Labor

Posted by on . 8 comments.

There have been a lot of arguments about workers at the Big Three, and whether they’re at fault for the firms’ state, and just how much they earn, and so forth. Lost in all this is the point that if you want to help the workers, you really want to give them better companies to work for. The tragedy of the Rust Belt is that for so many the Big Three are the best employment option available. If I lived in a place where every institution was geared toward perpetuating that state of affairs, I’d have a hard time thinking of reasons to stay.

Comments

  1. monkeyrotica says:
    November 21, 2008 at 1:23 pm

    It sucks to live in an employment monoculture, but nobody’s forcing anyone to live in a city where the only employment opportunities are at the buggy whip factory and the opera hat company. Anyone in the past decade who’s considered a career in automobile manufacturing needs to have his/her head examined. It’s like choosing smalltown farmer as your career track. Who does that?

    The exception is DC. It’s a gummint town, but the gummint ain’t goin nowheres.

  2. JRoth says:
    November 21, 2008 at 4:01 pm

    you really want to give them better companies to work for.

    Like who? What the hell does this mean? Is Toyota a “better company to work for?” Lower pay, less personal job security. But hey, they make cars that yuppies like, so I guess that’s what’s important.

    Look, auto workers are not choosing to work for Ford because they’re from Detroit, but if they were from Cupertino, they’d be at Apple. These are, with some exceptions, individuals who are not in the running for a lot of other $60k/year jobs.

    Manufacturing jobs are being replaced with lower-paying service jobs; geography has fuck-all to do with it.

  3. ryan says:
    November 21, 2008 at 4:24 pm

    But hey, they make cars that yuppies like, so I guess that’s what’s important.

    I know you mean this as a dig, but yes, it kind of is important to make cars that people want to buy. Why? Because if you don’t, then you have to go hat in hand to the government begging for taxpayer money, or face bankruptcy. Let’s not get ourselves confused here. I haven’t avoided buying a car from GM because I daren’t be seen outside a VW. I’ve avoided buying a car from GM because I bothered to pick up a Consumer Reports before going car shopping, and because every time I’m forced to rent a car and wind up with something from GM, I’m utterly wowed by the fact that it’s inevitably a world class piece of shit.

    Geography has quite a bit to do with it, and so does the fact that in the Rust Belt, the only place to get $60k/year jobs without a professional degree is at companies that can’t seem to turn a profit when oil is above $30/gallon. The presence of the Big Three in the Rust Belt crowds out a great deal of investment in other activities. It influences investment in human capital in the region. And it absolutely dominates the politics, which prevents governments in the region from pursuing policies that might encourage the growth of alternative industries.

    The fact is, the dearth of good employment opportunities in the Rust Belt is anything but independent of the domination of the local economy by the Big Three.

  4. Doug says:
    November 21, 2008 at 4:27 pm

    Well, you might have trouble thinking of reasons to stay, but the reasons for a bailout would flow like wine.

  5. Christopher says:
    November 21, 2008 at 7:16 pm

    You stay because that’s where your family is. That’s where your connections are. Automobile factories are decent enough places to work. My uncles and cousins all worked at them during the summers when they were at college. My mother’s family is from Michigan, so that’s not that odd I suppose. Of course the automobile industry extends WAY beyond autos and that’s the concern. From ball bearings to carpet manufacturers to plastics and window glass and ad agencies — there are probably a million people dependent on the continued success of the automotive industry in the U.S. At least.

    VW just announced, after much work, a new plant in Chattanooga. My parents live near there. It’s been big news. Dominated the newspaper and TV for months now. They started hiring the other day — thousands came out for jobs there.

    I don’t begrudge anyone those jobs. And wanting to work there. Likelihood is — those are better jobs than they’ve ever had.

  6. Dan Staley says:
    November 21, 2008 at 7:47 pm

    Anyone in the past decade who’s considered a career in automobile manufacturing needs to have his/her head examined. It’s like choosing smalltown farmer as your career track. Who does that?

