Sunday, May 28, 2006

Manufacturing - Why We All Should Care

In the May American Prospect, Michael Tomasky talks about the failure of liberals to talk about the “common good,” and instead being relegated to defending the interests of its diverse constituencies. Along his litany of suggestions is for progressives to defend manufacturing jobs—not to be seen as pandering to the interests of its union donors—but because it is related to the nation’s overall good. Anyone who has defended the manufacturing sector has confronted some kind of overt or covert skepticism – like you are nostalgically defending the old economy and going against the tide.

These issues are growing in importance. Manufacturing is at a turning point. Despite an increase of 19,000 jobs in April 2006, manufacturing employment (roughly 1 in 9 jobs in the US) has been left out of the meager jobs recovery of the last two years. While overall employment is up by 3.5% since January 2004, total jobs in the nation’s factories have not budged and employment is still down by 10% since the end of the last recession. The Chicago Federal Reserve Board points out that the current recovery is out of character with past experience. Even in the 1990s jobless recovery, the nation’s manufacturers recovered ahead of the rest of the economy in terms of output and jobs. In contrast, manufacturing output did not recover into 2003, 2 years after the end of the most recent recession.

Why should those of us who don’t work in factories? Is this just a natural transformation of our economy from manufacturing to services, information and finance? Here’s a few reasons:

1) Manufacturing outpaces the rest of the economy in productivity growth. Productivity growth among manufacturers – the amount of output per hour – has averaged 5.67% per year over the past four years, more than 1.5 times overall productivity growth in the rest of the economy. Inequality effects aside, productivity growth is related to the overall prosperity per nation. The more wealth per hour that the nation can produce, the more there is to go around. To the extent that our economy continues to lose productive jobs, our relative prosperity will shrink.

2) Manufacturing has been a source of well paying jobs for Americans with less than a college degree. The hourly wage premium earned by manufacturers compared to other workers has faded away in recent years as the sector has become less unionized and foreign competition has pushed down wages. However, these are still the largest source of decent jobs for lesser educated Americans. The three biggest employing sectors of high school graduates in 2004 were Manufacturing, Retail & Wholesale Trade (think Walmart) & Educational / Health Services (think your local nursing home). Wages in factories allow families to approach something closely to middle class ($35,000 a year) while major service sector industries do not.

Average Weekly Earnings of High School Graduates, Age 18-64, 2004[i]

Finally, there is the piece about politics. Liberals complain how the middle of the country has turned conservative. Clearly some Democrats care about manufacturing jobs. But when the rubber has hit the road – as in the case of NAFTA – Democratic leadership or key individual Democrats have went the way of polices that lead to manufacturing job losses. And its more than just specific policies (which include currency issues, education & training, economic development, employee ownership laws & other layoff aversion strategies, research & development, as well)—it’s image too. I remember watching a 2004 South Carolina senatorial debate between Inez Tennenbaum and Jim Demint, where she was speaking out against devastating trade policies for textile workers. His quick retort was to link her to John Kerry – outwardly changing the subject to social issues but effectively linking her to a national party that has not clearly stood firm on economic issues.

The liberal elite are clearly bi-coastal – and just don’t feel this issue in its gut – the way those of us who are from the Midwest and have seen communities gutted by closed factories do. Most recently, I have been struck by how little media coverage there has been about the potential disastrous effects of auto restructuring on families and communities in the Ohio, Michigan and Indiana. For fun, I decided to match the states with the highest concentration of manufacturing jobs with recent election results. Despite the CW, manufacturing states are no longer blue states. Instead a solid manufacturing policy could tilt the political balance in at least one crucial battle ground state (Ohio) and provide an entrée into making border or Southern states competitive. Such a policy won’t be easy given the changing nature of manufacturing employment – but it is an area where progressives could have an advantage if we spend the time getting it righ.

States with more than 15% Manufacturing Jobs and Recent
Presidential Elections

[i] National Employment Law Project calculations of Current Population Survey Data

Monday, May 01, 2006

South of the Border - The Other Side of the Immigration Debate

By Becki Smith, National Employment Law Project Staff Attorney

In the past few weeks, the massive mobilizations organized by immigrants around the country have brought hope to the movement for comprehensive immigration reform. However, as immigrants’ voices nationwide have been raised for true reform that respects human rights and workers’ rights, conservatives have pulled out an old argument – Mexico-bashing.[1] Recently, press stories have circulated about Mexico’s human rights record related to immigrants, as if this gives license to the U.S. to treat workers into felons, further militarize its border, and deny basic rights to six million working people in our country. These arguments miss the point.

First, no one would argue that Mexico has a stellar record when it comes to protecting the basic human rights of immigrant workers in that country. But Mexico has made efforts to analyze its own human rights record and improve upon it. In November, it became the first migrant-receiving country in the world to submit a lengthy report analyzing its own compliance with the United Nation’s International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families. This week, in Geneva, the UN Committee charged with oversight of the Convention began reviewing that report. Community groups from Mexico and around the world provided additional data and questions about Mexico’s report, which will be further examined in the fall. The US, on the other hand, hasn’t even ratified the Convention.

Second, human rights standards are principles by which all countries in the world should live. They are not intended as excuses for countries to point fingers and smugly declare that as long as conditions in one country in the world are worse, no effort is needed. In fact, the US would do well to consider the internationally-protected right to life as it further militarizes the border, forcing unsafe border crossings that result in 400 deaths a year. Congress should consider human rights standards as it contemplates denying basic due process rights to immigrants. Finally, Congress should take into account basic labor rights standards as we continue to deny full labor protections to undocumented immigrants.

Finally, the immigration debate in the US could be furthered by a better understanding of the effects of globalization in Mexico. It has been 12 years since Mexico joined the United States and Canada to create a huge single market for goods and services under the North American Free Trade Agreement. While globalization has been good for the rich in both countries, it has wrought more poverty and more pressure for Mexicans, especially the rural and urban poor, to migrate north.

American workers understand the grim job loss picture here at home. We have less understanding of globalization’s effects in Mexico, where in the first year of NAFTA, more than a million jobs were lost. In the Mexican countryside, more than 1.5 million farmers have been driven off their land by heavily subsidized U.S. corn and other agricultural products. Tens of thousands of small businesses have also been driven out as products they once made are outsourced to even-cheaper Asian countries.

The maquiladora factories along the border, once touted as a means to bring wealth to the Mexican poor, have not made up for the job loss. When U.S. consumers stopped buying as the recession hit in 2001, maquiladoras also began shedding workers. The Mexican government estimates that more than 400,000 jobs disappeared in the process.

As unemployment and economic desperation in Mexico have increased, immigration to the United States has been the only hope of survival for millions of Mexicans. Unless we roll up our sleeves and address these root causes of migration, human rights records in all of the Americas will deteriorate, while migration increases. On May 1, and every day, workers have a chance to stand together for the advancement of just, fair and humane immigration, trade and labor policies.

[1] See, J. Michael Waller, “Mexico’s Immigration Law: Let’s Try it Here at Home,” providence Journal (April 24, 2006),; Mark Stevenson, ‘Mexico Harsh to Undocumented Migrants,” Associated Press (April 18, 2006); “Mexico asks US to do as it says, not as it does,” Arizona Star, (April 20, 2006).
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