The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

United States
Who is Taking U.S. Manufacturing Jobs?

Apr 18, 2004

The AFL-CIO has issued a report called "Revitalizing American Manufacture," in response to the steep loss of jobs in the manufacturing sector. As the report shows, the high point for U.S. manufacturing jobs was hit in June 1979, a quarter of a century ago, when there were 19.5 million manufacturing jobs. Currently, there are slightly more than 14.5 million jobs. These job losses are accelerating with close to three million manufacturing jobs lost in just the last four years. Despite the fact that the economic recovery officially began in November 2001, the manufacturing sector has continued to shed jobs for 43 months straight (as of this writing).

The term "loss of manufacturing jobs" does not adequately describe what is really happening. There has really been a collapse of manufacturing jobs. And this collapse is a true crisis felt throughout the country in every family which has someone in this drastic situation, all the more so since manufacturing is not the only sector to shed jobs in such a fashion.

The AFL-CIO blames this collapse of manufacturing jobs on what it calls "an erosion" of the U.S. industrial base – due to what it calls the loss of competitiveness by U.S. industry. The AFL-CIO explains that more production is being outsourced and more imports are taking the place of what used to be manufactured in this country because wages and other costs are much lower in other countries.

The latest AFL-CIO report puts it this way: "The 1970s saw the emergence of international competitors that eroded American manufacturers' once dominant position in domestic and global markets, in sector after sector." Later on it reiterates this point: "The U.S. manufacturing base is eroding, as plants throughout the nation shutter their doors and manufacturers hollow out their capacity by outsourcing to off-shore, low-wage locations."

Nothing could be further from the truth.

U.S. Industry: a Casualty of "Global Competition?"

In the global economy, the U.S. remains the "dominant" manufacturer today. The U.S. produces at least one-quarter of the world's industrial output. No other country comes close. The U.S. produces 50% more than its closest competitor, Japan. The U.S. also manufactures 33% more than the combined production of the three biggest economic powers in Europe – Germany, France and Great Britain – taken together.

And not only is the U.S. still the dominant manufacturing power today, that domination is increasing! Between 1980 – that is, near the peak of U.S. manufacturing employment – and the year 2000, the U.S. increased its share of global production in most branches of industry. According to the United Nations Industrial Development Organization (UNIDO), the U.S. is today the leading producer in 13 out of 14 industries. Of course, international comparisons are tricky because of different definitions and adjustments in currency rates. But given the disproportionate size of U.S. manufacturing compared to its closest competitors, there is no mistaking the reality.

In some cases, the increase in the U.S.'s share of production is spectacular. In rubber and plastic products, for example, the U.S. increased its share from 18% of the world's total production in 1980 to 26% in 2000. In the processing of food products, the U.S. increased its share from 18% to 23%.

But what is most striking is what has happened in those branches of industry which are reported to have been practically killed off by foreign competition, including textiles, garment, steel and auto. The truth is that their share of world production is not shrinking. On the contrary, between 1980 and 2000, the U.S. share in textiles increased – yes, actually increased – from 16% to 19% of world production. In the year 2000, one-fifth of the world's textile production was produced in the U.S. The same can be said about garments. In the 1990s, this branch which includes wearing apparel, leather and footwear increased U.S. manufacturing from 18% to 21% of the total world production. As for the production of motor vehicles and basic metals, including steel and iron, the U.S. portion not only didn't decline, it went up a little. The U.S. continued to produce over a quarter of all transportation equipment in the world.

In other words, the U.S. continues to dominate global manufacturing, and in most sectors it has even increased this domination.

Domestic Production on the Rise

All the talk about plants closing and going overseas makes it seem that U.S. manufacturing is in a steep decline.

Not true.

Production inside this country is NOT decreasing. In fact, it has been steadily increasing. Between 1973 and 2003, the very years when the AFL-CIO says that production capacity has been "hollowed out," production inside the borders of the U.S. actually doubled. In the 1990s alone, all those supposedly non-existent factories in this country somehow increased their production by more than 40%.

Of course, we have just been through a recession, with production declining in 2001, but production started to recover in early 2002, a recovery that began to pick up a little steam late last year. During the first three months of 2004, industrial production rose at its fastest rate in four years. But not only did the number of manufacturing jobs not increase, the jobs continued to be eliminated.

The problem is not the "decline" of production, it's the cut-back in jobs.

What is in dire need of "revitalization," as the AFL-CIO calls it, is not manufacturing. Manufacturing seems to be running along quite nicely. No, what needs drastic revitalization is the number of jobs. If the number of manufacturing workers had increased as fast as production did over the last 30 years, there would be about 40 million workers in manufacturing today, instead of the 14.5 million currently employed.

What happened to the other 25.5 million workers who should be in those factories, but aren't? Did a bunch of neutron bombs go off across the country, wiping out most of the workforce?

Greater Productivity: Robbing the Workers

No, in their drive to increase their profits, the manufacturing companies simply forced fewer and fewer workers to produce more and more.

