Manufacturing job losses deepen with June 3 report

The economy continued its anemic slog through the spring and into summer with a terrible jobs report released on Friday, June 3. A mere 38,000 jobs were added in May, just under one-fourth of the projected 168,000. Meanwhile, manufacturing lost 10,000 jobs, as reported by the Bureau of Labor Statistics. The job participation rate dropped again, with just over 62% of eligible working citizens holding a job, the lowest in decades.

Scott Paul, President of the Alliance for American Manufacturing (AAM), commented on the group’s blog: “Today’s job numbers are shocking, but they come as no surprise to America’s factory workers. While other sectors have seen forms of recovery, manufacturing has only seen about 40% of its pre-recession jobs come back—and this month only brought more job losses.

“In what has become routine for manufacturing, the overall economy didn’t see much growth, either,” continued Paul. “With only 38,000 overall jobs gained last month, it is clear why America’s middle class continues to grapple with unemployment and low-paying career substitutes amid a surging trade deficit.”

The AAM noted that one factor driving the latest job losses was “the goods and services trade deficit, which hit $37.4 billion in April, up $1.98 billion from $35.5 billion in March, according to the Commerce Department. The goods trade deficit with China hit $26.6 billion.

Ask anyone in manufacturing today and they will tell you what this administration won’t: It’s not very good out there. Yet, when you read the economic news in some of the best financial press, they say that last Friday’s “lousy numbers surprised most economists, including those at the Federal Reserve, who have been talking up a tight labor market and hinting at another interest-rate increase or two” (“A Rude Jobs Interruption,” Wall Street Journal, June 4-5, 2016). Maybe the economists and the Federal Reserve should get out from behind their desks and look at the real world of manufacturing instead of the computer models.

While the unemployment rate dropped to 4.7%, it’s a number that doesn’t tell the story. With the low labor participation rate, it says there are a lot of people who have quit looking for work and are living on government subsidies. They are discouraged and have given up or taken early retirement because they don’t have the skills that manufacturing needs.

This administration seems blind to the real problems. No sooner did President Obama leave Elkhart, IN, where he touted the town’s jobless rate of 4%, than a major employer, electronic components manufacturer CTS, announced it is leaving town and putting 230 employees out of work. Maybe the president should have stuck around a bit longer to get the real story.

I talked to a recruiter who specializes in the plastics industry about all this and about wages that we’ve heard recently are at “poverty levels" in manufacturing. He noted that the plastics industry continues to have trouble finding production workers. “Wages for production workers in the plastics industry range from $15 to 18/hour, plus time and a half for overtime,” this recruiter said. “Three out of five companies are begging for help on the manufacturing floor.”

It’s tough to encourage young people to look at manufacturing as a long-term, well-paying career with headlines and numbers like these. Things must change if we are to see a real economic recovery.