Not Your Father's Factory Job

December job numbers are out -- overall, we have a continuation of some positive trends (payrolls up, unemployment ticking down) mixed with a continuation of the usual negative trends (long-term unemployment remains high, and new jobs tend to be in low-paying sectors).

But there is at least one surprising, and disturbing, new development lurking within the new labor force data: while the manufacturing sector is steadily expanding, it appears to be joining the ranks of lower-wage jobs typically associated with the service sector. Indeed, as I've mentioned before, the "wage premium" for manufacturing jobs has been disappearing over the last several decades, relative to service sector jobs requiring similar skill levels.

We have more proof of this trend from yesterday's Wall Street Journal, which details how Canadian manufacturing firms are looking to the U.S. to justify lowering wages for their employees. The WSJ euphemistically describes the U.S. manufacturing sector as more "efficient" with more "productive" workers, but this is really just WSJ-speak for "cheaper" workers.

And the numbers are clear: since 2000, manufacturing wages have increased over 70 percent among OECD nations and over 80 percent in Canada, while U.S. manufacturing wages have risen just under 40 percent.

So while manufacturing may be making some kind of a comeback in the U.S., this by no means signals a return of the high-road jobs that built the American middle class decades ago.

But, I have to confess, I'm stuck at a crossroads here. I was born and raised in suburban Detroit, an area decimated by the near-total evacuation of the auto industry. This recent expansion of U.S. manufacturing has been good to my home state: 2011 was the first year since 2000 that Michigan posted positive net job growth, fueled overwhelmingly by a strong rebound in the auto industry (indeed, the manufacturing sector in Michigan is growing over 4 times as fast as the rest of the country).

The problem is, the auto industry is no exception to the trend of low-wage manufacturing jobs: much of the auto industry's profits have been driven by steep cuts in labor compensation -- due to the implementation of a "two-tier" wage structure (which the UAW agreed to), new auto workers are paid around $14 per hour, about half as much as longtime employees.

Consequently, many new workers at Ford are no longer able to afford the very cars that they make -- but, given the stunning levels of unemployment generated by the auto industry's collapse, maybe two-tier wages are part of an acceptable short term fix for creating jobs in an industry that could otherwise just move overseas entirely (unlike many service sector jobs, which are also low-paying but not easily outsourced, making them totally justifiable targets for a mandated minimum wage increase).

Of course, suppressed wages are unacceptable in the long term, and if the auto industry can only survive by winning a race-to-the-bottom, then that's just one more reason for the federal government to get behind an aggressive investment in high-road green jobs and a new American clean economy. In the meantime, we shouldn't be fooled into thinking that the manufacturing jobs of today will be able to support the labor market of tomorrow.