Manufacturers Make Record Profits While Wages Fall
Since the Obama Administration passed the stimulus bill in 2009, the manufacturing sector has seen a huge revival and, according to the Commerce Department, earned a record $289 billion in 2012 – more than three times what the industry reaped in 2009. Unfortunately, while the news is great for shareholders, the soaring profits come at the expense of workers who no longer earn what factory workers traditionally earned in the past.
The stimulus pushed corporations to set up new factories in the US rather than outsource them to foreign countries. Just as with outsourcing, however, the companies looked for the cheapest labor possible in the US. While a state like New Jersey, where the average factory worker makes $76,000 per year, lost 17,000 jobs, Tennessee, where the average factory worker salary is $54,000 (10 percent less than the national average) added 18,000 new factory jobs. The south gained far more new factory jobs than northern states.
Wages aren’t the only reason manufacturers moved to the south, companies also found states where workers are the least unionized. While the most unionized state is New York where 25 percent of residents are in a union, the states with the most factory job growth have been Texas where only 6.8 percent of workers are unionized and South Carolina where only 4.6 percent of workers are unionized.
While a Boeing employee at their plant in Washington state makes more than $27 per hour, a Boeing employee in the non-union plant in Charleston, South Carolina only makes an average of $17 per hour. While auto workers used to have a starting salary of $28 per hour, new hires only make $19 per hour, up from its original $14 per hour. While a GE employee in Fort Edward, NY, where the company just fired 175 employees, made an average of $29 per hour, workers at their growing Clearwater, Florida plant earn just $12 per hour.
In theory, manufacturing is back in a big way but only on the back of profiteering off of decreasing wages for its employees. While factory wages drop, inflation continues to weaken the purchasing power of the lower wages and factory workers are making less, when adjusted for inflation or otherwise, than they have in decades.