STUDY: Trump’s Trade, Tax, Industrial Policies Have Let Down Midwest Manufacturing Workers, Communities
Posted September 28, 2020 in Press Releases
Cleveland, OH — Manufacturing workers in four key Midwest states that voted for President Trump have been the most hurt by Trump’s trade and industrial policies, according to a new analysis released today by experts Andrew Stettner at The Century Foundation (TCF) and Mike Shields at Policy Matters Ohio, with support from The Groundwork Collaborative.
The study, which looks at job and wage growth trends since 2000, finds that even before COVID-19 collapsed large segments of the economy, the manufacturing sector in Michigan, Ohio, Pennsylvania, and Wisconsin had entered a recession. A disastrous trade war with China, weak trade negotiations with other countries, and policies that favor multinational corporations that manufacture overseas have especially stunted manufacturing growth in America’s industrial heartland.
“Midwesterners aren't afraid of hard work. We just ask that our leaders work hard for us, not corporations,” said Mike Shields, a researcher at Policy Matters Ohio, a nonprofit research institute, and co-author of the report. “President Trump promised a blue collar resurgence, but data show the manufacturing sector entered a recession, deepening pain in the Midwest, even before the COVID-pandemic and recession. There has been no manufacturing recovery in the Great Lakes region."
The report features three case studies of manufacturing operations in the region: 1) Racine, Wisconsin’s Foxconn project, which demonstrates the problem with tax giveaways as economic development strategy; 2) General Motors’ Lordstown, Ohio assembly plant, which shows how trade policies continue to facilitate the transfer of quality jobs to low-wage suppliers; and 3) Fuyao glassworks, in Moraine, Ohio, which underscores both the need and failure to enforce existing labor protections.
Key findings from the study include:
Manufacturing job growth declined more in Michigan, Ohio, Pennsylvania, and Wisconsin than the rest of the country. These four states in America’s industrial heartland saw manufacturing jobs decline by 0.5% in 2019, while manufacturing jobs in the rest of the country grew by 0.7%. In fact, manufacturing jobs in nearly all four states grew faster between 2010-2016 under the Obama administration than they did during the first two years of the Trump Administration.
Manufacturing workers with a high school diploma or less earn a wage premium over their counterparts in other sectors, though employers have used tactics including union busting and domestic and foreign outsourcing to push this premium down. Women ($.88) and men ($1.81), workers who are Black ($1.46), white ($2.88) and brown (Hispanic workers of all races earn $.93 more in manufacturing) earn a wage premium. In some years, this premium is higher for workers of color, indicating that with good policy, the manufacturing sector can be a source of more equitably shared prosperity.
The trade deficit under Trump grew in 8 of the 10 major exporting industries in these 4 states. This includes plastics and rubber manufacturing, an important subsector in Ohio, which saw a decline in exports from 2016 to 2019 and a larger trade deficit.
“Manufacturing has long been the economic backbone of the Midwest economy and it can thrive again,” said Andrew Stettner, a senior fellow at The Century Foundation, a progressive think tank and co-author of the report. “We need strong leadership to negotiate trade with other countries and trade policies that serve workers, not multinational companies that send jobs overseas. ”
The Century Foundation (TCF) is a progressive, nonpartisan think tank that seeks to foster opportunity, reduce inequality, and promote security at home and abroad. For over 100 years, TCF experts have sweat the details of policy in order to advance progressive change. TCF is based in New York, with an office in Washington, D.C. Follow the organization on Twitter at @TCFdotorg and learn more at www.tcf.org.
Policy Matters Ohio is a nonprofit policy research institute that creates a more vibrant, equitable, sustainable and inclusive Ohio through research, strategic communications, coalition building and policy advocacy. Learn more at: www.policymattersohio.org.
The Groundwork Collaborative is dedicated to advancing a coherent and persuasive progressive economic worldview and narrative capable of delivering meaningful opportunity and prosperity for everyone. Our work is driven by a core guiding principle: We are the economy. Groundwork Collaborative envisions an economic system that produces strong, broadly shared prosperity and power for all people, not just a wealthy few. Follow Groundwork Collaborative on Twitter at @Groundwork and learn more at GroundworkCollaborative.org.