Want to rebuild the middle class? Strengthen manufacturing.
By Andrew Stettner
Sep 17, 2018
What does it mean to be middle class in America? Some would argue it now means so many different things that the term has lost its meaning. But for families and communities in the Great Lakes region, one image universal to the American experience endures: families supported by good-paying manufacturing jobs.
This image has survived even as the manufacturing sector has taken a hit in the early parts of the 21st century. The industrial heartland states of Pennsylvania, Ohio, Michigan, Indiana, Wisconsin, and Illinois combined lost 36 percent of manufacturing jobs from 2000 to 2010. These losses haven’t just led to declining populations and shuttered factories; they’ve also contributed to our increasingly tumultuous and turbulent politics. And despite the recent manufacturing recovery, middle-class wages have barely budged. Today, wages for workers without a college degree actually have less purchasing power than they did forty years ago, according to a recently released report by the Economic Policy Institute.
Over the past year, my organization — The Century Foundation — has led a campaign through Pittsburgh, Cleveland, and Chicago in search of strategies to rebuild the middle class. Our goal was to develop a national economic agenda that starts, first and foremost, with the needs of the communities that have been hurt the hardest. In organizing the tour, we worked with leaders who never accepted the inevitability of industrial decline, and who have successfully developed local strategies to save manufacturing jobs, especially for the most vulnerable small companies.
Now, these efforts are taking hold. Nearly half a million manufacturing jobs have returned to the region. And while factories won’t ever be as large a part of the economy as they once were, regional leaders are developing a vision for a strong industrial base that supports a diversified middle-class economy. It’s a vision backed up by data that shows that areas that have retained more manufacturing jobs have better, not worse, service economies.
The first thing we heard during the tour is that the region is shaking off its Rust Belt image and embracing high tech and highly innovative manufacturing. Cutting-edge technologies like 3-D printing and robotics and factories like the ArcelorMittal steel mill in Cleveland — the first in the world to produce one ton of steel per hour of labor — are the future of the industrial heartland. It’s a smart economic focus, too. In Ohio, for example, advanced manufacturing industries pay $65,000 per year, compared to $53,000 in other manufacturing jobs.
We also observed a call to action for employers and communities to work together to prepare the manufacturing workforce of the future. Over the past year in Chicago, there were two manufacturing job openings for every one person hired, many of which were front-line production jobs that don’t require a college degree. That data underscores that young people today have a misconceived notion that manufacturing work is dirty work and hard to come by. Spurred on by a dramatically aging workforce, companies like Dan T. Moore in Cleveland and Laystrom Manufacturing in Chicago are reaching out anew to high schools and community groups in urban communities to attract and train new workers.
The third thing we saw were communities developing innovative ways to work with local manufacturers to save and grow jobs, relying on smarter, more sustainable approaches than big tax giveaways. Pennsylvania’s Strategic Early Warning Network has saved thousands of jobs by providing targeted business turnaround assistance to small- and medium-sized companies at risk of closure. Chicago translated its need to replace aging subway cars into a new rail car manufacturing plant that will serve as an anchor for the distressed South Side neighborhood.
But these communities can’t do it alone — they need the federal government to be a strong partner. Advanced manufacturing has received a major boost from the 2014 Manufacturing USA initiative, which is bringing hundreds of companies together with university and technical researchers to develop cutting-edge technologies. Similarly, communities are relying on federal funding to rebuild technical training programs and apprenticeships that have been allowed to wither in recent decades. These efforts should be accelerated, not diminished.
The truth is that policy choices made in Washington, D.C., have a huge impact on the lives of individuals and the health of communities in the industrial heartland. For too long, the prevailing view has been that the federal government should not pick winners or losers in the economy. But we canchoose a different course — one where we invest in sectors that have a proven track record of creating middle-class jobs.
Manufacturing is here to stay. It must be a critical component of a broader economic strategy, which includes policies to up-skill workers, strengthen collective bargaining, and increase wages and benefits. Together, that is an agenda that can rebuild the middle class — not only in the industrial heartland, but across the country.
Andrew Stettner is a senior fellow at the Bernard L. Schwartz Rediscovering Government Initiative at The Century Foundation.