Manufacturing is not the Issue

Okay, one last substantive post till Monday when I move into my new digs and find out what classes I'll be teaching.

 

Every now and again, center-left blogger Matthew Yglesias posts a link showing the rise of American manufacturing output over the last 40 years.  This chart is usually met with howls of derision in the comments, with people noting that it is a lie by which we conceal how our evil corporate masters have sent all of the good jobs overseas. 

 

Musician James McCurtry's "We Can't Make it Here Anymore" poignantly expresses his feeling on so-called free trade: "Should I hate a people for the shade of their skin/ Or the shape of their eyes or the shape I'm in/ Should I hate 'em for having our jobs today/ No I hate the men sent the jobs away."1

 

But the over-educated left-wing white guy who'd never acutally work at The Plant and James McCurtry are both actually missing the point.  The issue isn't really manufacturing.  When people lament the decline of American manufacturing, they're using manufacturing as a shorthand for, "Unskilled job that you can get right out of high school that pays middle class wages and provides benefits."  In America of the mid-20th century, such jobs were in fact manufacturing. 

 

We lament that manufacturing jobs have gone away.  But there are still plenty of unskilled jobs of the sort that one can do right out of high school or always hold as the back up option if one decides to drop out of college.  I recently spent eight months in one.I had a co-worker who had done this job for a while after dropping out of college to support his kid who eventually decided that he was going nowhere and joined the army.  But this job paid jack and s***.  Seriously, I busted my a** for pay similar to that of a Starbucks barista.  But why exactly was the pay so low?  Moving boxes pays fairly well for UPS workers, but then UPS workers also happen to be members of the Brotherhood of Teamsters.  And therein lies the issue.  When people say "manufacturing," they ought to be saying, "unionized work."


I remember one of the greatest shocks that I got in an undergraduate course came in my one semester of Texas History.  In a lecture on something happening in the early fifties, the instructor mentioned a strike by the retail employees' union.  I heard that, and I was simply agog that folks in retail could unionize.  "Wait," I thought, "Aren't unions for folks who get paid thirty dollars an hour to screw on lugnuts?"

 

When I did my graduate work in Canada, when I was a TA, I was part of a union, and, to be precise, the Canadian Union of Public Employees, Local 3902, Unit 1.  Contract instructors (what we call adjuncts in the States) were part of Unit 3.  At times the union was annoying.  The leaders were full-on Marxists (not in the anyone left of Grover Norquis sense that American conservatives use, but actual reds of the Trotskyite variety).  They talked about how we were exploited workers (at 37+ dollars an hour) and were always threatening to strike.  But...  (And hear I quote from an earlier Forvm comment of mine): The union was good for us.  For example, in August of 2008, the University of Toronto announced
that their announced   increase in funding of doctoral students was not going to happen. Their promise to increase funding, they said, had been
a promise to think about  increasing funding. Now then, this promise
had come about as a settlement to a previous threat to strike by the
TAs' and contract instructors' union. So when the university decided to
renege on its promise, this same union went to the Ontario Labour Board
and said, "Oh, no you don't." Within a week, the university backed
down and doctoral students got their pay increase.

 

Moreover, contract instructors in Canadian universities generally make three times what their American counterparts do.

 

I'm talking about retail employees and university instructors because these are both areas in which you don't particularly think of folks being unionized.  And yet, when unionized, they benefit greatly. 

 

So worrying about the sock or ironing board tariffs misses, I think, the bigger problem. Any uskilled work that exists could be made more renumerative if there were unions involved.  But even in times of employment that's right at 10%, the current America still sees unions as a collection of folks who just want to try and get away with less work for more money and who gin up artificial confrontations.  Now, in America of 2000, when we had full employment, and finding work was simply a manner of saying, "I think I'll get a job," I can understand how you would have had such an attitude.  And even in the aughts, where employment growth was not as good, but still okay, such an attitude made at least a bit of sense.  But in the current economic environment, it seems beyond all reason that more employees are not seeking to unionize so that they have at least a basic standard of living.

