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A Backlash Brews Against Low Pay On The Factory Floor

Nissan workers at a plant in Canton, Miss. The auto company received financial incentives, including tax relief, from the state for the factory.
Rogelio V. Solis
Nissan workers at a plant in Canton, Miss. The auto company received financial incentives, including tax relief, from the state for the factory.

Forty years ago, a manufacturing job was often a ticket into the middle class. That's not the case today. Wages for manufacturing jobs are plummeting, and some states are questioning whether competing for those jobs is still worth it.

For Cynthia Hunter, a $9-per-hour manufacturing job offer meant she could stay in the workforce after taking a buyout from her management job at Exxon Mobil in 2012.

"I was scared to stay out of the marketplace," says Hunter, 58. "I mean, I have worked all these years, and I never in my life collected unemployment — ever."

Her low pay at Kace Logistics in Detroit was a shock, but at least she doesn't have children to feed and clothe, she says. "Everyone there at this plant — everyone — has like, a second job, something else that they do," Hunter says.

Here's the good news: In the U.S., 350,000 manufacturing jobs came back after the recession. Here's the bad: Many pay much less now. Real wages for auto supplier jobs have fallen 14 percent since 2003, even as the average for all jobs declined only about 1.5 percent, according to a study from the National Employment Law Center.

Catherine Ruckelshaus with the National Employment Law Project says $9 an hour is all too common for manufacturing jobs these days. "Some good jobs do remain, but too many of them resemble positions at Wal-Mart and McDonald's," she says. "The companies simply aren't feeling the pressure from anywhere to do right by their workers."

Ruckelshaus wonders why states still dangle huge incentives before manufacturers. Nissan, for example, got $1.3 billion in financial incentives from Mississippi for a new factory, according to a study from the nonprofit organization Good Jobs First — all for jobs that pay $12 an hour.

Of course, many people would say, better a low-paying job than no job at all, but some states are starting to demand a bigger bang for their buck. For instance, Michigan now puts cash on the table, but no tax breaks.

"We don't give them the money in advance, where it's all spent. We give it to them as they meet the commitments that they've made," says Mike Finney, head of the Michigan Economic Development Corp. And, Finney says, the state only chases jobs with above-average pay.

Still, there's nothing states can do about NAFTA and Mexico; Mexican auto workers earn between $2.50 and $5 an hour.

Sean McAlinden, an economist with the Center for Automotive Research, says Southern states tried to compete both with the Midwest and with Mexico. But for jobs that can still be shipped away, he says, forcing manufacturers to pay more would very likely accelerate the loss of jobs to Mexico.

"The Southerners, you could say, got the work based on cheaper wages than the old Upper Midwest," he says. "And now, if you live by the cheap wage, you die by it."

Some jobs can't be relocated, like Hunter's, inspecting and placing parts in sequence for the assembly plant next door.

Hunter got fed up with the low pay, she says, and decided to organize her plant this summer. Four weeks ago, workers at Kace signed their first union contract and got a $2-an-hour raise.

Meanwhile, there's another free trade agreement looming: the Trans-Pacific Partnership, a deal with Malaysia, Singapore, Vietnam, Japan and seven other countries.

But concerns that the agreement could put more downward pressure on U.S. wages is sparking opposition to the deal, especially from members of Congress who represent states with a heavy reliance on manufacturing jobs.

Copyright 2014 Michigan Radio

Corrected: December 23, 2014 at 11:00 PM CST
In the audio of this story, we incorrectly say that Nissan received $1.3 billion, plus a 25-year tax break, from the state of Mississippi to build a factory. In fact, the $1.3 billion figure includes the value of the tax break.
Tracy Samilton covers the auto beat for Michigan Radio. She has worked for the station for 12 years, and started out as an intern before becoming a part-time and, later, a full-time reporter. Tracy's reports on the auto industry can frequently be heard on Morning Edition and All Things Considered, as well as on Michigan Radio. She considers her coverage of the landmark lawsuit against the University of Michigan for its use of affirmative action a highlight of her reporting career.
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