Thursday, July 30, 2009

The Myth of "High Paying Manufacturing Jobs"

Earlier this week, I saw a surrealistic debate on CNBC between an SEIU representative and Wharton's Professor Jeremy Siegel.

Siegel cited economic theory that advanced economies typically lose lower-paying jobs, including simpler manufacturing, to lesser-developed, lower-wage countries. He cited, over the past several decades, the loss of comparatively few US manufacturing jobs, in the tens of thousands, in comparison to the addition of millions of service jobs. Siegel also asked the SEIU rep if he truly wanted his union members to be paid wages on a par with those of lesser-skilled Asians?

Somehow, all of this was lost on the SEIU guy, including the irony of Siegel pointing out how his own sector benefited.

The SEIU rep kept babbling about how we "need to create high-paying manufacturing jobs," as if they are simply devised out of thin air. And, that by saying that phrase, tautologically, such jobs must exist in a long run, profitable US manufacturer.

He then continued by ticking off various guarantees that workers should have- pensions, high pay, health care. Michele Caruso-Cabrera replied that there are no guarantees now, anyway. Unions price their workers out of the market, so continued employment with such lush packages as the SEIU rep listed was often in jeopardy.

Such as at GM and Chrsyler.

The SEIU guy went nuts.

What was evident, though, was his inability to understand Siegel's first, simplest point, i.e., you really don't want US workers being paid Chinese rates for manufacturing.

Missing, too, was an understanding by the union member that advanced manufacture requires education and training. If workers can't cut it, they're destined for lower-paying jobs. Period.

There just are no guarantees with global competition.

Along the way, GE CEO Jeff Immelt's dopey speech calling for more US manufacturing was cited, and Siegel sort of laughed and implied Immelt is an idiot. That's when he began to describe the low-paying type of work that manufacturing now typically is which has been sent overseas. That we are a service and IP giant, not really destined to grow manufacturing in a world with cheaper labor overseas.

It's understandable, sadly, that the SEIU representative continues to believe in the myth of "high paying manufacturing jobs" in the US, with no thought of how they would possibly be globally competitive.

It's totally baffling, at first, why GE's Immelt would be similarly ill-informed. But, then, as readers of this blog know, I have never believed that Immelt has been a worthy successor to Welch, or, for that matter, that the former has shown any ability to merit his current position and compensation.

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