This is no secret. The AFL-CIO knows it. The Council's report even cites the government's statistics that show just how fast worker productivity has increased. Between the 1970s and 1980s, worker productivity increased at an annual rate of 2.8%. In the 1990s, productivity increased at a rate of 3.9% rate per year. If anything, this rate is increasing still faster in the current "job loss" recovery.

For the working class, these productivity increases are nothing but a maddening treadmill.

Sure, the capitalists say that they achieved these increases through more capital investment, with computers, robots and other forms of automation. But the reality is that private investment in manufacturing has remained relatively low throughout this period. Instead, the capitalists have preferred "to invest" in corporate mergers and takeovers, that is, buying and selling each other. At the same time, they did little to modernize their old and dilapidated, unsafe and unhealthy factories. As for the machinery and tooling, it is often used for decades past its useful life, as anyone who works in these plants can attest.

No, the main way the bosses increased productivity was by forcing workers to work harder and longer. Sometimes management slipped in the increased work load through stealth, like the variety of employee involvement programs and self-directed work groups in which managers "involve" the people who do the work to improve output. But the fear of layoffs and unemployment has been more efficient than any tricks in getting workers to sacrifice their time and health for the benefit of the company.

Management has imposed speed-up, forcing workers to work at a faster pace, eliminating jobs and forcing the workers who remain to pick up the slack.

At the same time, workers have been forced to work many more hours – and not just through increased overtime. Vacation days, holidays, personal days and break time have been reduced, if not eliminated. From 1979 to 2000, the number of hours worked in a year has increased from an average of 1703 to 1878 hours in the United States – which is about 33% more hours than workers in many European countries work, even though workers in those same European countries have a higher standard of living to go along with the extra time.

More often than not, workers felt they had no choice but to accept much longer hours since wages and benefits over the last quarter century have either stagnated or declined. The workers were caught in an unending downward spiral: as the capitalists pushed down wages and benefits, meeting no resistance, workers were forced to work more hours, which only encouraged the capitalists to reduce wages and especially benefits still more.

Taken all together, this has meant that the capitalists have been able to drastically increase their plunder and robbery of the working class.

For the working class this has been a complete disaster. On the one hand, a growing part of the work force is condemned to unemployment, little or no income, living on the fringes of society. On the other hand, the lives of those still on the job are devoured through overwork, exhaustion, chronic illness and injury – and the sense of insecurity and fear that comes with the understanding that the boss can and will eliminate their job and livelihood at any moment.

Productivity – the Promise for a Better Life

Productivity through a more rational organization of the work and the introduction of better, more efficient and safer machines does not have to be a scourge. In fact, increasing productivity not only can raise the standard of living of the whole society, it carries the possibility of freeing humanity from the most onerous work. At the end of the 19th century, when the average workdays often exceeded 12 hours, and the workweek was usually six days, the working class organized and mobilized for the long and difficult struggle to win the eight hour day and, a little later, the 40 hour work week. The workers' slogan was eight hours for work, eight hours for sleep, and eight hours for ourselves. At the same time that the struggle of the working class reduced the hours of work, it also increased the standard of living. And in the midst of this fight, the workers created and built powerful unions.

Today, productivity is incomparably higher than it was 100 years ago, which means that the workweek could easily be cut much more, while our standard of living could increase rapidly. There is no reason in the 21st century that workers should still be chained to the workplace. We could have much shorter workdays and workweeks, take longer vacations, have time for leisure, for family and friends, time to pursue various interests and hobbies – that is, time to develop our own individuality.

But for that to happen, the working class must fight to take control over the increasing amount of wealth their labor is creating. The capitalists should not be allowed to swallow up the benefits in increased profits. The workers made it all possible: they produced the surplus that paid for the investment and came up with the ideas and processes that make the work more efficient. The workers should take the benefit for themselves.

The Stance of the Unions

In its "Revitalizing" report, the AFL-CIO boasts that "America's manufacturing workers are the most productive in the world." Does the AFL-CIO use this fact to push for the workers to benefit from their own work, calling on the working class to fight to gain shorter work hours, greater compensation? Not at all. No, the AFL-CIO says this only to introduce the idea that U.S. companies are not able to compete in the "global marketplace." According to the AFL-CIO, American companies, "... operate under enormous competitive disadvantages resulting from several factors, such as unfair trade and tax policies, an overvalued dollar, inadequate investment incentives, health care costs not borne by overseas producers and foreign government subsidies."

In other words, the AFL-CIO is calling for the government to provide these companies with more subsidies, tax breaks and other forms of "investment incentives" than they already get – subsidies and reduced corporate taxes paid for by increases in the workers' taxes. On top of that, when the AFL-CIO calls on the workers to make "their own" companies more competitive, implicitly it is calling on the working class to work harder still to increase productivity.

