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US Manufacturing Wages Not Too High

Wages are not the only reason companies might not be coming back.

US manufacturing wages are competitive, but wages are not the only reason companies might not be coming back.

The Bureau of Labor Statistics released a report this week, International Comparisons of Hourly Compensation Costs in Manufacturing, 2011, that debunks the myth that manufacturing worker wages are not competitive with those of other major manufacturing countries. This press release describes the report,

Manufacturing hourly compensation costs in the United States in 2010 were lower than in several northern and western European countries, Australia, and Canada, but higher than in the United Kingdom and 19 countries in southern and eastern Europe, Asia, and South America, the U.S. Bureau of Labor Statistics reported today. U.S. hourly compensation costs rose about 2 percent from the previous year to $34.74. From 1997 to 2010, U.S. compensation cost competitiveness in manufacturing improved relative to all but five countries covered: Brazil, Germany, Japan, the Philippines, and Taiwan.

The report shows that, in fact, the United States ranks around the middle in terms of average wages. U.S. manufacturing workers have an hourly wage that is $1 an hour less than Italy and Canada, $7 less than in France and almost $12 an hour less than Germany.

The take-away from this: what American workers want in wages and benefits should not be the impediment to creating good jobs at home.

Not Just Wages

But it’s not just the wages, it’s the offshoring tax breaks (and possibly the proposed “territorial tax”), manufacturing policies executed by other contries (the US doesn’t even have a manufacturing policy) plus
lack of worker rights that attracts many of those moving to or staying in China and other countries, plus the ability to use that lack of rights as a hammer on workers back home. This is why the Club for Growth (Wall Street) and Chamber of Commerce (huge multinationals) types are so insistent on keeping us from cracking down on China, etc.

The proposed “territorial tax” has been introduced into the “fiscal cliff” discussions by the CEOs of the “Fix the Debt” campaign. It lets multinational companies off the hook for taxes on offshore profits. This gives corporations an incentive to move everything that makes them money out of the country — every profit center, every job, every factory, every designer, inventor, etc. If you are a smaller business or a business that doesn’t move, you lose.

And yes, in spite of all the corporate PR following reports of abuses of workers the abuses of worker rights continue. Here is a report from Engadget last week: French reporters infiltrate Foxconn iPhone 5 factory, find few of the vaunted changes,

Envoyé Spécial, a 60 Minutes-like program from public TV station France 2, went undercover at the Zhengzhou iPhone 5 Foxconn factory recently (within the past two months) and reported many of the same problems the Chinese manufacturer and Apple promised to fix earlier this year. According to the story that aired last night, dorms at the new factory were occupied by workers despite the fact that many were still under construction and had no elevators, electricity or running water — apparently because builders focused on the production lines at the expense of housing. A Foxconn manager even warned employees on hidden camera not to plug devices into dorms that did have electricity, saying that eight workers were killed in a fire after overloading circuits.

In addition, reporters met lower-paid student employees who were of legal age to work there but had no desire to do so, saying corrupt school administrators illegally told them they’d lose their diplomas if they didn’t take a job. Meanwhile, regular workers also claimed that much of their upgraded $290 monthly salary was still being absorbed by the company through housing, insurance and food — with one claiming he only had $340 left after a year of toil. …

Note, click through for Foxconn’s response in an update to the Engadget report.

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