September 13, 2013: Much ado about manufacturing pay

Posted by LDonia on 09/13/2013

Good morning,

An interesting little interview popped up in the Wall Street Journal yesterday: With the gap in pay between American and Chinese workers shrinking, writes Andrew Browne, don’t be surprised to see more manufacturing jobs reshored.

A temporary-staffing company executive, speaking with Browne, sees it this way: Wages are no longer a citable, reliable reason to keep manufacturing jobs offshore.

He cited the example of a new auto factory in the U.S. offering hourly pay of $12 to $14 for entry-level jobs, including benefits. That compares with $7 to $8 in China. That’s a dramatic change in relative pay from just a few years ago, when similar jobs in the U.S. paid up to $40 per hour. And the trend is accelerating: wage inflation in China has averaged 15% to 18% each year for the past five years, Mr. Joerres said, and it is likely to hit 20% this year as China rebalances its economy toward consumption.

That’s true. But lest anyone forget, China’s enormous economic growth over the last decade has been helped along by a healthy regimen of government subsidies for key industries. Washington, meanwhile, doesn’t even have a national manufacturing strategy. But there’s no time like the present, Capitol Hill! We’ve got a list of policies right here you could use as a jumping-off point.

Elsewhere around the web:

The good news: Women have regained all jobs lost during the Great Recession. The bad news: Men have 2.1 million more to go, reports the Associated Press. And more bad news:

Lower-wage industries, like retail, education, restaurants and hotels, have been hiring the fastest. Women are predominant in those areas. Men, by contrast, dominate sectors like construction and manufacturing, which have yet to recover millions of jobs lost in the recession.

In the waning hours of its 2013 session, the California legislature voted to give the state's lowest-paid workers a 25 percent raise, write Josh Richman and Mike Rosenberg for the San Jose Mercury News. That makes the Golden State’s minimum wage the highest in the nation. Gov. Jerry Brown has already promised to sign the bill.

Meanwhile, a bill that would have required large retailers (with lots of low-income workers) to raise their base pay to $12.50 an hour got a big ol’ veto from Washington, DC Mayor Vincent Gray.

Immigration actually creates and saves jobs -- and that’s especially the case in the manufacturing sector. So says a new study commissioned by the Council of Americas and the Partnership for a New American economy, reports Alain Sherter for CBS News. It found “for every 1,000 immigrants who live in a county, 46 manufacturing jobs are created or preserved.”

Related, today’s solid manufacturing fact:

The steel industry in the United States directly employs close to 154,000 at over 100 plants around the country. Each one of those jobs supports another seven jobs in the U.S. economy.

Holy smokes! That’s quite the return-on-investment.

Enjoy your Friday.


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