It has become convenient in some circles to blame unions for the hemorrhaging of jobs in the manufacturing sector. The facts, however, simply do not support that argument. Instead, the main culprit for manufacturing’s troubles over the past decade is an overvalued U.S. dollar. Smaller contributors to manufacturing’s decline include a dysfunctional health care system and the high labor costs of managers and executives.
What is equally clear is that the pay and productivity of blue-collar workers in manufacturing are not a competitive drag. In fact, these workers actually earn lower wages than many of the most important U.S. trading partners while simultaneously posting higher productivity levels. In short, the relatively low pay and high productivity of the blue-collar workforce in the U.S. manufacturing sector provides an important competitive edge over its trading partners.
This report documents that competitive edge and how it has been squandered.