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Reich: Manufacturing Is Not Our Salvation

The rallying cry to rebuild America’s manufacturing base is finding resonance in the Rust Belt, the region most affected by its collapse and most likely to decide the outcome of November’s election. As Republican primaries make their way through Michigan and toward Ohio, manufacturing has become a central talking point of candidate outreach to working class voters that politics has alienated in the past two years.

But Robert Reich, former Secretary of Labor under President Clinton, is refuting claims that reviving manufacturing will help support the Middle Class. His piece, “Manufacturing Illusions,” looks into the candidates’ plans for rebuilding manufacturing:

Mitt Romney says he’ll “work to bring manufacturing back” to America by being tough on China, which he describes as “stealing jobs” by keeping value of its currency artificially low and thereby making its exports cheaper.

Rick Santorum promises to “fight for American manufacturing” by eliminating corporate income taxes on manufacturers and allowing corporations to bring their foreign profits back to American tax free as long as they use the money to build new factories.

President Obama has also been pushing a manufacturing agenda. Last month the President unveiled a six-point plan to eliminate tax incentives for companies to move offshore and create new lures for them to bring jobs home. “Our goal,” he says, is to “create opportunities for hard-working Americans to start making stuff again.”

Meanwhile, American consumers’ pent-up demand for appliances, cars, and trucks have created a small boomlet in American manufacturing – setting off a wave of hope, mixed with nostalgic patriotism, that American manufacturing could be coming back. Clint Eastwood’s Super Bowl “Halftime in America” hit the mood exactly.

Manufacturing jobs, Reich claims, appear more formidable in theory than in practice because modern manufacturing has replaced manpower with robotics to promote efficiency. The wages earned can no longer support families on the broad scale. Reich argues that the manufacturing jobs of old were only high-paying because workers were represented by unions:

Even the once-mighty United Auto Workers has been forced to accept pay packages for new hires at the Big Three that provide half what new hires got a decade ago. At $14 an hour, new auto workers earn about the same as most of America’s service-sector workers.

GM just announced record profits but its new workers won’t be getting much of a share.

In the 1950s, more than a third of American workers were represented by a union. Now, fewer than 7 percent of private-sector workers have a union behind them. If there’s a single reason why the median wage has dropped dramatically for non-college workers over the past three and a half decades, it’s the decline of unions.

How do the candidates stand on unions? Mitt Romney has done nothing but bash them. He vows to pass so-called “right to work” legislation barring job requirements of union membership and payment of union dues. “I’ve taken on union bosses before, ” he says,” and I’m happy to take them on again.” When Romney’s not blaming China for American manufacturers’ competitive problems he blames high union wages. Romney accuses the President of “stacking” the National Labor Relations Board with “union stooges.”

Rick Santorum says he’s supportive of private-sector unions. While in the Senate he voted against a national right to work law (Romney is now attacking him on this) but Santorum isn’t interested in strengthening unions, and he doesn’t like them in the public sector.

President Obama praises “unionized plants” – such as Master Lock, the Milwaukee maker of padlocks he visited last week, which brought back one hundred jobs from China. But the President has not promised that if reelected he’d push for the Employee Free Choice Act, which would make it easier for workers to organize a union. He had supported it in the 2008 election but never moved the legislation once elected.

The President has also been noticeably silent on the labor struggles that have been roiling the Midwest – from Wisconsin’s assault on the bargaining rights of public employees, through Indiana’s recently-enacted right to work law – the first in the rust belt.

And therein lies the problem with the manufacturing argument: it burns the candle at both ends by wanting these jobs to return while simultaneously weakening the unions which make these jobs viable lifelines. Union organization created those wages, not the employers. When the global economy took hold, aided in part by the Internet, employers flocked to where labor was the cheapest, and that was not the United States (thank goodness).

Reich suggests that telling the men at the bar that their factory can be reopened, when any honest observer views this path as grim, provides little more than a band-aid of false hope. He contends that new industry must be championed over old. While a rebirth of American manufacturing would certainly not hurt our economy it may not be the sustainable fix promised by politicians. It could be nothing more than a finger in a hole in a dam.


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