    I grew up in Detroit area. My brother and step-brother are dependent upon the Big 3. Only there can they have HS educations and have good-paying jobs. Trouble is, that’s the culture and edgeamacation is denigrated, so I had to leave.

    Nonetheless, ‘having your head examined’ comes from an obvious bias. Not everyone has or wants a college education, good or bad.

  7. JRoth says:
    November 24, 2008 at 2:05 pm

    it kind of is important to make cars that people want to buy

    This is what you – and the rest of you – don’t seem to understand. People do – or did until this recession started – want to buy Detroit’s cars. Detroit sold more cars in the US in 2007 than all of the “good” carmakers combined. I take your point about needing to adjust to a peak oil economy, but the actual number where Detroit starts to lose money is more like $50/barrel – O hai!.

    the fact that in the Rust Belt, the only place to get $60k/year jobs without a professional degree

    Wait, where outside the Rustblet are people without professional degrees earning $60k a year? I’m truly curious to learn about these jobs. The whole reason the foreign carmakers are located outside the Rustbelt is so they can avoid unions and paying their employees $60k/year. Sure, those jobs pay OK, and the best of them reach $60k, but if Toyota wanted to pay its employees $60k/year, they’d locate in the Rustbelt, where there was an existing infrastructure for their business.

    Meanwhile, what other industries, outside the Rustbelt, are paying that money? Steel minimills? Ha! Fabric mills? Double ha!

    Look, there are certainly non-manufacturing careers that pay middle class money to people with no more than a HS degree. They’re skilled jobs in construction, maintenance, and so on. And those jobs exist in Michigan just as much as they do in Georgia – X plumbers for every Y households. The presence of the auto industry doesn’t crowd those jobs out – it provides an alternative to WalMart greeter, which is where most of the 2 million ex-manufacturing workers end up in your economy.

    And it absolutely dominates the politics, which prevents governments in the region from pursuing policies that might encourage the growth of alternative industries.

    Sorry, this is simply not true. I mean, it’s a nice economics story, and it seems like it should be true, but here in Pittsburgh, where we gave up on the steel industry 20+ years ago, where steel has zero political clout, where CMU is the world’s best university for The Future (ie computers and robotics) and UPMC is a world class biomedical facility, where the quality of life is fantastic, we’re still losing people every year. We’ve done everything that people say should work, but it doesn’t matter.

    But hey, at least we don’t have tens of thousands of high-paying industrial jobs anymore. Whew! Wouldn’t that be a disaster for the region.

  8. ryan says:
    November 24, 2008 at 2:30 pm

    J, Detroit has lost market share steadily for decades. Yes, they still have a sizable share of the market. No, that is not an indicator of strength.

    Professional degree = law, accounting, medical — the jobs where you make bank anywhere. I don’t have a professional degree and I’m doing just fine. Same with most of my friends. True, it’s hard to make $60k/yr without a college degree, which is why the presence of those jobs in Detroit influences human capital investment in the region.

    Meanwhile, you say “They’re skilled jobs in construction, maintenance, and so on. And those jobs exist in Michigan just as much as they do in Georgia.” But those jobs are disappearing in Michigan; the state has been in constant recession since 2001. To support good jobs in these industries, the state needs a diverse, knowledge-based economy. And it’s not going to get it while the Big Three suck up physical and political capital.

    Steel has no political clout? You must be joking.

    And Pittsburgh is a classic case of the importance of economic geography. The city is economically isolated, and the closest centers of economic activity are all themselves troubled. If you dropped Pittsburgh on I-95, its problems would be over. The contrast with Baltimore is instructive.

    That’s why I’ve argued that the best solution for the Rust Belt is to leverage its knowledge assets by building better, faster connections between its metropolitan areas, and by investing heavily in education and research.

    America’s manufacturing future looks a lot like its manufacturing present. Low employment, high-technology, and capital-intensive. The economics just aren’t there to support whole regions with manufacturing employment. Even if the government saves Detroit, the firms will only survive long-term by reducing their employment, probably significantly. Like it or not, that’s the world we find ourselves in.