Elite's Distaste for Factories Contributes To Loss of Good Jobs

By Ed Oliver
May 2003 Print Edition

Main Story: Losing Good Jobs in Massachusetts

American cities, including Boston, have undergone a transformation in the final decades of the 20th Century that reflects "an almost aesthetic or cultural distaste for blue-collar work among our political, economic and media leaders," wrote David Friedman Ph.D. in the Jan/Feb Atlantic Monthly.

As a result, the U.S. has shed 11 percent of its well-paying manufacturing jobs since 1998 - the second worst rate of job loss in the past fifty years, he said.

"As early as 1969, for example, New York City adopted a plan that explicitly called for the systematic displacement of the city's 'low wage' industrial base by a subsidized 'modern' office economy," he said.

The city provided tax breaks and development assistance to the office economy while zoning and regulating many businesses in the industrial economy out of existence, he said.

"Over the next three decades this policy stripped 600,000 well-paying manufacturing jobs from what was once America's largest and most diverse production center, replacing them with a small number of professional positions at one extreme and many more low-paying service jobs at the other."

Friedman said similar, one-dimensional growth has long been apparent in deindustrialized Boston, San Francisco and other cities, with soaring property prices driving out the working class.

The advent of the "New Economy" seemed to validate the strategy for a while. The reasoning became, "If investing in Internet development, software and finance can spur job growth, why not tailor domestic and international policies to favor office parks at the expense of factories?"

But despite fashionable ideas that America could flourish as a deindustrialized society, manufacturing remains crucial for prosperity, he said.

"The average production-sector job creates three times as many additional employment opportunities as the average service job. Given that most of U.S. workers lack college degrees (more than 60 percent) and that manufacturing disproportionately employs the non-college educated and pays wages roughly 20 percent higher than other sectors, it is not surprising to find that as manufacturing declines, economic inequality rises," he said.

Friedman, a senior fellow at the New America Foundation, calls for an effective industrial policy that would have the following key elements:

Re-examine our policy of maintaining a strong dollar. A strong dollar benefits the financial services industry and affluent American consumers but undercuts the ability of domestic manufacturers to compete with foreign producers.
Have a more balanced trade policy. The U.S. government has gone to great lengths looking out for "New Economy" companies worried about copyright infringement overseas, but has turned a blind eye to the unfair trade practices in the manufacturing sectors of those economies.
Abolish state and local incentives that have favored information-age jobs over working and middle-class jobs. These include tax, land-use rules and development policies.