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Name: Johnathan Walls

Course: COMS 369


Professors Name: Arness Krause
Date: 2/22/2012
Why is U.S. Manufacturing Deteriorating Along With Manufacturing Wages?
General Purpose: To inform.
Specific Purpose: To inform my audience on why American manufacturing is
deteriorating along with American manufacturing wages.
Organizational Pattern: Topical order
I.

INTRODUCTION
A. Attention Getter: Made in America is quickly becoming a lost phrase.
B. Relevance to Audience: The lost of manufacturing jobs in the US loss has
had a detrimental effect on those people who may be only minimally
qualified to work.
C. Credibility Statement: With fewer jobs available for unskilled workers,
people may find themselves in exceptional poverty. Poverty does not
benefit the US economy since it reduces consumer spending and tax
revenues.
D. Thesis Statement: Manufacturing jobs have by far the greatest impact on
national economy. With the loss of industrial infrastructure, the closing
down of U.S. factories and then exporting of capital abroad, resource is
then not available for U.S. economic expansion.

TRANSITION: Many economists look at US manufacturing employment numbers to


explain why manufacturing workers are compensated less.
II.

BODY
A. 1. Some economists like New York Times Louis Uchitelle and the
Economic Policy Institute say American skilled labor jobs are being
outsourced to foreign countries like China
2. US manufacturing sector has experienced great losses over the past
years during the same period as Chinas sudden economic growth.
a. In 2004, there were about 14.3 million manufacturing jobs, down
by 3 million jobs since 2000, and 5.2 million jobs down since
1979
b. G.E. has more factory jobs overseas than they do in the US
(154,000 compared to 133,000 jobs).
c. For example, in the 1970s, employment at a General Electric
manufacturing plant in Louisville was a high of 17,000, but had
fallen to only about 2,500 hourly waged workers in 2005.

TRANSITION: In contract, according to Bureau of Labor Statistics, two things


happened during the same time period: (1) Chinas unit labor costs in manufacturing have
risen substantially and (2) the United Automobile Workers, a labor union in the United
States and Puerto Rico, has seen a loss of membership since the 1970s. Membership
topped 1.5 million in 1979, falling to 540,000 in 2006.
3. 4 years ago, the United Automobile Workers made a national
agreement with American manufacturers Chrysler, General Motors, and
Ford to pay new hourly workers wages as low as $12 to 14 an hour
a. Manufacturing companies claim the wage reductions are required
to make U.S. manufacturers globally competitive with those
offshore.
b. American workers generally receive a relatively lower level of
benefit compensation than European workers and longtime
American workers
c. For example. according to the Bureau of Labor Statistics, a typical
longtime autoworkers earns a base wage of approximately $28 per
hour U.S. new manufacturing workers earn $12 to $19 an hour
versus $21 to $32 an hour for workers
d. Instead of the guaranteed $3,100 pension a full-paid worker
receives after age 60, new hires have to build their own personal
retirement plan.
TRANSITION: The domestic factors influencing manufacturing employment (demand
and productivity) cannot by themselves explain the scale of job loss in manufacturing
rising trade deficits have made a significant contribution to the industrys job loss.
B. Some economists say there are 3 influences on manufacturing employment
identified
1. They are demand, productivity, and international trade
a. Josh Bivens at the Economic Policy Institute argues that due to the
changing demand patterns and rapid productivity account for the
US shedding many manufacturing jobs
b. Figures 4 and 5 summarize the contributions of demand growth,
productivity growth, and net import growth to manufacturing
employment over 1998-2003 and 2000-2003.
2.
From looking at the table by the Economic Policy Institute, the
growing trade deficits explains 59% of the decline in manufacturing
employment since 1998 and 34% of the decline since 2000.
a. Manufacturing jobs rise as demand for manufacturing output rises
b. Overall the domestic demand must be satisfied by the
manufacturing imports.
TRANSITION:

III.

CONCLUSION
A. Review Statement: The U.S. economy has been shedding manufacturing
jobs since the 1980s, with the current level of manufacturing employment
at its lowest point since 1958. This could be the sign of changing demand
patterns and rapid productivity growth in this sector. Some blame
international trade flows for the loss of manufacturing jobs in the United
States. Others blame the rising trade deficits for making a significant
contribution to the industrys job loss.
B. Memorable Close: The United States needs to increase its manufacturing
base employment because outsourcing has caused the U.S. to no longer
rely on consumer spending to drive demand.
REFERENCES

Central Intelligence Agency. The World Factbook Country Comparison: Distribution of


family income - Gini index.. Retrieved from
https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2172rank.html
Bivens, J. (2004). Shifting blame for manufacturing job loss. Economic Policy Institute.
` http://www.epi.org/publication/briefingpapers_bp149/
Congressional Budget Office. (2004). What accounts for the decline in manufacturing
employment? Economic and Budget Issue Brief. pp. 1-4
OECD. (2010). Intergenerational social mobility across OECD countries." Economic
Policy Reforms Going for Growth. Retrieved from
www.oecd.org/dataoecd/2/7/45002641.pdf/
OECD. Statistics. (2010). (GDP, unemployment, income, population, labour,
education, trade, finance, prices.
The European Union. (2011). Council directive 2001/23/ec." EUR-Lex.
Retrieved
from http://eurlex.europa.eu/smartapi/cgi/sga_doc?
smartapi!celexapi!prod!CELEXnum
doc&lg=EN&numdoc=32001L0023&model=guichett
Uchitelle, Louis. (2011, December 30). Factory jobs gain, but wages retreat. The New
York Times Company. pp. B1.
U.S. Bureau of Labor Statistics. (2011). Compensation costs in manufacturing news
release. Retrieved from http://www.bls.gov/news.release/ichcc.htm/
U.S. Bureau of Labor Statistics. (2011). Union members summary. Retrieved from
http://www.bls.gov/news.release/union2.nr0.htm