Why Manufacturing Jobs Are Better Jobs

FT Alphaville published an interesting analysis on why manufacturing jobs in the US are better than other jobs. The article basically debunks Gary Cohn, ex-head of the President’s National Economic Council simplistic and lack of critical thinking views on why one would prefer a nice cushy office job in an air-conditioned office than working in mine or factory which involves hard physical labor.

The following is an excerpt from the piece:

Manufacturing workers, though there are only about 9 million of them, make about $21.50 an hour. There are only 550 thousand mining and logging workers, but they make more than $28 an hour. They aren’t the highest-paying jobs in America, but for someone without a college degree, a manufacturing job in front of a blast furnace pays far better than an air-conditioned job inside a Target.

People in finance are famously overworked, so we’ll forgive Mr Cohn for not knowing that for many Americans, pay isn’t the only consideration. Simply getting enough hours is a challenge. Here, standing in front of a blast furnace or risking black lung (as he puts it) both have a massive advantage: both occupations offer 40 or more hours a week.

Your weekly paycheck isn’t your wage; it’s your wage multiplied by your hours. Over the last 40 years, hours overall have drifted down, particularly in retail, where in the last decade scheduling software has allowed companies to more efficiently call employees in or dismiss them. But manufacturing jobs, which are more likely to be unionised, still offer 42 hours a week. Mining and logging, which tend to run closer to capacity, offer 47 hours.

And in America, whether an employer offers benefits can make a huge difference. Last year 81 percent of production jobs offered health insurance. Overall for private workers, 68 percent. For service jobs — the single largest group — 39 percent. So the job that Gary Cohn says Americans wouldn’t choose at the same pay turns out to have better pay, better hours, and better benefits. People are nostalgic for manufacturing jobs not just because it’s nice to make something. It’s because they’re better jobs.

Source: Manufacturing jobs are better jobs, FT Alphaville

Another important point to be noted is that building a factory to manufacture something involves millions of dollars and machinery and takes time. Hence a company that invests so much time and effort into a manufacturing facility is not going to shutdown overnight and layoff all the workers. On the other hand, a retail joint like a department store in a mall, a coffee shop, a donut shop, a hair-style shop, a shoe shop, etc. can be shutdown overnight without any major need to dismantle machinery or other issues. So in a way the lowest paying jobs are also most vulnerable to disappear any day. This is one more reason why people yearn for manufacturing jobs than a retail job.

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