Manufacturing Jobs and Unions
Just talking jobs in factories and how they improved after unions took hold in the plants and industries. Most definitely a plus for throughput, productivity, and attitude. It did foster a different atmosphere on the shop floor. Labor felt like they had a place in the business albeit on the shop floor, etc.
“Manufacturing Jobs: Unions Made Them Good, Not the Factories”
Dean Baker
The effort to bring back manufacturing jobs has been a major theme in the 2024 election. Both parties say they consider this a high priority for the next administration. However, there is a notable difference in that the Biden-Harris administration has actively supported an increase in unionization, while the Republicans have indicated, at best, neutrality if not outright hostility towards unions.
This distinction is important in the context of manufacturing jobs. Many people seem to assume that manufacturing jobs are automatically good jobs, paying more than non-manufacturing jobs.
While that was true four decades ago, before the massive job loss of manufacturing jobs due to trade, it is not clear this is still the case. The figure below shows the average hourly pay, in 2024 dollars, for production and non-supervisory workers in manufacturing and elsewhere in the private sector.[1]
As can be seen, workers in manufacturing had a substantial edge in pay at the start of this period, earning a premium of more than 5.0 percent over their counterparts in other industries. However, this flipped in 2006, and since then pay for non manufacturing workers has outpaced pay for workers in manufacturing. In the most recent data, non manufacturing workers get almost 9.0 percent more in hourly pay than workers in manufacturing.
To be clear, this is not a comprehensive comparison of relative pay. A full comparison would have to incorporate benefits and also adjust for differences in the workforce, such as education and location. An analysis done by Larry Mishel at the Economic Policy Institute in 2018 found that there was still a substantial premium for manufacturing workers over the years 2010-2016 when controlling for these factors. A more recent analysis from the Federal Reserve Board found that this premium had disappeared altogether, even when controlling for these factors.
While further research may produce different results, there is little doubt that the manufacturing premium has been sharply reduced, if not eliminated altogether, over the last four decades. The main reason for the decline in the premium is not a secret. There has been a huge drop in the percentage of manufacturing workers who are unionized.
In 1980, 32.3 percent of manufacturing workers were union members. This compares to a unionization rate of 15.0 percent for the rest of the private sectors. By comparison, in 2023 just 7.9 percent of manufacturing workers were union members, only slightly higher than the 5.9 percent rate for the private sector as a whole.
The implication of the loss of the wage premium coupled with the decline in unionization rates is that there is little reason to believe that an increase in the number of manufacturing jobs will mean more good jobs unless they are also unionized. It is not the factories that make these jobs good jobs, it is the unions.
[1] The category of production and non-supervisory workers includes roughly 80 percent of the workforce. It excludes managers and highly paid professionals, so changes in pay at the top end will not have much impact on these data.
The decline of unionization is in large part responsible for the huge increase in pay of upper management compared to that of workers; because managers needed to justify their pay while negotiating with union representatives, who demanded insight into company finances.
Unfortunately, attitudes toward unions are fed by a profound misunderstanding: that they are, or should be, moral actors. This misunderstanding stems from the legacy of support for unionization by progressives. Instead, unions are and should be selfish actors in the economic sphere. Unionization promoted middle class prosperity by decentralizing economic power away from the concentrated power of unions of capital (corporations). It is not greed per se (an inevitable component of human nature), but concentration of power, that grinds down the powerless.
Rick, your comment got me thinking. The easy objection is that we are all moral actors even as individuals in some ways with regards to how we make a living. It can’t be neatly separated out between a private sphere and a public sphere.
But I imagine you are saying a labor union should act more similar to say an actor’s agent or perhaps a personal attorney and only focus on one particular contract or only on issues that affect the current union membership at that point in time. And that therefore, a union shouldn’t concern itself with supporting things like federal minimum wage laws, or child labor laws, or civil rights, or politics in general. But I would again argue that these can’t and shouldn’t be neatly separated from what you might consider a labor union’s primary role.
Maybe if you gave me an example of what kind of union activity would fall under being a misguided ‘moral actor’ ?
Perhaps an infelicitous word. By ‘moral actor’ I wasn’t referring to the philosophical term of art. I was speaking in an informal sense, refuting the belief that a union should be anything other than a self-interested participant in economic exchange, like the butcher and baker that feed you.
As the name implies, a “union” consists of more than one and so using the term “self interest” in respect to union goals is problematic. I’m sure you would agree that the union leader who puts his personal self-interest above that of the union members would be a bad union leader. But I agree with you that we want to understand the effect of unions in terms of power relationships between capital (corporations) and labor. The primary economic power a union has is rooted in its ability to withhold the labor of its members. But a good union will also try to exercise some political and social power on behalf of its membership. To what extent that should be done can be reasonably argued about.
Thanks for your comment and your reply.