why do we associate manufacturing with 'good jobs'?
The place to start is examining the premise that the manufacturing sector definitionally creates good jobs. This is a premise that can become rather funny once one explores it. Many southerners complained in the 19th century that responsible plantation owners got a bad rap because the working conditions themselves (they argued) were actually better than in northern factories. Charles Dickens didn't exactly paint a pretty picture of life in industrializing England. Child labor laws weren't enacted to prevent kids from performing relatively safe, healthy jobs like mowing lawns or babysitting. Today, liberals aren't exactly thanking Nike for building shoe manufacturing capacity in Indonesia. Indeed, if I were to suggest that both Indonesian workers and US consumers benefited from such trade, some might question my loyalty to the Democratic party/workers/America/Obama/whomever; some might even question my humanity or capacity for empathy.
The reason, I would suggest, that we associate manufacturing with good jobs is because in the United States the Federal Government took very specific action to make manufacturing jobs attractive, to reward work. The American Prospect has run a couple ofgood articles on wages this week, with the most current one, The Good War and the Workers, published online today. It's a great exploration of how public policy, active government involvement, created good jobs. I highly encourage reading the whole thing, but I'll quote a snippet to give an example of what I mean:
Organizers openly circulated membership cards on the factory floor during working hours and unions won nine out of 10 National Labor Relations Board elections. When Sewell Avery, the right-wing head of Montgomery Ward, refused to comply with NWLB rulings, he was hauled out of his office by uniformed soldiers. Rulings by the National Labor Relations Board, backed by Attorney General Francis Biddle, consistently found that corporations engaging in unfair labor practices were not eligible for government contracts.
Since most of the more experienced part of the workforce today grew up in the prosperity enabled by the relatively egalitarian nature of the post-war economy, there is a natural human tendency to view that condition as itself being natural, rather than something that was artificially cultivated by public policy. That is why, today, we think of manufacturing as providing good jobs, of being 'better' than the opportunities created by the service sector.
Why do we associate the service sector with bad jobs?
The flip side of the question on manufacturing is why, to put it bluntly, so many service jobs are so crappy. The answer to that is actually pretty simple. It's because public policy allows many service sector employers to shift wealth from those who do the work to those who manage the work. These methods can be described in three basic categories.
- The disposability of labor.
One of the unpleasant truths about our economy is that millions of Americans are completely redundant, worthless human beings. We are so far from a concept of 'full employment' that we simply don't care that millions of our fellow citizens, potential workers, are shoved aside from any possible hope of a future through disparities in our educational system, criminal justice system, healthcare system, and so forth. Just as doctors beget doctors and lawyers beget lawyers and politicians beget politicians, so too do high school dropouts beget high school dropouts and ex-offenders beget ex-offenders. When there are millions of people who don't have a source of dependable income, that obviously exerts tremendous downward pressure on everybody's wages. It also wastes a lot of resources as society has to deal with the fallout, from social services to prisons.
- The lack of enforcement of laws on the book.
Technically, we still have many laws and entities that protect workers, that try to give them bargaining power in negotiations with employers, from the Fair Labor Standards Act to the National Labor Relations Board. We rarely enforce these, though, and even when we do, it's a slap on the wrist. Paying fines and legal fees is literally considered just a cost of doing business, much cheaper than actually paying decent wages. Company management, unlike poor individuals, are rarely prosecuted, let alone sent to jail. These problems are particularly acute in the less 'traditional' service sector jobs, ie, those that don't fit the bill of the factory whistle, nine to five, Monday to Friday kind of arrangement.
- Direct suppression of wages.
This is perhaps the most eggregious, but also most subtle, component of public policy. You know why employees of Lockheed Martin or Halliburton or ADM make more money than your local school cafeteria worker or day care employee or home health care aide? It's because the government pays companies to pay their workers that way. Most of us remember (or have heard about) Reagan's breaking of the Air Traffic Controller's strike in the 1980s; this set the tone, in trickle-down style, you might say, for companies large and small to move strategically and concertedly against worker rights.
More recently, there has been a massive explosion of private contracting under the Clinton and Bush Administrations. What's particularly notable has been who gets the good wages and who gets the bad wages. The big, private companies, mainly in the military business, get fat contracts with lots of dollars for everybody. But, the smaller companies and nonprofit organizations get squeezed with demands for ever lower labor costs while they fight over the scraps that are left. Think about this the next time you imagine manufacturing jobs paying good wages or service sector jobs paying bad wages. Are federal dollars anywhere in the pipeline?
Doesn't international trade and the decline of manufacturing play some role?
I don't want to be mistaken for saying public policy is the only force in the economy. Globalization, particularly in the post-NAFTA, post-financial deregulation, post-Republican Revolution, post-Bush era, does exert some downward pressure on wages. Any topic as complex as wages has multiple, overlapping causes. But the data is clear that globalization is not the main proximate cause. For one thing, the US is much less dependent upon international trade than many other developed nations. Canada and Germany, for example, have a significantly larger percentage of their total GDP engaged in cross border trade than we do. For another, our trade pacts are just that, trade pacts. They are not, as Dean Baker likes to clarify, free trade pacts. In other words, even the wage pressures seen by globalization are primarily the result of how our government has structured globalization, not anything inherent to the concept of international trade.
Finally, a key point to make about manufacturing is that our massive amounts of taxpayer dollars that go toward military manufacturing crowd out civilian manufacturing capacity. Companies that make bombs or tanks or missile defense interceptors could literally be making wind turbines or rail cars or solar panels instead. Engineers and researchers pursuing weaponized uses of technology could literally be pursuing commercial uses instead.
Additionally, of course we want to maintain some industrial base in our country. We have to make more than just movies and legal services. But here's what is often missed in the discussion. We do make stuff here in America. The value of our output has not declined significantly over the past three decades. Rather, what has declined is the percentage of the population employed in producing this output. That, actually, is a Good Thing. It means we are more productive, we have more stuff in the same amount of time, or the same amount of stuff in less time. Just as we don't sit around mourning the decline in the percentage of the workforce in agriculture, we don't have to sit around and mourn the decline in the percentage of the workforce in manufacturing. Or to say it differently, we might look back wistfully on Jeffersonian democracy, that concept of an agrarian economy at the heart of the political system. But we just don't live in that world. Kansas City, MO has more residents today than the entire Virginia colony did. And I for one am happy to be able to do something for a living other than be a farmer. My grandparents sold their parents' farm when they passed away. I will always have some sentimental attachment to that place, some nostalgia for a bygone era. But make no mistake, I have no desire to be up there farming it right now.
Can we do anything about it?
This is why this is a fundamentally optimistic message. Public policy created a vibrant manufacturing sector. Public policy can also create a vibrant service sector. And here's the real kicker. The longer we allow public policy to suppress service sector wages, the more manufacturing wages will harmonize downward to the same level. In other words, all sectors of the economy benefit when public policy is designed to reward work.
Si se puede.