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A Backlash Brews Against Low Pay On The Factory Floor

Dec 23, 2014
Originally published on January 4, 2015 2:53 pm

Forty years ago, a manufacturing job was often a ticket into the middle class. That's not the case today. Wages for manufacturing jobs are plummeting, and some states are questioning whether competing for those jobs is still worth it.

For Cynthia Hunter, a $9-per-hour manufacturing job offer meant she could stay in the workforce after taking a buyout from her management job at Exxon Mobil in 2012.

"I was scared to stay out of the marketplace," says Hunter, 58. "I mean, I have worked all these years, and I never in my life collected unemployment — ever."

Her low pay at Kace Logistics in Detroit was a shock, but at least she doesn't have children to feed and clothe, she says. "Everyone there at this plant — everyone — has like, a second job, something else that they do," Hunter says.

Here's the good news: In the U.S., 350,000 manufacturing jobs came back after the recession. Here's the bad: Many pay much less now. Real wages for auto supplier jobs have fallen 14 percent since 2003, even as the average for all jobs declined only about 1.5 percent, according to a study from the National Employment Law Center.

Catherine Ruckelshaus with the National Employment Law Project says $9 an hour is all too common for manufacturing jobs these days. "Some good jobs do remain, but too many of them resemble positions at Wal-Mart and McDonald's," she says. "The companies simply aren't feeling the pressure from anywhere to do right by their workers."

Ruckelshaus wonders why states still dangle huge incentives before manufacturers. Nissan, for example, got $1.3 billion in financial incentives from Mississippi for a new factory, according to a study from the nonprofit organization Good Jobs First — all for jobs that pay $12 an hour.

Of course, many people would say, better a low-paying job than no job at all, but some states are starting to demand a bigger bang for their buck. For instance, Michigan now puts cash on the table, but no tax breaks.

"We don't give them the money in advance, where it's all spent. We give it to them as they meet the commitments that they've made," says Mike Finney, head of the Michigan Economic Development Corp. And, Finney says, the state only chases jobs with above-average pay.

Still, there's nothing states can do about NAFTA and Mexico; Mexican auto workers earn between $2.50 and $5 an hour.

Sean McAlinden, an economist with the Center for Automotive Research, says Southern states tried to compete both with the Midwest and with Mexico. But for jobs that can still be shipped away, he says, forcing manufacturers to pay more would very likely accelerate the loss of jobs to Mexico.

"The Southerners, you could say, got the work based on cheaper wages than the old Upper Midwest," he says. "And now, if you live by the cheap wage, you die by it."

Some jobs can't be relocated, like Hunter's, inspecting and placing parts in sequence for the assembly plant next door.

Hunter got fed up with the low pay, she says, and decided to organize her plant this summer. Four weeks ago, workers at Kace signed their first union contract and got a $2-an-hour raise.

Meanwhile, there's another free trade agreement looming: the Trans-Pacific Partnership, a deal with Malaysia, Singapore, Vietnam, Japan and seven other countries.

But concerns that the agreement could put more downward pressure on U.S. wages is sparking opposition to the deal, especially from members of Congress who represent states with a heavy reliance on manufacturing jobs.

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AUDIE CORNISH, HOST:

Forty years ago, a manufacturing job could be considered a ticket into the middle class. Today, wages for manufacturing jobs are plummeting. And, as Michigan Radio's Tracy Samilton reports, some states wonder if fighting for those jobs is still worth it.

TRACY SAMILTON, BYLINE: Cynthia Hunter is a 58-year-old dynamo - some would say a workaholic. Hunter retired from a first career in her early fifties, became a manager at Exxon Mobil, then took a buyout when the company sold its gas stations.

CYNTHIA HUNTER: I was scared to say out of the marketplace. I mean, I had worked all these years and I never in my life collected unemployment, ever.

SAMILTON: So in 2012, Hunter took a $9 an hour job at Case Logistics in Detroit. The low pay was a shock, but at least she doesn't have children to feed and clothe.

HUNTER: Everyone there at this plant - everyone - has, like, a second job - something else that do.

SAMILTON: Catherine Ruckelshaus, with the National Employment Law Project, says $9 an hour is all too common these days.

CATHERINE RUCKELSHAUS: Some good jobs do remain, but too many of them resemble positions at Walmart or McDonald's.

SAMILTON: Here's the good news. Three-hundred-fifty-thousand auto manufacturing jobs came back after the recession. Here's the bad - many pay much less now. Real wages for auto supplier jobs fell 14 percent since 2003, even as the average for all jobs fell only one-and-a-half percent.

RUCKELSHAUS: The companies simply aren't feeling any pressure from anywhere to do right by their workers.

SAMILTON: Ruckelshaus wonders why states still dangle huge incentives before manufacturers. Nissan got 1.3 billion dollars from Mississippi for a new factory, plus a 25 year tax break, all for jobs that pay $12 an hour. Now, many people would say, better a low-paying job than no job. But some states are starting to demand a bigger bang for their buck. For instance, Michigan now puts cash on the table, but no tax breaks. Mike Finney is head of its Economic Development Corporation. [POST-BROADCAST CORRECTION: We incorrectly say that Nissan received $1.3 billion, plus a 25-year tax break, from the state of Mississippi to build a factory. In fact, the $1.3 billion figure includes the value of the tax break.]

MIKE FINNEY: We don't give them the money in advance where it's all spent. We give it to them as they meet the commitments that they've made.

SAMILTON: And Finney says Michigan only chases jobs with above-average pay. Still, there's nothing states can do about NAFTA and Mexico. Mexican autoworkers earn between $2.50 and $5 an hour. Sean McAlinden, an economist with the Center for Automotive Research, says southern states tried to compete both with the Midwest and Mexico.

SEAN MCALINDEN: The Southerners, you could say, got the work based on cheaper wages than the old upper-Midwest. And now, if you live by the cheap wage, you die by it.

SAMILTON: But he says forcing manufacturers to pay more would likely accelerate the loss of jobs to Mexico, for jobs that can still be shipped away. But some can't, like Cynthia Hunter's job, inspecting and placing parts in sequence for the assembly plant next door. Hunter got fed up with the low pay and decided to organize her plant this summer.

HUNTER: People were scared and, I mean, don't get me wrong, I couldn't lose my job at the time, but I just wasn't scared. I knew that there was something better out there.

SAMILTON: Workers at Case signed their first union contract four weeks ago, and got a $2 an hour raise. Meanwhile, there's another free-trade agreement looming - the Trans-Pacific Partnership, a deal with Malaysia, Singapore, Vietnam, Japan and seven other countries. There's concern it could put more downward pressure on U.S. wages. That's sparking opposition to the deal, especially from members of Congress who represent states with a heavy reliance on manufacturing jobs. For NPR News, I'm Tracy Samilton. Transcript provided by NPR, Copyright NPR.