The Low-Wage New Industrial Jobs

When wages and working conditions in the United States get bad enough, a few industrial jobs begin returning to the U.S. But most of those jobs are hard and bad, with low wages and poor working conditions. Companies use the same strategies of employment obfuscation and opacity to protect themselves from having to treat employees with respect that they use in the global race to the bottom while the future of the American working class remains dire. Alana Semuels has a good piece about so-called “onshoring” in Tennessee and how the return of a minimal number of manufacturing jobs creates no good times for the American working class. A couple of quotes, with commentary:

One man, who works for parts supplier Magnetti Marelli, which opened its first lighting-production plant in Tennessee in 2013, told me that employees are required to work 12 hours a day, seven days a week. For this, they earn $12 an hour. The man, who didn’t want his name used for fear of retribution from the company, said the job has scarred his hands because he has to work quickly with wire harnesses, but that he can’t quit because he has a family to support.

“The labor laws in the United States ought to stand up and say you can’t do this to a human being,” he told me.

A spokesman for Magnetti Marelli, which is owned by Fiat Chrysler Automobiles, said that the schedule is related to a ramp-up phase ahead of new-product launches.

Magnetti Marelli, like most manufacturing plants in the South, is not unionized. And those who work at such plants likely won’t see the sort of mobility that Conklin has experienced. The compensation for these jobs is not on step with today’s economy: Wages for workers at non-union automotive plants have fallen 14 percent from 2003 to 2013, when adjusted for inflation, according to the National Employment Law Project.

The company has no reason to even deny that it’s crushing workers’ lives in an 84-hour a week job in conditions reminiscent of the Gilded Age. The idea that such a schedule is necessary is of course ridiculous because, you know, the company could hire more workers. But like U.S. Steel in 1905, forcing workers to labor 12-hours days is part of the management prerogative that employers love and they make workers suffer because of it. This is why unions are needed, but with the extreme capital mobility of the early 21st century, Magnetti Marelli may well move their factory to another non-union state or back over the border if the employees unionized. With jobs so scarce and mobility to enhanced, it’s hard to blame them for grasping to such a horrible job. Because what is the alternative?

Darius Mir grew his business 9to5 Seating, which makes office chairs, by moving manufacturing from California to China in the early 2000s. But manufacturing in China became increasingly challenging. The global slowdown shuttered dozens of plants in China, and some skilled workers went home to their villages, Mir told me, so that the company had trouble finding good employees. What’s more, as China devalued its currency, 9to5 Seating had to spend more on wages because of the unfavorable exchange rate, making it less cost-efficient to produce goods in China.

Looking for solutions, Mir did some research and realized that if he could locate a plant somewhere in the central U.S., where he could ship goods to customers in a day, and if he could automate some jobs to save labor costs, producing chairs in the U.S. could work. Thanks in part to automation, he found, a task or order that would take 22 people in China can be done at the Tennessee plant with five. With the help of generous incentives, the company started manufacturing on 100,0000 square feet in Union City, Tennessee, where Goodyear had closed a massive plant in 2011. Mir is now adding 200,000 square feet of space to ramp up manufacturing in the company. (The U.S. part of the company is called Made In America Seating). He employs 40 people, and hopes to grow to 80 by the end of the year, and 500 within five years.

The average wage, Mir told me, will be $38,000 a year, and unskilled employees will start working at $11 an hour.

“A person would be able to without much experience or skills, would be able to start work in the region where we are from $9 to $11 or $12 an hour,” he told me. “We are keeping to the middle of that range.”

$11 an hour is not really a livable wage, even in a relatively poor part of the nation, especially if you have a family. It is however the market wage. If it was a livable wage, would Mir locate his factory in Union City? Given that he has the ability, thanks to unhindered capital mobility, to move anywhere at any time, probably not. But while an $11 hour is better than abject poverty, it certainly doesn’t create a stable working class, nor is it intended to do so. A stable working class might well have the ability to raise those wages and send the jobs somewhere else, thus destabilizing said economically and socially stable workers.

