What is in this article?:
- How the Decline of Unions and Collective Bargaining Hurts Manufacturing and Our Economy
- A Brief History of Unions
- But is American Support for Unions Recovering?
- The Results of Weakening Unions
- Of Unions, Manufacturing, the Middle Class and the Economy
Will the decline of collective bargaining and "low-cost-labor first" strategies cripple manufacturers' efforts to hire skilled workers, or worse, our consumer-based economy?
In the last 20 years, corporate efforts to lower labor costs have been extremely successful, resulting in record profits and executive bonuses. Big corporations have outsourced jobs to low-labor-cost countries, created two-tier pay systems, and implemented automation and other labor cost reduction strategies. Among the most successful is their effort to weaken or eliminate unions.
But I wonder if their success may come back to haunt them -- and the country -- in the future.
For example, IBM Corp. (IW500/11) conducts a survey of 1,500 CEOs around the world each year, and in 2010 concluded that “more than rigor, management, discipline, integrity, or vision -– successfully navigating an increasingly complex world will require creativity.” But the question is, how will corporations recruit and motivate these creative people -- and retain them -- unless they are willing to give them bargaining power and change the current business paradigm of "cost reduction first."
These same corporations are also faced with the fact that they need highly skilled workers to operate their very automated plants. According to many research reports, manufacturing needs 600,000 highly skilled people today, and this number will continue to grow as the baby boomers retire. Why should highly skilled people pursue a career in manufacturing when they view it as a declining industry whose companies do not hesitate to reduce wages, outsource jobs and close plants?
In my April article, Why America Has a Shortage of Skilled Workers, I shared some information from an earlier report from the National Employment Law Project, Manufacturing Low Pay: Declining Wages in the Jobs That Built the Middle Class. If you doubt that manufacturing wages are falling, here's a chart from the report:
These same corporations support STEM (science, technology, engineering and mathematics) education initiatives and are very critical of our current educational systems. Why should a young person invest in a STEM education in an industry that has lost six million workers and 82,000 factories since 2000? New workers want to work in an industry where there is job security, wages based on skills attained, good benefits, and the job is presented as a long-term career.
... manufacturing executives are not in good position to recruit the people they need based on what has happened in manufacturing in the last several decades."
While 84% of respondents rank job security and stability as very important or important job selection criteria, 75% strongly agree or agree with the statement, "manufacturing jobs are the first to be moved to other countries" and 41% strongly agree or agree with the statement, "U.S. manufacturing jobs are stable and provide job security relative to other industries."
Meanwhile, another survey question found that 66% of respondents strongly agree or agree that worries about job security and stability are reasons for not encouraging a child to pursue a career in manufacturing. (Job security and stability tied for third with ability to build job skills in job selection criteria; good benefits was first at 87%; rewarding work was second, at 85%.)
These corporations already are in a position where they must compete for the well educated people, and then motivate them to stay with the company. But manufacturing executives are not in good position to recruit the people they need based on what has happened in manufacturing in the last several decades.
As for the country, the U.S. is a consumer economy, driven by consumer spending. If workers do not have money to spend, the outlook is not good for U.S. economic growth.