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Manufacturing jobs returning to U.S. as southern labor standards drag down wages

Study credits the surge of manufacturing jobs in the American south, where labor standards are low and regulation is less stringent than the rest of the U.S., with hurting workers' wages.

By Matt Bradwell
Workers at a Ford assembly plant. UPI/Brian Kersey
Workers at a Ford assembly plant. UPI/Brian Kersey | License Photo

NEW YORK, Nov. 21 (UPI) -- Although the American automotive industry continues to add jobs, those jobs are not necessarily high paying, as manufacturing wages across the U.S. are in decline.

According to a new study by the National Employment Law Center, manufacturing jobs widely perceived as high paying are now not even enough to give a foothold in the middle class.

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"Thanks to global market forces and aggressive courting and subsidies by the federal government and states, some manufacturing jobs are rebounding, but the quality of too many of the returning jobs is low and fails to live up to workers' and the overall public's expectations," the study says.

"The median wage for all manufacturing workers in the United States is $15.66 per hour. In real terms, however, since 2003, the inflation-adjusted median hourly wage for manufacturing workers has declined by nearly $1.00 an hour, from $16.38 to $15.66 (in 2013 dollars). That amounts to a drop of over 4 percent. For a manufacturing worker who works 40 hours a week, 52 weeks per year, that translates to a drop in income of about $2,000 a year."

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The average American private sector job pays $20.13 per hour, nearly a dollar higher than the $19.29 earned by the average private sector manufacturing job. Historically, manufacturing jobs have paid significantly greater wages than the average private sector job.

The study credits the recent growth in automotive and other manufacturing jobs to "onshoring," where companies move out-of-country jobs to domestic factories and plants.

• General Electric moved its electric water heater production from Mexico to Louisville, Kentucky, and hired workers at $13 an hour. • Lenovo, the Beijing computer maker, opened a manufacturing plant in Whitsett, North Carolina in 2013, due to rising wages in China and the ability to offset rising logistics and transportation costs by relocating to the United States near a large customer base. • Ford, GM, and Caterpillar also moved some operations theback to the United States for similar reasons. • Ikea opened a furniture factory in Danville, Virginia in 2008. • Airbus is building a new factory in Mobile, Alabama.

However, because so many jobs created from "onshoring" are in areas with poor labor standards, employers are paying workers less to do more work.

"Chinese, Japanese, and U.S. manufacturers are establishing plants in the South in particular, where labor standards are weaker," the study notes.

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"We are not going to back to Detroit in the 1950s or Akron in the 1900s," Lawrence Katz, a professor of economics at Harvard, told the New York Times.

"There still are many manufacturing jobs that are high-paying, but they tend to be more senior or require a lot more education than entry-level jobs do. And their numbers are shrinking, too."

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