Monday, January 30, 2012

Making It in America

And here's an excerpt from the Standard Motor Products article:

The combination of skilled labor and complex machines gives American factories a big advantage in manufacturing not only precision products, but also those that are made in small batches, as is the case with many fuel injectors. Luke can quickly alter the program in a Gildemeister's computer to switch from making one kind of injector to another. Standard makes injectors and other parts for thousands of different makes and models of car, fabricating and shipping in small batches; Luke sometimes needs to switch the type of product he's making several times in a shift. Factories in China, by contrast, tend to focus on long runs of single products, with far less frequent changeovers.

It's no surprise, then, that Standard makes injectors in the U.S. and employs high-skilled workers, like Luke. It seems fairly likely that Luke will have a job for a long time, and will continue to make a decent wage. People with advanced skills like Luke are more important than ever to American manufacturing.

But why does Maddie have a job? In fact, more than half of the workers on the factory floor in Greenville are, like Maddie, classified as unskilled. On average, they make about 10 times as much as their Chinese counterparts. What accounts for that?

…For Maddie to achieve her dreams—to own her own home, to take her family on vacation to the coast, to have enough saved up so her children can go to college—she'd need to become one of the advanced Level 2s. A decade ago, a smart, hard-working Level 1 might have persuaded management to provide on-the-job training in Level-2 skills. But these days, the gap between a Level 1 and a 2 is so wide that it doesn't make financial sense for Standard to spend years training someone who might not be able to pick up the skills or might take that training to a competing factory.

It feels cruel to point out all the Level-2 concepts Maddie doesn't know, although Maddie is quite open about these shortcomings. She doesn't know the computer-programming language that runs the machines she operates; in fact, she was surprised to learn they are run by a specialized computer language. She doesn't know trigonometry or calculus, and she's never studied the properties of cutting tools or metals. She doesn't know how to maintain a tolerance of 0.25 microns, or what tolerance means in this context, or what a micron is.

Tony explains that Maddie has a job for two reasons. First, when it comes to making fuel injectors, the company saves money and minimizes product damage by having both the precision and non-precision work done in the same place. Even if Mexican or Chinese workers could do Maddie's job more cheaply, shipping fragile, half-finished parts to another country for processing would make no sense. Second, Maddie is cheaper than a machine. It would be easy to buy a robotic arm that could take injector bodies and caps from a tray and place them precisely in a laser welder. Yet Standard would have to invest about $100,000 on the arm and a conveyance machine to bring parts to the welder and send them on to the next station. As is common in factories, Standard invests only in machinery that will earn back its cost within two years. For Tony, it's simple: Maddie makes less in two years than the machine would cost, so her job is safe—for now. If the robotic machines become a little cheaper, or if demand for fuel injectors goes up and Standard starts running three shifts, then investing in those robots might make sense.

"What worries people in factories is electronics, robots," she tells me. "If you don't know jack about computers and electronics, then you don't have anything in this life anymore. One day, they're not going to need people; the machines will take over. People like me, we're not going to be around forever."

…I went to South Carolina, and spent so much time with Maddie, precisely because these issues are so large and so overwhelming. I wanted to see how this shift affected regular people's lives. I didn't come away with a handy list of policies that would solve all the problems of unskilled workers, but I did note some principles that seem important to improving their situation.

It's hard to imagine what set of circumstances would reverse recent trends and bring large numbers of jobs for unskilled laborers back to the U.S. Our efforts might be more fruitfully focused on getting Maddie the education she needs for a better shot at a decent living in the years to come. Subsidized job-training programs tend to be fairly popular among Democrats and Republicans, and certainly benefit some people. But these programs suffer from all the ills in our education system; opportunities go, disproportionately, to those who already have initiative, intelligence, and—not least—family support.

I never heard Maddie blame others for her situation; she talked, often, about the bad choices she made as a teenager and how those have limited her future. I came to realize, though, that Maddie represents a large population: people who, for whatever reason, are not going to be able to leave the workforce long enough to get the skills they need. Luke doesn't have children, and his parents could afford to support him while he was in school. Those with the right ability and circumstances will, most likely, make the right adjustments, get the right skills, and eventually thrive. But I fear that those who are challenged now will only fall further behind. To solve all the problems that keep people from acquiring skills would require tackling the toughest issues our country faces: a broken educational system, teen pregnancy, drug use, racial discrimination, a fractured political culture.

This may be the worst impact of the disappearance of manufacturing work. In older factories and, before them, on the farm, there were opportunities for almost everybody: the bright and the slow, the sociable and the awkward, the people with children and those without. All came to work unskilled, at first, and then slowly learned things, on the job, that made them more valuable. Especially in the mid-20th century, as manufacturing employment was rocketing toward its zenith, mistakes and disadvantages in childhood and adolescence did not foreclose adult opportunity.

For most of U.S. history, most people had a slow and steady wind at their back, a combination of economic forces that didn't make life easy but gave many of us little pushes forward that allowed us to earn a bit more every year. Over a lifetime, it all added up to a better sort of life than the one we were born into. That wind seems to be dying for a lot of Americans. What the country will be like without it is not quite clear.


Making It in America

In the past decade, the flow of goods emerging from U.S. factories has risen by about a third. Factory employment has fallen by roughly the same fraction. The story of Standard Motor Products, a 92-year-old, family-run manufacturer based in Queens, sheds light on both phenomena. It's a story of hustle, ingenuity, competitive success, and promise for America's economy. It also illuminates why the jobs crisis will be so difficult to solve.

By Adam Davidson

Dean Kaufman

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