Managers, Not Workers, Overpaid in Manufacturing Jobs

[Omaha Steve]

http://blog.aflcio.org/2009/02/17/managers-not-workers-overpaid-in-manufacturing-jobs/

by James Parks, Feb 17, 2009

Some pundits and lawmakers—Sen. Bob Corker (R-Tenn.) comes to mind—falsely claim that union workers are overpaid and are to blame for the decline of U.S. manufacturing. But a new report, released last week by the Economic Policy Institute (EPI), busts that myth and shows the convenient conventional wisdom to be wrong.



EPI economist Josh Bivens lays out the facts in Squandering the Blue-Collar Advantage, which show that U.S. manufacturing’s blue-collar workforce, far from destroying U.S. competitiveness, is actually one of the key elements making a positive contribution to competitiveness—a contribution being undermined by a variety of other factors. Click here to read the entire report.

Says Bivens:

If the story of U.S. manufacturing began and ended with its blue-collar workers, the outcome would be far different from what we’re seeing today. In hourly pay and productivity, U.S. manufacturing workers give their companies a significant competitive edge—one that is being drained away by other negative forces.

Bivens identifies three key factors undermining U.S. competitiveness:

* The overvalued U.S. dollar, which artificially drives up the price of U.S. goods abroad and drives down the cost of foreign-produced goods here. Over the past 10 years, this imbalance alone has created a 10 percent to 16 percent cost disadvantage for U.S. goods, compared with the previous decade.
* The high cost of U.S. health care is another significant factor. Reducing these costs to the same level as our comparable trading partners could create a 4.6 percent cost advantage.
* U.S. managers—not workers—are overpaid. Bringing white-collar wages in line with those in comparable countries could result in a 6.4 percent cost advantage for U.S. manufacturers.

Bivens adds:

If we want to restore the strength of U.S. manufacturing in our economy and in the world, we have to address the real anti-competitive factors that are dragging it down. In this effort, the wages and productivity of the unionized blue-collar workforce are an important asset.

[Earth Bound Misfit]

1. Great Post, recommend reading the entire EPI Report

Link (pdf file): http://epi.3cdn.net/170ac22fe87bb82346_idm6ivvgk.pdf

EPI Website Home Page: http://www.epi.org/