Monday, November 12, 2012

Paying for Modern Industrial Labor

Kevin Drum:

Companies like this all like to say that American manufacturing is too competitive with anyone in the world. But look. If you can't afford to train workers, and you can't afford to pay the wages it takes to attract good workers, then by definition that means you aren't competitive. You're only competitive if a recession has made people desperate and the government helps you out with training. And who knows? Maybe that's a good use of taxpayer money. Wall Street certainly benefits from the training provided by state universities. But it's still a subsidy no matter how you slice it. Without it, apparently, American manufacturing just isn't very competitive.

Part of the reason US unions eventually made progress in steel and other heavy manufacturing is that labor costs were a relatively small percentage of the companies costs. You can give out raises and benefits (and in the medium term especially retirement benfits!) without cutting into the bottom line too much.

You'd think that in high tech manufacturing, since you'd have fewer, higher skilled workers and a lot of investment in equipment, you'd also be able to pay the remaining workers more, but apparently not. Or maybe management would just prefer not to.

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