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Manufactured truth at Manufacturing Day

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The second annual Manufacturing Day took place in Evanston last week, and though I attended last year, I skipped it this time around.

A worker adds an ingredient to a fresh batch of a lubricant mixture at IRMCO in Evanston during a Manufacturing Day tour in 2012.

The second annual Manufacturing Day took place in Evanston last week, and though I attended last year, I skipped it this time around.

Manufacturing Day, I’d discovered, isn’t long on nuts-and-bolts realities or objective facts. Rather, it promotes a specific corporate agenda, with information trimmed to suit.

Since the principal sponsors for this national event are the Alliance for American Manufacturing and Shell Oil, there’s no surprise there. It is dismaying, though, that our local officials have bought into this public relations campaign so uncritically.

State Sen. Daniel Biss, insisting that there are “extraordinary numbers” of high-quality manufacturing jobs going unfilled, echoed one of the event’s principal themes.

Although this refrain is voiced frequently by CEOs, economists have found no evidence that skilled labor is in short supply (recent academic studies from Illinois, Wisconsin, and Pennsylvania debunk the “skills gap,” as does similar analysis from Business Week.)

But all it takes is common sense, and the actual facts, to recognize this shortage is a myth. “It’s hard not to break out laughing” in response to manufacturers’ complaints, one economist said recently. “If there’s a skill shortage, there has to be rises in wages. It’s basic economics.” But wage rates for skilled workers across the country have continued to decline.

Check Monster.com: An employment search for welders (where shortages are often said to exist) in the Chicago area yields only eight results, all requiring experienced applicants. Advertised pay rates range from $13 to $18 an hour, less than you could get from a job at Costco.

In fact, welders in Illinois earned on average $18 an hour in 2012, only slightly above the average wage of $16 for unskilled factory work. “Trying to hire high-skilled workers at rock-bottom rates,” one consultant noted, “is not a skills gap.” Pay rates for welders and machinists in Illinois have dropped throughout the last decade, as have the hours they’ve worked — neither would be true if such workers were in short supply.

For despite claims from local officials about “this rapidly-growing career field”, factories are no longer a reliable source for well-paying jobs – or increasingly, for jobs of any kind.

Any talk of a manufacturing rebound speaks only to output; industrial job losses in the United States are projected to continue as companies utilize technology to produce (and profit) more with far fewer workers.

In the 21st century America has experienced an unprecedented collapse of its industrial base, dragging Illinois down with it.

Cook County lost more than one-quarter of its manufacturing jobs in the past decade; a slight employment uptick recently hasn’t put much of a dent in that.

In Evanston the decline has been even more dramatic, as factory employment dropped nearly 40 percent in less than ten years.

No turnaround is on the horizon. In Illinois, manufacturing is forecast to continue shedding jobs and by 2020 will fall to comprise less than 9 percent of the state’s total workforce. Those occupational fields in Illinois that are actually growing mirror those across the country — the service sector, health care and education.

So why do manufacturers keep harping on a “skills gap,” and why are our legislators perpetuating this canard?

Job training provides an easy answer to our nation’s most intractable problem — there are many more unemployed Americans, across every job category, than there are jobs to put them in.

Such a labor surplus restricts workers’ bargaining power, and while productivity and profits continue to climb, wages and benefits are falling to historic lows as a result. Employers benefit from an oversupply of skilled (and unskilled) workers – especially if they don’t have to bear the costs of training them.

On-the-job training, once commonplace in factories, is increasingly rare; instead, employers are offloading the costs of such training onto taxpayers (through the public schools, or publicly-financed training programs) or to workers themselves (by requiring them to finance their own vocational education).

The nostalgic mystique of manufacturing, along with the prevalent, but obsolete, belief that factories remain a steady source of well-paying blue-collar jobs, serves manufacturers as they seek public subsidies.

Illinois spends over $1.5 billion annually in business incentives, a goodly portion of which is aimed at placating manufacturers who threaten to move elsewhere. Factory jobs continue evaporating nonetheless, and income inequality widens.

The “skills gap” drumbeat allows corporate executives to divert attention from the profits they are racking up precisely because they are slashing wages and/or eliminating jobs altogether.

Doug Oberhelman, chairman of the National Association of Manufacturers and CEO of Illinois-based Caterpillar— the recipient of more than $196 million in taxpayer aid since 2007 – regularly bemoans the “skills gap” and maintains that reducing unemployment requires an overhaul of America’s education system.

He makes this argument (and takes those subsidies) even as Caterpillar continues firing workers (skilled and unskilled) and squeezes those remaining for more concessions. This strategy pays off, but just for a few: Caterpillar now makes $45,000 per employee (up from $12,000 in 2007) allowing the company to chalk up record profits and provide lavish executive compensation (Oberhelman’s is $22 million annually).

Okay, maybe our legislators are promoting a misleading argument – what difference does that make for Evanston? And what can we do on a local level to create more good job opportunities here? Some suggestions tomorrow.

Toni Gilpin holds a Ph.D in American History from Yale University and maintains an abiding interest in labor and economic issues. She's a graduate of ETHS and has lived in Evanston with her husband, Gary Isaac, and two daughters since 1996. She currently teaches American History for the Odyssey Project at the Howard Area Community Center, and is the former Executive Director of the Democratic Party of Evanston.

 

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