What the AFL-CIO says implicitly in this report, the heads of the unions say explicitly, each for "their own" boss. This was recently spelled out by UAW Vice President Nate Gooden at a recent UAW-DaimlerChrysler National Training Center Annual Meeting and Joint Conference at Bally's in Las Vegas (which is obviously the perfect location for this kind of conference). Said Gooden, "We're in a global war. If we refocus, we can turn this company around and be No. 1 in this global economy... We're going to be the best, and that means each and every soul in this room has to buckle up and buckle down."

This means, as Gooden put it, "We had to downsize... Some people have suffered, but we took care of a majority of our brothers and sisters along with DaimlerChrysler."

Gooden's words, as crass as they are, are completely in keeping with the union apparatus's policies, which justify the workers' sacrificing for the good of "their" company. Even though some workers happen to be "sacrificed," as Gooden says, the company and union can still "take care of a majority" of the workers. It is this line of reasoning which has seen the Chrysler workforce decrease from 120,000 in 1979 to about 60,000 today.

Most union contracts on both the national and local levels provide for big job cuts. The latest UAW auto contracts contain provisions that are estimated to result in the elimination of 38,000 jobs, casualties to further productivity increases and all the joint union-company programs. Almost every single union contract in every industry contains similar provisions that overtly or implicitly allow companies to reduce the workforce.

On the local level, union apparatuses allow companies to take away workers' break times. In a recent UAW local union agreement with the DaimlerChrysler Truck Plant in Warren, Michigan, the UAW agreed to let the company reduce the break time from 46 to 24 minutes, while also cutting lunch time from 30 minutes to 20 minutes. Even if this is covered over by making the lunch break paid instead of unpaid time, the fact remains workers have less time to relax during the shift. And this allows the company to run the plant 24 hours around the clock.

Reducing break times is another way of increasing the time at work, which also results in cutting jobs. This agreement allows the company to maximize the use of one plant, giving it the flexibility so that it can close another truck plant in the future.

Outsourcing: Some Abroad – More at Home

All the evidence shows that the increasing intensity of work is what's taking all the jobs. Nonetheless, union leaders continue to insist that "outsourcing" overseas is taking jobs away from workers right here. So let's talk about "outsourcing." Yes, there is a lot of it going on. And most of it is going on right here inside this country. Increasingly, companies which pay somewhat higher wages are sending work to companies in the U.S. which pay much lower wages. Major manufacturers are also selling off or spinning off their parts makers and sub-assembly work into subsidiaries or independent companies whose wages and benefits are much lower. Inside the factories, jobs such as janitors, building maintenance and parts control are being contracted out to lower wage companies.

The lengths to which this outsourcing has been taken was shown in the recent UAW- DaimlerChrysler local contract for the new Jeep Assembly Plant in Toledo, Ohio. According to this agreement, the work in the Body Shop and Paint Shop which had been done by Chrysler workers will be outsourced to a company that will carry on the work right on the spot, paying lower wages than what Chrysler pays, having greater latitude in increasing work load.

Such domestic outsourcing usually leads directly to a loss of jobs. And it contributes to the constant cycle of layoffs and the playing off of one sector of the work force against the other – that is, exactly the kind of competition inside the working class that the unions are supposed to fight. It is this competition that lowers wages, thereby boosting the profits of the big companies. Yes, there's competition going on, but it's going on right here at home where the bosses push workers to compete with each other to drive down the wages.

By pointing their fingers overseas, using chauvinist and patriotic arguments, the union apparatuses only serve to demobilize the working class, to put up a barrier to the fight that needs to be made. Convincing the workers that their companies can't compete overseas is nothing but a way to convince the workers that they have to help their companies compete – that is, by accepting lower wages and a greater intensity of work.

Certainly some jobs have been shifted overseas. How many have been shifted is difficult to know because the government doesn't keep statistics on this. But private economists estimate that it is only a tiny fraction of the number of jobs that are lost every year in this country. Besides that, it should also be remembered that this is not just a one-way street. Foreign capitalists also build factories in the United States. In the auto industry, for example, Toyota, Honda, Nissan, Mitsubishi, Mazda, Mercedes, BMW all have opened up assembly lines, not to speak of entire industrial complexes in this country.

But no matter how many jobs in this country have been lost due to foreign trade or imports, they are few in comparison to the 25.5 million more jobs that would have existed here if the capitalists had not been cutting the work force over the last 25 years.

The fact remains that if the working class were fighting to take control of the increasing wealth it is creating, putting it to use for its own benefit, there would be jobs for everyone.

Jobs for Everyone

No, the problem is right here. And it's here the fight has to be carried out. The bosses and the companies are not struggling, impoverished, just trying to keep their heads above water, as the unions and the bosses present it. No, they are getting richer and richer. And the bulk of their riches are being created right here in the U.S.

The working class has at its disposal the means to take control over the increasing wealth that it is creating, putting it to use for its own benefit. Such a fight – against the capitalist class's outright robbery of the workers' labor – would provide jobs enough for everyone.