 

I'd say that in bad times, folks adopt a defensive crouch, but some of the greatest labor advances came in the 1930's, when jobs were really, really thin on the ground.  And yet folks who had jobs actively fought for, and won, some pretty impressive rights.

 

So why don't more so-called unskilled workers unionize?  And how much of a change in ethos would it take to make unionization happen?

 

----------------

1. James McCurtry appears a whole lot on NPR, whereas the country that one commonly hears on country stations... doesn't.  I leave why as an excercise for the reader.

 

2. A man with a PhD in Medieval Studies working in a warehouse might seem amusing in a Kurt Vonnegut/Joseph Heller sort of way, but it's really just kind of a sweaty, dirty job in which I was really tired at the end of the day.  Although using a forklift was fun.

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Service jobs will never replace manufacturing

(#223823)

You only need so many service workers to service a fixed local population-- even with expanded retail options.  More or less, service jobs are going to grow proportionally to population.  Manufacturing isn't tied to population-- or it is, but on a global level not a local one.  If your exports were high enough, you could increase manufacturing jobs over time even with a decreasing population.  The very sorts of jobs you can't offshore are ones that are required to serve local population, and thus rise and fall with that population.

 

We've been cannibalizing the wealth of the country for decades now.  One factory shuts down and the jobs are offshored-- costs some local community jobs, but in exchange the company's stock goes up, executives are paid more, and everyone in the country gets socks at a dollar per dozen.  Nobody notices or cares (except of course the former factory workers) and it's actually great for a while (again, except for the unlucky factory guys).  Eventually, so many jobs are gone that there's no longer enough wealth left to support the consumer demand even at cheaper prices.  At which point, easy credit (and stricter bankruptcy laws) can buy another decade.  If you get stuck then, you can put the government in debt funneling a bunch of wealth into the economy.  The preferred method is tax cuts to the upper class, cut treasury rates to make them poor investments, deregulate the financial industry, and then let them invent some Ponzi scheme to build a bubble around.  Once that crashes, you're probably out of options because its 2010.  Time to face the music.

I've been in both retail & college faculty unions.

(#223752)

In fact, in CUNY we had a big election to throw out the professional union flunkies and install some actual educators, and so went from handpicked Board of Trustees rollovers to a union actually interested in getting a better deal for us. As an adjunct I only saw a few benefits, but noticeable improvement. Nearly all schools and many retail chains are unionized...except Walmart. The thing is, these are jobs that aren't going anywhere. Service jobs, education, domestic shipping...can't ship those overseas. That's the basic reason why AFT, SEIU & the Teamsters, transit workers, gov't employees unions, etc. are powerful, while AFL-CIO's manufacturing unions are hurting. Any job that can be shipped overseas is a threat to unions; it means reduced bargaining power even if the job stays in-country.

 

Meanwhile a lot of white collar jobs, the salaried kind your typical college grad is going to pick up, those are *not* unionized. So in effect, every manufacturing job that ships overseas *is* replaced more or less; it's just replaced by non-union work.

"Hell is truth seen too late." --Thomas Hobbes

My wife worked retail and was in a union

(#223746)
Bird Dog's picture

At a supermarket.  Good benefits, tedious work.  It wasn't a bad deal for employer or employee, but the work was certainly tedious.

"Transparency and the rule of law will be the touchstones of this presidency."

--Barack Obama, January 2009

That's a good point.

(#223745)
Desidiosus's picture

[quote]So why don't more so-called unskilled workers unionize? And how much of a change in ethos would it take to make unionization happen?[/quote]

Because they think they should be paid poorly -- that they deserve their lot. I've interacted with a number of them, and that's pretty much it. They've bought the line that people are paid what they deserve, rather than what they demand.

"Assent, and you are sane."

 

Sounds like Socialism.

(#223811)
mmghosh's picture

Do academic economists in the USA say that that make good economic sense?  What's your take on Socialism in a general sense?

Academic economists are members of a sick cult.