Nissan has made cars in Smyrna since 1983, and the town, and even the county, grew up and prospered around the plant, adding nearly 200,000 residents since the plant opened. But Smyrna suffered during the recession when Nissan, facing huge financial losses, offered buyouts to 6,000 employees in Tennessee and eliminated a night shift. The unemployment rate in Rutherford County reached 11 percent, and did not fall below 7 percent until late 2011.

When Nissan ramped up again after the recession, they hired low-paid temporary workers through agencies such as Yates Services.

Robert Bruhn, 49, was hired by Yates to work at the Smyrna plant three years ago. It was a good job, compared to what he was doing at the time, working for an oven manufacturer for $13 an hour. Yates started him out at $14.50 an hour, although he stood on the line next to people who made $25 or $26 an hour. Other less-skilled Yates employees start out at $12.80 or so, and Yates workers never earn more than $18.50 an hour, he told me. After pushback from workers, Nissan has allowed some workers to transfer to Nissan as part of the Pathway program, though Bruhn told me that the selection of transfers seems random. (He applied a few times before he was finally accepted and transferred in September.)

Still, Bruhn gets less of a bonus and a lower wage than other full-time Nissan employees.

“There’s no way to reach the top here,” he told me. Josh Clifton, a Nissan spokesman, responded that the use of staffing agencies is “standard practice” in the automotive industry, and that Nissan employees in Smyrna receive competitive pay and benefits).

While Nissan will not disclose how many of its workers are temporary, Ed Ensley, a worker who has been at the plant for 30 years, says he thinks only about 30 percent of current full-time workers are Nissan employees. Ensley is a full-time Nissan worker, but he wants to form a union at the plant because he’s disappointed in how morale and quality have suffered since the increase in temporary workers. This is something he’s made clear at the plant, by giving speeches in the lunchroom and by approaching executives from Japan about the need for a union.

So far, he hasn’t made much progress, even as he’s seen the town of Smyrna deteriorate. Some new hires are making less than what he made in 1982, Ensley told me. Along the main drag of Smyrna, there’s been an uptick in payday-loan stores, and Nissan recently instituted a cell-phone lot for people picking up family members from work; Ensley suspects the change is because so many employees can no longer afford to be two-car families.

Meanwhile, the Smyrna plant is becoming the most productive in the nation, and last year produced 648,000 cars. Nissan made $1.57 billion in the first quarter of this year, a 58 percent increase from the previous year.

This use of long-term temporary workers is a big part of Japanese auto makers employment strategies in the South. The Toyota plant in Kentucky does the same. This causes all sorts of problems for workers who are doing the exact same job as the person next to them who works directly for Nissan or Toyota but who makes 50-60 percent of the wages and benefits (if there are any). This is the type of employment obfuscation that brings multiple employers into the same factory, makes unionization all the more difficult, and shields the parent company from financial and sometimes legal responsibility for those workers. Once again, the temporary work industry, which may have reason to exist when Macy’s needs to increase its staff for December alone, has been massively twisted into a Frankenstein that major and highly profitable employers use to increase profits on the backs of workers. Like so many of these labor arrangements such as franchising, subcontracting, outsourcing, etc., long-term temp work needs to be heavily regulated or banned outright if we want American workers to become middle-class people.

In short, American workers need good, well-paying, stable jobs. Even when work has returned, they don’t have that. No increased Earned Income Tax Credit is going to solve this problem. We have to have a jobs program that provides livable wages and dignified lives if we want a stable nation not wholly owned by corporations and if we want to fight poverty and social problems. Unfortunately, even many on the nominal left don’t take this seriously enough, preferring vague and meaningless paeans to education and useful but small policies like an expanded EITC credit as solutions to these problems. It’s not nearly enough.

For workers, the jobs are welcome because they are better than the poverty For Tennessee workers, the jobs are welcome because they are better than the poverty that gets Paul Theroux decried as a moral monster for writing about them instead of African workers. But it doesn’t mean these jobs that once could help a worker into the middle class are nearly enough to provide the stability we need to build American society.