In World Economy News 12/12/2016
When President-elect Donald Trump returns to this factory town on Friday for a victory celebration, he will find a region that is already experiencing the manufacturing renaissance he promised on the campaign trail.
With local factories employing more workers than any time since the late 1990s, assembly line jobs are not hard to find. Those that pay a decent wage, however, are harder to come by.
“We can barely make ends meet and we’re stuck going nowhere,” said auto parts worker Michael Baum, 22, as he smoked a cigarette in the parking lot of a Family Dollar discount store.
Trump won the White House thanks to strong support from workers in Midwestern cities like Grand Rapids who have seen their living standards erode as the United States shed manufacturing jobs. He beat Democratic rival Hillary Clinton by a margin of 14 percent in the four counties that make up the Grand Rapids metropolitan area, helping him carry Michigan by a margin of 0.27 percent.
Trump has promised to punish companies that shift work overseas, pressuring manufacturers like United Technologies Corp. to reverse their outsourcing plans.
“Our jobs are being stolen like candy from a baby,” Trump said at a rally here the night before the Nov. 8 election.
Grand Rapids, a hub of furniture makers and auto parts suppliers, has not been immune to outsourcing. At least 488 people have lost their jobs over the past year as two manufacturers, Dematic Corp and Leon Automotive Interiors, have shifted work to other countries, U.S. Labor Department filings show.
But new hiring has more than made up for those losses. The number of factory jobs in the region has grown by 40 percent since the depths of the recession in 2009, according to the U.S. Bureau of Labor Statistics, and unemployment stands at 2.9 percent, well below the national average of 4.6 percent.
Local businesses now say their top concern is finding qualified workers, according to Rick Baker, president of the Grand Rapids Area Chamber of Commerce.
Even as jobs have returned to Grand Rapids, earnings remain low. At $846 per week, average weekly wages in the region rank 46th among the 50 largest U.S. metropolitan areas, BLS data show.
The Heart of West Michigan United Way, a local charity, said demand for its services has remained steady over the past several years even as the economy has picked up.
While manufacturing helped lift millions of unskilled workers into the U.S. middle class in the 20th Century, that is no longer the case, said Lou Glazier, president of Michigan Future, a think tank that focuses on the state’s economy.
Factories still pay good wages to workers who have specialized skills, such as welding or computer programing, but routine work no longer pays enough to cover living expenses, he said.
Grand Rapids is “participating in the old economy and doing well in it, in terms of jobs. It’s just that the economy is no longer producing high wages,” Glazier said.
MORE WITH LESS
While Trump and others blame global competition for the decline in factory work, automation has played a large role as well, economists say. The U.S. manufacturing sector has more than doubled output over the past 35 years even as it had shed one-third of its work force, according to the nonpartisan Brookings Institution.
“We’re doing more today with the same amount of people that we had eight years ago,” said Bob Roth, chief executive officer of RoMan Manufacturing, which make glass and electrical components.
At RoMan, assembly line workers start at $13 per hour but skilled workers can earn up to $30 an hour, Roth said. The company pays community college tuition for those who wish to upgrade their skills, but those who fail to improve their productivity enough to justify a higher wage within two years are fired, he said.
Such prospects come as little consolation to workers like Baum, who are trying to figure out a way to boost their earnings on their own. For now, they are pinning their hopes on Trump.
“If he can bring good paying jobs back to America,” he said, “I’ll vote for him again.”
Source: Reuters (Reporting by Nick Carey in Grand Rapids and Andy Sullivan in Washington; Editing by Tom Brown)
