James Robertson’s story is emblematic of a new reality in the manufacturing business: Factory jobs no longer represent a guaranteed ladder to economic vitality.
Call it the Robertson economy.
The 56-year-old Detroiter’s story of walking 21 miles each day to an injection-molding job — first told Feb. 1 in the Detroit Free Press — captivated, inspired and horrified readers. The public spontaneously raised more than $350,000 for Robertson’s cause — all while raining down contempt through social media on his employer, Schain Mold & Engineering, for paying him just $10.55 per hour.
The fact is, experts say and statistics show, that low-wage manufacturing jobs are part of a new normal in the labor markets of the U.S. and metro Detroit following decades of globalization and the Great Recession.
Many companies have even stopped hiring full time and are relying more on temporary workers who do not necessarily receive benefits.
“We may not like factory work at $10 per hour when we’re used to them paying $28, but that’s the market wage,” said Lou Glazer, president of the nonpartisan think tank Michigan Future.
Following the explosion of publicity and social media criticism and threats directed at Schain, company managers were reluctant to talk to the Free Press about their business.
Robertson’s extreme commute is shocking and reflects a fundamentally broken mass-transit system. But his job? His job is the new normal in manufacturing. Globalization forces producers into a desperate, penny-for-penny competition for customers.
In the Robertson economy, either the wages stay low, or the work goes away, somewhere overseas or south of the border. Manufacturing wages have stagnated at lower levels because it’s easy for companies to outsource work to low-cost manufacturers around the globe.
Union proponents see Robertson’s compensation as symbolic of a structural problem plaguing America that public policymakers must address.
Cindy Estrada, a vice president of the United Automobile Workers, decried the impact of low-wage manufacturing jobs on families.
Estrada, who leads contract bargaining with General Motors and multibillion-dollar automotive suppliers, said that, regrettably, a $10.55-per-hour wage is not unusual for workers in the U.S. auto parts industry. Companies such as Lear and Faurecia pay workers less than $15 per hour in some factories, she said.
“The wage is not an anomaly,” Estrada said. “There is a Wal-Marting of the manufacturing sector that people need to learn about.”
But the consternation over low manufacturing wages disguises what has become an emerging trade-off: Low wages breed more jobs.
The U.S. auto industry, in fact, now employs more workers than it has at any time since March 2008. Overall, manufacturers added 228,000 jobs from January 2014 to January 2015, according to figures released Friday.
Economic data suggest low wages helped metro Detroit manufacturers stay competitive and add jobs after the U.S. auto industry’s implosion in 2009, said Don Grimes, a University of Michigan economist.
Metro Detroit’s share of total U.S. jobs in the plastic products manufacturing sector — Schain Mold & Engineering’s field — rose from 1.7 percent in 2009 to an estimated 2.7 percent in 2014. The number of jobs in that sector locally increased from 4,711 to 8,020 — though that’s still down from 11,501 positions a decade ago.
The median U.S. metal and plastics manufacturing worker makes $13.97 an hour, according to the Bureau of Labor Statistics. So, at $10.55 an hour, Robertson is in the bottom quarter of workers in his field, as measured by wages.
Low wages in manufacturing undercut Detroit’s hopes for an economic recovery after the city’s Chapter 9 bankruptcy. About 31.5 percent of Detroit households had income of less than $15,000 in 2013, according to the U.S. Census Bureau.
Economists say the only ticket out of low-wage jobs is education and skills training.
“Sadly, unskilled production worker jobs, in general, and in the plastics product industry in particular, simply are not very well paid,” Grimes said. “If wages were substantially higher than this, then jobs would be moving out of metro Detroit even faster than they have been.”
The stagnation of wages for assembly-line workers at auto suppliers and other traditional manufacturers reflects a sharp contrast with the lucrative profit-sharing checks the Detroit Three automakers are doling out to UAW employees.
This year, the more than 141,000 U.S. hourly auto workers will get profit-sharing checks of as much as $9,000 at
GM, $6,900 at Ford and $2,750 at FCA US (previously Chrysler) under a profit-sharing formula negotiated in the 2011 contracts.
With industry observers expecting GM, Ford and FCA hourly workers to get base-wage increases in their new contracts this fall, the wage disparity between automakers and auto suppliers will widen.
U-M’s Grimes said UAW workers are now the “elite of the working class.”
“They still do well. Better than their peers,” he said. “Most people would jump at a chance for those sorts of jobs.”
Every time one of the Detroit Three announces a plant expansion, automakers are deluged with thousands of applications for positions that pay more than $15 an hour for beginners.
Even as the metro Detroit economy gains low-wage manufacturing positions, the number of permanent jobs is becoming increasingly scarce. A rising share of manufacturers go a step further than Schain — they keep their labor costs low by avoiding permanent hires like Robertson.
Instead, they are increasingly relying on temporary positions. The number of temp jobs in Michigan rose by 66 percent from 2009 to 2013, with average annual pay at $25,872 — or $12 to $13 an hour based on a 40-hour workweek without overtime.
Most traditional manufacturing jobs in Michigan pay $10 to $15 per hour, Glazer said. “And sometimes less,” he said. “The fact that (Robertson) has such hardship that he has to walk 21 miles to work, that’s the unusual part. But the wage is not unusual.”
Still, a faulty mass-transit system plagues the region and can make it difficult for workers to keep a steady job.
Bruce Johnson makes $11 an hour driving a bus for the City of Detroit. He has only been on the job for 30 days. But he already knows he needs a second job to support his family that includes four children ages 2 to 15.
The 57-year old Detroit resident would love to get a job at an auto plant.
He worked at a Chrysler assembly plant until about four years ago, when he missed work too many times and was let go. Johnson said his routine was to get up at midnight, catch the bus at 2 a.m., get to work by 4:30 a.m. and start work at 6 a.m.
The irony: The final time he did not clock in was because he missed the bus.
Manufacturing jobs are returning to the state and metro Detroit, but the wages must compete with rates paid overseas and in Latin America.
—About 31.5 percent of Detroit households had income of less than $15,000 in 2013, according to the U.S. Census Bureau.
—Metro Detroit’s share of total U.S. jobs in the plastic products manufacturing sector rose from 1.7 percent in 2009 to an estimated 2.7 percent in 2014.
—The number of jobs in the sector increased from 4,711 to 8,020 in metro Detroit — though that’s still down from 11,501 positions a decade ago.
—The median U.S. metal and plastics manufacturing worker makes $13.97 an hour, according to the Bureau of Labor Statistics.
—At $10.55 an hour, Robertson is in the bottom quarter of workers in his field, as measured by wages.