Home » Money » Labor Creates All Weath

Labor Creates All Weath

Labor Day is a celebration of American work. It sometimes seems like an anachronism, a holdover from a day long gone when people worked in factories and churned out widgets with mechanical precision.  That image often comes to people in dirty sepia tones like a faded old photograph of grandpa at his bench.  Yet those days were more than grime and hard work, they were times when the US was at the height of its power around the world.  No matter how you want to look at what we celebrate on Labor Day, scorn or longing, hard work went strong arm and arm with the power of this nation.

The accelerated decline of manufacturing in the last decade shows how our current unemployment problem has a lot to do with the simple fact that we stopped making stuff.  It’s not a big leap to see that our power and prestige has gone away with those jobs.

The last decade has been especially hard on manufacturing jobs.  As has been noted before, a full 6 million have been lost since the economic downturn in 2001, soon to be celebrated as the anniversary of 9/11 approaches.  This data from the St Louis Fed shows the loss clearly:

The counter argument during this period has always been that our economy was transforming.  The New Economy™ is about creating work from information, the processing and selling of data that replaced widgets from dirty old factories.  Let’s look at the same manufacturing jobs data, expressed as a percent increase each month, compared with the growth of jobs in the economy overall:

The losses in manufacturing are striking – there has not been a month where manufacturing jobs increased over the last decade until recently.  More importantly, the overall employment changes show that while other sectors of the economy are picking up some of the slack they are not coming anywhere near the levels necessary to call this a “transformation”.  Manufacturing jobs disappeared but there have not been enough other jobs to replace them.

In the last year growth in manufacturing started to outpace general job growth for the first time in a decade, however.  If there is a transformation in our economy, it’s back to where we once were – but it is only starting.

Manufacturing jobs are more than just the sweat of the workers.  They are usually jobs that allow people to start right after high school with low skills and work their way up the ladder.  New skills can be found with experience on the job, not time spent sitting in neatly ordered desks, yawning through seminars, or pouring over books.  Given that people learn in different ways, these jobs represent opportunities for people who aren’t predisposed to learn by traditional methods.  They are the ticket to the Middle Class™ that made this nation great.

The net loss in manufacturing jobs, about 6 million, represents most of the 8 million or so jobs necessary for us to reach full employment.  They’ve also been concentrated in traditional manufacturing states like Ohio, where manufacturing employment went from 1 million in 2000 to 600k today – a net loss of 40%.  That explains much of our politics in the last decade as we careened from one party dominance to another in Congress – scared and angry voters in key states have been constantly voting for change, even against their own choices in the last election.

Labor Day is a good day to spend time staring at the last charcoal of summer and contemplating what brought our nation to the place it is.  The state of labor, especially the traditional view of what that means, has been central to the rise and fall of the US.  If the images seem old and tired it’s because we have become old and tired ourselves.

The strength of this nation has been tied directly to the strength of strong arms and the most valuable resource we possess – our people.  This is the day to remember that.  Tomorrow is a good day to take action and do something about it.

Advertisements

20 thoughts on “Labor Creates All Weath

  1. I think this is becoming obvious and it is what Obama will talk about next week. I hope so at least. I like the way you tied it into the Dollar Standard before and would like to see more on that topic. I do not think the shift away from manuf. was on purpose by any stretch.

  2. A couple of years ago, Thom Hartmann was pounding the manufacturing message pretty hard, and a the time it made good sense to me.
    Part of his argument was how rapidly we were able to mobilize after Pearl Harbor and contrasting that with what would happen today were such a mobilization were necessary.
    I believe this recession/depression can’t begin a significant recovery without a whole lot of new DOMESTIC jobs – including factory jobs.
    “Walmart* jobs” just ain’t gonna cut it!

  3. Excellent blog. One question, though. You cited figures in Ohio without context. What was the total job loss in Ohio in that time and how does the manufacturing loss compare to total? Thanks.

  4. Anna: Yes, this is my warmup for the speech. You can see what I’m looking for, although my plan was laid out some time ago here. I’ll update it in a bit to include two revisions, one your retraining/ education ideas.

    Jack: Yes, we would be screwed if something like Pearl Harbor happened today. Oh, wait … it did 10 years ago … well, youknowwhatImean. 🙂 We are very weak largely because we have been importing heavily for a decade (really three). The jobs market is heavily defined by manufacturing, especially in some places (see next).

    Jim: Sorry, I ran out of space. Here’s the focus on Ohio, as an example of a traditional manufacturing state:
    https://research.stlouisfed.org/fred2/graph/?graph_id=53254&category_id=0

    Note that in the last decade Ohio lost about 500k jobs, about 9% of all jobs they had. 400k of them were in manufacturing, generally the highest paying for the Middle Class. You can see their voting record, flipping from one party to the next, written in that employment graph IMHO.

  5. Laurie: Excellent article! I’d like everyone to read it, it’s really good stuff. But I have to tell you the most annoying thing about Barataria is that I whip out a post about 4 years old in response to nearly everything. Oh, yeah, I have one on factory schools:
    https://erikhare.wordpress.com/2007/09/27/widgets/

    Yes, I agree with the article completely. Education as we know it is designed as an enormous factory to produce factory workers – who are, incidentally, all unemployed now. And so it goes ..

    Thanks!

  6. not at all surprised you have a related post. I’m glad I clicked it because later today I will be picking up a book by John Taylor Gatto at my library. Don’t know how I missed this one as I thought I had read or perused all their education books.

  7. Laurie: Ha! BTW, I loved your article so much I posted it at facebook where it’s been shared by a number of people already, so it’s resonating very well with many folks. No one likes industrial schools and we all want to find a different model. But be prepared to be a bit blown away by Gatto – he’s a bit much to take in on one reading in my experience. But it’s very good stuff IMHO and at least worth talking about.

  8. Pingback: Defined by Work | Barataria – The work of Erik Hare

  9. Pingback: American Jobs Act | Barataria – The work of Erik Hare

  10. Pingback: The Gig Economy | Barataria – The work of Erik Hare

  11. Pingback: The Next Economy | Barataria – The work of Erik Hare

  12. Pingback: Debt Supercycle | Barataria – The work of Erik Hare

  13. Pingback: Swing State | Barataria – The work of Erik Hare

  14. Pingback: A New Beginning | Barataria – The work of Erik Hare

  15. Pingback: Labor Day – Holding On | Barataria – The work of Erik Hare

  16. Pingback: Tale of Two Reports | Barataria – The work of Erik Hare

  17. Pingback: Summing it Up | Barataria - The work of Erik Hare

  18. Pingback: Growing the Gig Economy | SP3M SmartValue Decisions

  19. Pingback: The “Facts” are Failing | Barataria - The work of Erik Hare

Like this Post? Hate it? Tell us!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s