Name: Johnathan WallsCourse: COMS 369Professor’s Name: Arness KrauseDate: 2/22/2012

Why is U.S. Manufacturing Deteriorating Along With Manufacturing Wages ?

General Purpose: To inform. Specific Purpose: To inform my audience on why American manufacturing is deteriorating along with American manufacturing wages. Organizational Pattern: Topical order

I. INTRODUCTION A. Attention Getter: “Made in America” is quickly becoming a lost phrase.B. Relevance to Audience: The lost of manufacturing jobs in the US loss has

had a detrimental effect on those people who may be only minimally qualified to work.

C. Credibility Statement: With fewer jobs available for unskilled workers, people may find themselves in exceptional poverty. Poverty does not benefit the US economy since it reduces consumer spending and tax revenues.

D. Thesis Statement: Manufacturing jobs have by far the greatest impact on national economy. With the loss of industrial infrastructure, the closing down of U.S. factories and then exporting of capital abroad, resource is then not available for U.S. economic expansion.

TRANSITION: Many economists look at US manufacturing employment numbers to explain why manufacturing workers are compensated less.

II. BODY A. 1. Some economists like New York Times’ Louis Uchitelle and the

Economic Policy Institute say American skilled labor jobs are being outsourced to foreign countries like China 2. US manufacturing sector has experienced great losses over the past years during the same period as China’s sudden economic growth.

a. In 2004, there were about 14.3 million manufacturing jobs, down by 3 million jobs since 2000, and 5.2 million jobs down since 1979

b. G.E. has more factory jobs overseas than they do in the US (154,000 compared to 133,000 jobs).

c. For example, in the 1970s, employment at a General Electric manufacturing plant in Louisville was a high of 17,000, but had fallen to only about 2,500 hourly waged workers in 2005.

TRANSITION: In contract, according to Bureau of Labor Statistics, two things happened during the same time period: (1) China’s unit labor costs in manufacturing have risen substantially and (2) the United Automobile Workers, a labor union in the United States and Puerto Rico, has seen a loss of membership since the 1970s. Membership topped 1.5 million in 1979, falling to 540,000 in 2006.

3. 4 years ago, the United Automobile Workers made a national agreement with American manufacturers Chrysler, General Motors, and Ford to pay new hourly workers wages as low as $12 to 14 an hour

a. Manufacturing companies claim the wage reductions are required to make U.S. manufacturers globally competitive with those offshore.

b. American workers generally receive a relatively lower level of benefit compensation than European workers and longtime American workers

c. For example. according to the Bureau of Labor Statistics, a typical longtime autoworkers earns a base wage of approximately $28 per hour U.S. new manufacturing workers earn $12 to $19 an hour versus $21 to $32 an hour for workers

d. Instead of the guaranteed $3,100 pension a full-paid worker receives after age 60, new hires have to build their own “personal retirement plan”.

TRANSITION: The domestic factors influencing manufacturing employment (demand and productivity) cannot by themselves explain the scale of job loss in manufacturing— rising trade deficits have made a significant contribution to the industry’s job loss.

B. Some economists say there are 3 influences on manufacturing employment identified

1. They are demand, productivity, and international tradea. Josh Bivens at the Economic Policy Institute argues that due to the

changing demand patterns and rapid productivity account for the US shedding many manufacturing jobs

b. Figures 4 and 5 summarize the contributions of demand growth, productivity growth, and net import growth to manufacturing employment over 1998-2003 and 2000-2003.

2. From looking at the table by the Economic Policy Institute, the growing trade deficits explains 59% of the decline in manufacturing employment since 1998 and 34% of the decline since 2000.

a. Manufacturing jobs rise as demand for manufacturing output rises b. Overall the domestic demand must be satisfied by the

manufacturing imports.

TRANSITION:

III. CONCLUSIONA. Review Statement: The U.S. economy has been shedding manufacturing

jobs since the 1980s, with the current level of manufacturing employment at its lowest point since 1958. This could be the sign of changing demand patterns and rapid productivity growth in this sector. Some blame international trade flows for the loss of manufacturing jobs in the United States. Others blame the rising trade deficits for making a significant contribution to the industry’s job loss.

B. Memorable Close: The United States needs to increase its manufacturing base employment because outsourcing has caused the U.S. to no longer rely on consumer spending to drive demand.

REFERENCES

Central Intelligence Agency. The World Factbook Country Comparison: Distribution of family income - Gini index.. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

Bivens, J. (2004). Shifting blame for manufacturing job loss. Economic Policy Institute.` http://www.epi.org/publication/briefingpapers_bp149/

Congressional Budget Office. (2004). What accounts for the decline in manufacturing employment? Economic and Budget Issue Brief. pp. 1-4

OECD. (2010). Intergenerational social mobility across OECD countries." Economic Policy Reforms Going for Growth. Retrieved from

www.oecd.org/dataoecd/2/7/45002641.pdf/

OECD. Statistics. (2010). (GDP, unemployment, income, population, labour, education, trade, finance, prices.

The European Union. (2011). Council directive 2001/23/ec." EUR-Lex. Retrieved from http://eur- lex.europa.eu/smartapi/cgi/sga_doc?

smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=32001L0023&model=guichett

Uchitelle, Louis. (2011, December 30). Factory jobs gain, but wages retreat. The New York Times Company. pp. B1.

U.S. Bureau of Labor Statistics. (2011). Compensation costs in manufacturing news release. Retrieved from http://www.bls.gov/news.release/ichcc.htm/

U.S. Bureau of Labor Statistics. (2011). Union members summary. Retrieved from http://www.bls.gov/news.release/union2.nr0.htm