The Decline of Manufacturing and the Jobless Recovery

Labor journalist Dan Labotz has a detailed post on MRZine about the collapse of the manufacturing sector of the U.S. economy and its implications for the working class.

Labotz notes that there has been a long-term reduction in employment in manufacturing:

In 1960 out of a total non-farm workforce of 54,274,000, there were 15,687,000 manufacturing workers representing 29 percent of the total.  By 2009 out of a total of 134,333,000 non-farm workers, there were only 12,640,000 manufacturing, representing just 9 percent of the total.  That is, industrial workers fell in the last fifty years from almost one-third of all workers to less than 10 percent.

This reduction in the size of the industrial working class has been driven by the competitive weakness of U.S. automakers and the machine tool industry.  Since the decline of the U.S. automakers is well known, Labotz focuses on the machine tool industry:

Even more disturbing perhaps than the decline of the auto industry is the decline of the machine tool industry, an industry that stands at the heart of any industrial economy.  The machine tool industry is made up of the machines that make machines.  Every other industry depends on machine tools in order to conduct its manufacturing operations.  There are about 7,000 such companies — Hardinge, Kennametal, Thermadyne, and Ingersoll are among the largest — with combined annual revenue of $25 billion.  Machine tool companies produce dies, molds, cutting tools, and machining centers, some of this high-tech automated equipment, created in complexes that contain specialized foundries and machine shops.  Working for these companies are engineers and high-skilled workers whose know-how represents an invaluable human capital.

Since the early 1980s, the machine tool industry has been on the decline, a descent which has become precipitous.  During the 1980s and 1990s the U.S. machine tools lost out in world competition not only to Japan and Germany.

Labotz goes on to present a host of data demonstrating the loss of international competitveness of the U.S. machine tool industry relative to Europe and Japan and the consequent decline in output and loss of jobs.

The ongoing crisis in U.S. manufacturing competitiveness is likely to exacerbate the current economic downturn and lead to a jobless recovery.

But, as Louis Uchitelle observed recently in a perceptive article in the New York Times, in the past economic recuperation was driven by manufacturing, at the center of which stood the auto industry.  The auto industry — which includes both the Big Three and foreign-owned assembly companies employing 309,000 autoworkers, as well as the 4,000 auto parts companies employing 450,000 parts workers — had been key to economic recovery in past recessions.  With the closing of many auto assembly and parts plants, the car companies are not leading that recovery, and no other industry is playing its historic role.  

The consequences of the decline of U.S. manufacturing, both in auto and machine tools, for the labor movemnet are stark. 

The decline of manufacturing generally and of the machine tool industry in particular suggests a weakening of the American industrial working class.  This is not simply a question of numbers, but also of the character of the work and kind of social organizations to which it gave rise.  Factory workers, because employers brought them together in large numbers and put them in charge of machines that produced commodities for the market, discovered that they had the power — through slowdowns and strikes — to affect production and therefore profits.  When industrial workers struck and organized, they also became a political power, even if the unions’ conservative officials failed to turn that into an independent force.

The machine tool industry in particular assembled around itself the engineers, machinists, electricians, and other highly skilled workers who often stood at the center of their communities and of the labor unions in their plants.  While often seen as the elite of the industrial world, it was tool-and-die makers and other such skilled workers who often formed the core of early organizing efforts.  German and British immigrants among them brought trade-union and socialist traditions to the machine tool industry and the auto plants of the United States.


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