Over the last 5 years, the manufacturing sector has taken a tremendous hit. Total number of jobs has precipitously declined. Manufacturers are taking advantage of international wage arbitrage and sending jobs overseas. The trade and balance of payments deficits have ballooned, indicating the US is sending a larger percentage of its wealth overseas instead of reinvesting in the US.
According to the Bureau of Labor Statistics, the US had 17,101,000 manufacturing jobs in January 2001. September’s preliminary number was 14,234,000. This is a loss of 2,867,000 jobs in 5 years. Higher productivity is part of the reason for this decrease; factories are now able to essentially produce more with less. However, an increase in productivity is not the sole cause of this loss. When companies can produce a good in another country for less because the labor costs are far lower, they will move the factory. Regrettably, the US does not keep statistics on the number of jobs lost directly to foreign displacement.
Manufacturing jobs pay well. According to the Bureau of Labor Statistics, the September average hourly wages of production workers was $16.57/hour, or $31,814/year. While this is not a “king’s ransom”, it’s not bad.
The National Association of Manufacturers has statistics on each state’s manufacturing jobs. I looked several of the larger states and found the following.
California had 1,857,000 manufacturing jobs in 2000 and 1,539,000 in July 2005 for a net loss of 318,000. The average annual manufacturing pay in 2003 was $56,500.
Texas had 1,068,000 manufacturing jobs in 2000 and 891,700 in July 2005 for a net loss of 177,000. The average annual manufacturing pay in 2004 was $51,300.
New York had 750,000 manufacturing jobs in 2000 and 581,000 in July 2005, for a net loss of 169,581. The average annual manufacturing pay in 2004 was $50,254.
The bottom line is the US is literally bleeding high paying manufacturing jobs. These are jobs that helped to create and sustain the middle class – the backbone of the economy. By letting these jobs disappear, the US is turning its collective back on the middle class, allowing them to fall into economic ruin.
We were one of the families in California hit by that. We were given ONE DAY’s NOTICE. My husband was an engineer in the R&D. No job is safe in America. Especially when Bush is handing out BONUSES to companies to move to places like Malaysia.
and I have hopes that will work as a unifying theme to get Democrats elected. But why can’t we also unify around “Republican economies send your jobs to China?” It’s true, it’s patriotic, jingoistic even.
(Yes, it’s a rhetorical question. Democrats are only slightly less bought and paid for right now, but we can change that too.)
Those numbers are staggering, thanks Bonddad. At least Bush created one new job: he replaced Libby with two cronies.
You and I paid our taxes which were used to bully these manufaturing companies to move overseas. Our government PAID them BONUSES to MOVE.
Komag Material Technologies was paid 20 million motherfucking dollars to move to Malaysia.
TWENTY MILLION.
and then we got a piddily severance check – which Bush taxed as a bonus check at an obscene rate. So we basically got shit.
Our family is STILL trying to play catch up on that one.
SO it’s not that the companies are finding better deals overseas – our government is paying them to move. In some cases, they BULLY them into moving.
Sorry, wasn’t ranting AT you 🙂 Just WITH you. 🙂
Of course I understood that. I’m sure glad we’re on the same side.
Lost in all the Wall Street news/gossip on the cable networks is any real indication that the Real Economic World is closing in on us. Also lost on the Greed is Good folk is the notion that manufacturing is a crucial element of National Security.
The lack of information from the White House is part of the problem. Don’t like news about outsourced jobs? Just don’t keep track of it! Don’t like news about discouraged workers? Don’t keep a record of them! It’s what we aren’t hearing that’s killing us.
Well, it’s definitely an issue for me-laid off factory worker and my husband has just had his third pay cut in a year. And we weren’t highly paid to begin with. And the owners/ceos still reap massive profits every year while telling us to -quoting from my husbands pay cut meeting-pare back, cancel cable, lose the cell phone etc etc. All well and good but when asked how much of a cut management was taking there was a long pause and then the usual news, none. Only actual workers take cuts, bosses don’t.
Sorry, I’m ranting but it’s a sore subject and if Dems would speak up about it they’d garner a heck of a lot of working class votes.
This is one place where we can vote with out money.
In addition to buying from blue companies, we make an extra effort in our house to buy U.S. made products. We also make a super extra effort not to buy Made in China. It is not as hard as it seems…look at the tag and think long and hard about whether you really want something that cost American jobs. If we can’t buy American we buy from other countries instead – Canada or from Europe or small businesses in smaller countries. (Check out http://www.tenthousandvillages.org/ for unique stuff!)
This also plays well in ‘red regions’. The local store in the mountains of CA where we shop when on vacation and holidays is in an area that votes 60% or more Republican.
One day I was looking for knick knacks…all made in China. In asking the owner…she was shocked…hadn’t considered where they were made. She had one item made in the U.S. – the one item I bought. All of the people in the store agreed with me! She now shops for American made products – and I make it a point of buying one each trip.
Old fashioned “buy American”…yes…but it works.
With our money (not with out!)
Given the employment situation for many… Voting with or without money… Either/and/or… It is all plausible.
Bonddad once again I recommend. Outside of your bizarre admiration for Paul Volker your right on every time. 🙂 Another excellent diary on the Bush economy. We’ve lost close to 20% of our manufacturing jobs in the last five years. My God, thats massive dislocation and financial distress.
Sometimes the economic medicine sucks. Volcker did what was necessary at the time. That doesn’t mean I am happy with what he did.
And we are approaching a time when similar action will be necessary. The balance of payments deficit was 5.5% of last years GDP. It will be higher this year.
I understand there were no good options they had to stifle demand.