(#223852)
Desidiosus's picture

Simply put, they don't believe their own models and hold to a religious view of what a free market is and its utility.

"Assent, and you are sane."

 

You know, when you start to say that an entire discipline

(#223858)

Is willfully ignoring the truth, you're starting to approach the same level as, "Climatologists are trying to gin up an excuse for socialism/ Biologists are trying to destroy faith in God/ whatever."

 

And before you respond with a claim of false equivalence or Broderism, I'd ask you to consider that extraordinary claims require extraordinary evidence.  I'd say that calling an entire discipline methodologically broken kind of falls under the category of extraordinary claims.

Oh Dear God.

(#223907)
Desidiosus's picture

Andrew, I'm an Econ ABD. I have a Master's Degree in the discipline.

I am nowhere near the only person sounding this drum -- Krugman, who has a damned Nobel Prize in the discipline, is saying the same thing, as is Brad DeLong.

"Assent, and you are sane."

 

Okay, fair enough

(#223935)

I had for some reason thought that you were in another social science.  My bad.

 

I'm going to have to ask, though (because I really don't know much about economics as a discipline): are straight out liberal economists like Krugman and DeLong really that much of a minority in the field? 

Just a sign of the times that they're "straight out liberal"

(#223961)

It shows how much conservatives have really won out.

 

Krugman and DeLong are free trade loving, pro-globalization, moderates.

Yes.

(#223949)
Desidiosus's picture

Suffocatingly so.

"Assent, and you are sane."

 

Not when it isn't a real science

(#223879)

Sorry, but economics is an unclean profession and many of the top economists are hacks. It's not all just at UChicago or George Mason.

 

Greg Mankiw teaches at Harvard. 

 

The econ profession is closer to law than to climatology.

Condemning economics as an Unclean Science

(#223883)

is to condemn considerably more than many top economists.  The science is reasonably good if the conclusions don't always seem good to any one individual.  Economics, like any prescriptive branch of science such as medicine, will make long- and short-term recommendations:   a fat dude in the gurney with a coronary occlusion needs oxygen, not a stern lecture on the evils of much steak-eating.   Or, taking your climatology example, all the climatologists in the world will not convince some people that burning coal is a bad solution to energy needs.  Even law is prescriptive:  if the goal is to attenuate homelessness, few people are willing to have the zoning ordinances amended to allow a homeless shelter in their neighbourhood.  

 

Just because you don't like the conclusions of economists doesn't mean they're bad scientists.   You just don't like their proposed remedies.

Economics isn't like the medical sciences

(#223889)

Medical hypotheses are tested.

 

Macroeconomic hypotheses are often couched in a model full of question-begging assumptions. Then if its consequences don't match with reality, reality is treated as noise.

 

Or you get people like Princeton educated and harvard employed Mankiw, who go work for a political org and, when convenient, pretend the intro textbook they authored isn't true.

 

There is no equivalent in the medical sciences.

... and medicine doesn't beg questions? Puh-leeze

(#223890)

Medicine is by definition prescriptive:  stop smoking, eat your veggies, get some exercise, reduce your stress levels.   Etcetera.   Economics is equally prescriptive:  reduce your balance of trade deficit, pay down your debt, fix your taxation, eliminate subsidies, create jobs.   But that's not what either doctors or economists do most of the time:  it's always some crisis or other, brought on by the patient failing to do the needful, and their solutions are geared to keeping the sick from dying, not making sick people or nations healthy.   Don't blame the economists for the crises they didn't create, any more than you'd blame the doctor for the patient's heart attack.

Of course I blame economists for their role in the financial

(#223897)

crisis.

 

Few saw a real estate disaster and financial crisis that was staring people in the face who didn't have ideological "unregulated markets approximate best information" blinders on. 

 

Worse, as a group, macro economists haven't shown much interest in revising their "science" in light of its failed predictions.

 

The business about medicine and econ both being prescriptive isn't really here nor there. If doctors gave you pills that demonstrably shortened your life they'd stop prescribing them.

