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Thursday, Jan. 5, 2017 12:18 am

Manufacturing crisis

The right’s industrial policy is not about jobs

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Let’s talk about manufacturing in Illinois – everybody else is. Our new honorary president and our not-so-new governor have promised to bring back good manufacturing jobs, jobs just like the old days. Only they won’t, because they can’t. The industrial economy of the 1950s and ’60s is (to borrow a term not presently fashionable on the right) never was sustainable. A company can no longer pay a high school grad $50,000 a year to add $45,000 a year to the value of air conditioners and washing machines. The owners know that but don’t say so. Politicians know it but pretend not to. Not all workers have figured it out.

First the facts. Immigrants did not take those kinds of jobs from Illinoisans, as Trump insists; immigrants don’t compete with native factory workers for good jobs but with other immigrants for what most natives dismiss as crap jobs. (Except for high-skill medicos and tech whizzes, whose work actually creates other jobs.) Nor is China stealing jobs by use of currency manipulations or trade deals. They are earning them by offering the owners cheap labor. A Chinese worker putting in an 8-hours-a-day, 6-day week in a cut and sew factory makes less than $500 a month, and that’s considered good pay.

Government rules and taxes did not take those jobs either. Greg Baise of the Illinois Manufacturing Association has asserted that “misguided government policies are helping destroy the industrial sector in Illinois.” Indeed they are. Subsidizing corporations while starving universities, for example, is not the way to attract jobs in an advanced high-tech manufacturing economy. As for workers’ comp and suchlike, all that such programs destroy is the freedom of senior managers to make their Wall Street targets (and their bonuses) by cutting workers’ benefits.

If out-of-work Illinoisans want villains, they should look instead toward the C-suite. In September, The Atlantic’s Chad Broughton told the story of a factory in Hanover in Jo Daviess County that for nearly a half-century has made most of the world’s solenoid valves for appliances. (See “Just Another Factory Closing” http://www.theatlantic.com.) It had long been the biggest employer in town, and it had offered its skilled (and non-union) workers stable work at good wages for two generations. In 2014, the French multinational that owned the factory sold the Hanover works to a vulture capital firm. Unconfirmed reports suggest that the operation has always made very good money, clearing around 18 percent a year. Having a lot is never enough these days for the money monkeys, and the new owners soon decided that if they moved it to Mexico they could make even more.

As a company press release put it, the move will “optimize its manufacturing footprint, leverage its investments, and enhance its competitiveness.” Which in English means, “You lose, we win.” As so often, Rauner’s jobs creators turned out to be jobs relocators. Rauner, recall, made his money doing to other companies what was done to this one. His policies as governor aren’t much different.

Yes, a factory job was a good way for the low-skilled to make it to the middle class, but today you have to be middle class to get a factory job. Illinois firms are making more stuff with fewer workers than ever, thanks mainly to robotics and other advanced techniques. Few of today’s middle-aged factory workers are able to do such work. Blue-collar work isn’t blue any more. Strip away the fig leaves pasted onto the IMA’s “Middle Class Manufacturing Agenda” and what you see are proposals to lower workers’ comp rates, restore tax credits to industry and shift the tax burden away from commercial and industrial taxpayers to the rest of us.

It’s interesting that Rauner and Trump are making the revival of the old industrial economy the standard by which they want people to judge their leadership. Here in Illinois, for example, manufacturing is important but not central to the state’s economic well-being. Some 567,000 Illinoisans are employed in the manufacturing sector as defined by the feds. That’s a lot of people. But Illinois’ workforce is 6,565,000 people, of which manufacturing accounts for only about 8 percent. Nor is protecting the manufacturing sector the central economic problem. Yes, a manufacturing boom will attract new people to Illinois, but so will lots of other kinds of jobs.

Ah, but manufacturing has long defined what kind of place Illinois is. Making stuff is especially important to how its working class – many of them lapsed Democrats – sees itself, which is why Republicans are eager to recruit followers among them. Illinois’ displaced factory workers are being exploited twice – once by their owners and again by politicians who mobilize the public’s natural sympathy for displaced workers in support of what amounts to an anti-working class agenda. Workers in the good ol’ days at least knew who their enemy was.

Contact James Krohe Jr. at CaptBogue@outlook.com.

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