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Are Manufacturing Jobs Joining the “Walmart Economy?”

Amy Traub

Manufacturing jobs were supposed to be the good jobs.

They are, as the subtitle of a devastating new report from the National Employment Law Project points out, the jobs that “built America’s middle class”—enabling generations of workers without a college degree to raise their families with dignity and a middle-class standard of living. In recent decades, as the U.S. economy has lost manufacturing work to technological advance and off-shoring to other countries, the service sector has made up a growing share of American jobs.

Yet many service sector jobs—particularly many positions in the booming retail, hospitality, and health care industries—don’t offer family-supporting wages, regular hours, or the comprehensive health care, retirement, and other benefits that made manufacturing jobs into high quality positions. One could draw an easy conclusion: to rebuild the middle class, we just need to bring to back American manufacturing.

The problem is, manufacturing jobs aren’t what they used to be.

NELP’s report marshals data to show that although manufacturing jobs once paid a wage significantly higher than the U.S. average, the average factory worker actually made 7.7 percent below the median wage for all occupations in 2013. Today, more than 600,000 manufacturing workers make just $9.60 per hour or less. More than 1.5 million manufacturing workers—one out of every four—make $11.91 or less.  And while there has been a particular resurgence in U.S. auto manufacturing jobs since 2009, auto wages have declined even faster than manufacturing pay as a whole. The rise of temp jobs in manufacturing is a key reason for the decline in job quality, with these jobs offering fewer benefits and generally worse working conditions in addition to the lower wages.

In the New York Times, study co-author Catherine Ruckelshaus points to the substantial subsidies that the federal, state, and local governments have offered companies in an effort to lure factories and manufacturing jobs. “If you are getting a tax break or a subsidy, we should make sure those jobs are good jobs,” Ruckelshaus asserts. It’s a critical point, given the way subsidies can deplete already-strained public budgets in pursuit of “good jobs” that never quite materialize. The conclusion, stated more explicitly in some of NELP's other work, is that public subsidies and tax breaks should be tied to concrete measures of job quality, with an opportunity for the subsidy to be rescinded if the promised well-paying positions aren’t generated. Living wage laws are one proven way to do this.

Yet the declining quality of manufacturing jobs also has deeper implications.

The mystique of manufacturing jobs as “good jobs” that can sustain the nation’s middle class obscures the reality that industrial work was not especially well-compensated until the labor militancy in the first half of the twentieth century unionized factories and raised job standards. A powerful labor movement, rooted in manufacturing, built the middle class. With workers in a far weaker state today—especially in the states that have seen the greatest resurgence in manufacturing employment—it is not a surprise that the quality of industrial jobs has declined. When workers don’t have the power (whether embodied by laws, collective bargaining, or a mechanism like worker-ownership) to insist that manufacturing jobs be “good jobs,” they won’t be.

On the flip side, if manufacturing doesn’t have inherent “good job” properties and it is instead workers’ collective power that determines whether job quality in an industry is high or low, this suggests that traditionally low-paid service sector jobs can also be transformed into positions that sustain a middle-class standard of living.

We can see this in the case of unionized hotel workers in New York City. It’s the animating force behind the “Fight for 15” in all its growing incarnations in the service sector, as home health care workers, retail employees, and fast food workers organize and strike to improve the quality of their own jobs.

The downgrading of American jobs into positions with low pay, erratic and insufficient schedules, and few benefits has been described as the creation of a “Wamart Economy” because of the role the nation’s largest employer has played in promoting the low-road employment model, (despite its high profits) squeezing suppliers and vying with competitors until many adopt the same practices. With American manufacturing heading down the same road, and many jobs for college graduates caught in a disturbingly similar spiral, it becomes more difficult to look to manufacturing or education to save the middle class.

Instead, it may be the employees of Walmart itself who have the right idea: walking out on strike on strike on November 28—the biggest shopping day of the year—to call for better wages and working conditions. To support them, go to