 

When econ shows that level of responsiveness to recalcitrant data we can talk. Unfortunately a lot of the profession functions simply to provide fancy justifications for the aggregation of wealth.

Are you saying nobody was decrying all that cheap credit?

(#223899)

When the Fed kept playing fiscal Limbo... (how low can you go?), plenty of people foresaw trouble.   Greenspan's famous "irrational exuberance" line shows everyone understood these markets were hugely overvalued.  The problem wasn't the economists, the problem was the quants, digging at the end of the mine shaft long after the mother lode had petered out.   More cheap dollars in search of ever-riskier investments, more idiots applying for credit they didn't deserve, and people like me out there turning Citigroup rejection rule sets into pricing trees, giving high-interest loans where such applications would have been denied out of hand.

 

Medicine routinely gives people drugs that will shorten their lives.   The long-term implications of a lifetime of insulin injections isn't good, but it beats the alternative of dying quickly of diabetes.  Most cancer treatments are hell.   Antimalarials can cause liver damage.   Long-term use of oxygen damages the human lung and retina.  Damned near every prescription medication causes damage of some sort:  these damages are viewed to be less-important than the conditions they attenuate, but there's no free lunch here, patients are very seldom "cured" of anything.

 

Macroeconomics is by definition political:  one economists' desired outcome might be debt reduction.   Another might desire increased employment.   The first might argue with the second about which goal is more important, but it's no different than the previous paragraph.   Put a patient on oxygen, you will need to do pulse oximetry.   In their disagreement, these economists reveal the underlying complexities of policy decisions:  in the interests of lowering debt, taxes might be raised -- but how do we get more jobs and lower debt at the same time?    If economics doesn't seem responsive to recalcitrant data, let's not blame the data.   What's a response anyway, but a reaction?

Blaise,

(#223921)
Desidiosus's picture

you're just giving the conservatives in the profession far too much credit.

There is no such thing as an honest conservative economic argument. All of them are false. Friedman is far, far greater than his Friedmanites. Almost no economists are arguing for deficit reduction; most of them are arguing for entitlement reduction. But those arguments are religious in nature; entitlements are bad because entitlements are inherently bad. And because they're bad, we're allowed to lie about their causes and effects -- because they're so awful, that you can't say anything worse than they already are.

There's too much money in lying to support the interests of monied classes, and our elites have decided that they do better looting our country than living from its dividends. Add to that the autistic beauty of the economic assumptions . . .

Reagan won this one, a lot. And his legacy -- lousy economic growth and a lurching from debt crisis to debt crisis -- is continually denied by his supporters, both in the economic priesthood and in the laiety. There's no difference, because the priesthood isn't scientific.

"Assent, and you are sane."

 

Most of the time there is shared goals

(#223903)

Of course the "irrational exuberance" remark was used prior to the dot com bubble.

 

Greenspan did not foresee the real estate bubble and only later spoke of a "fundamental flaw" in his model.

 

Rather than seeking to modify the profession's understanding of the economy and educate the public about his errors, he's spent his time advocating for entitlement reductions.

 

Any doctor with an equivalent record would've been sued for malpractice and forced out of business by now.

Same goes for most of the rest of the profession

(#223913)

I meant to add.

I can't believe this is a conversation.

(#223911)
Desidiosus's picture

The economics discipline missed the largest financial crisis since the Great Depression.

There is video of a conference laughing at an economist daring to suggest it might be coming.

The entire purpose of the discipline is to prevent a repeat of the Great Depression; that is why it exists. Instead, it argued as one for a legal framework that all but guaranteed an equivalent crisis. The only reason it wasn't worse was that at least some of the restrictions on banks and other financial markets still remained, as yet undismantled.

There is no such thing as a "science" of economics, because there is no such thing as predictive power from the discipline. The consensus does not coalesce around reality; the charlatans are not denied status while the correct are not elevated.

It is a "social science" at best, and our current crop of leaders is no less ideologically blind than the Marxist wall that used to characterize Political Science departments -- which, equally, failed to predict the collapse of the Cold War.

"Assent, and you are sane."