The Betrayal of American Manufacturing and Youth
The economic data tell a decades old tale of perfidy that Christians should be concerned about rectifying.
There is a lot of despair and anxiety among youngsters entering the workforce, and they are justified in their apprehension. Their grandparents, who started work in the 1950s and 1960s, have no conception of their difficulties because they genuinely lived in a different world. Hopefully, we can help those grandparents understand the problem because they have a role in fixing it and preventing its perpetuation.
If you started a blue-collar job in an American factory in 1955, your family’s purchasing power increased almost without pause; literally, the meme “line go up.” There was a mild hiccough ahead of and through the 1969-1970 recession (the “Nixon Shock”), but wages resumed accelerating until they were tamed by the exogenous 1973-1975 oil shock recession, only to leap away again and still outperformed accelerating inflation until early 1979.
That year marked the peak of American manufacturing wages and output, which have not recovered even after half a century.
From 1955 to 1979, manufacturing hourly wages rose an incredible 145%, adjusted for inflation. The world wanted American brands and products, and they were only made in America by Americans, with union representation as their leverage tool in a social bargain that prioritized full employment.
Then, the social compact was scuttled. The Federal Reserve prioritized controlling inflation rather than offering full employment. To do that, it raised interest rates to astronomical levels, punishing factory wage earners for excessive government spending through the Vietnam War, the Space Race, military-industrial complex rent-seeking, and foolish policy around America’s gold exchange standard. Congress provided blocking and tackling to drive home the punishment by facilitating the offshoring of American manufacturing.
It greatly pleased the Chamber of Commerce cartel, ushering in decades of ferocious wage deflation as workers bid down their labor to chase fewer jobs because their income and opportunities were exported to rival nations.
The policy devastated whole communities in New York, Pennsylvania, Ohio, Indiana, Michigan, Illinois, and Wisconsin. Towns in adjacent states also suffered because the raw materials extraction, processing, manufacturing, and shipping that used to be concentrated in the “Rust Belt” was a giant economic multiplier.
What the Rust Belt lost, China and South East Asia gained. It was a literal “hot swap” of factories and workers by American companies working with consulting firms and international banking saboteurs who calculated the benefits of labor arbitrage to be more important than patriotism and civic virtue.
Then, they went after defined benefit retirement plans, replacing them with defined contribution plans to goose another few percent out of workers and eliminate any sense of employee responsibility and welfare. This had the dual benefit—for employers—of causing labor instability as wage earners started job hopping with more frequency.
To rub salt in the wounds, employers steadily squeezed more productivity out of employees without sharing those gains, except for a brief period in the 1990s. In the chart below, you can see how dramatically productivity has diverged from wages. Employees have generated sustained surpluses, but shareholders have pocketed almost all those gains.
Rising living costs are another layer of pain, sapping disposable income and forcing youngsters to delay many once-routine milestones for family formation. Here are four examples:
As factory jobs melted away, kids were told a college education was the only way to compete. Even as demand for college spots rose, the government flooded the education sector with cash, causing wild inflation and baiting students to saddle themselves with crippling debt that exceeded the value of their credentials.
As if that weren’t enough, irresponsible government policy at every level has allowed house prices and rental costs to explode. It cannot be considered anything other than a deliberate attempt to make blue-collar home ownership impossible and to coerce those workers to commit large percentages of their income to rental accommodation.
When wage earners fell ill or decided to have babies, the system trapped them with devastating increases in the cost of even routine medical care. In case anyone decided to be unhelpfully healthy, the FDA and big agriculture conspired to contaminate the food supply with chemicals that have sent metabolic and auto-immune disorders soaring.
To keep American workers docile and insecure, Congress has incentivized tens of millions of legal and illegal aliens to flood the country. Those aliens happily undercut American wages even as they compete for education, housing, and medical care to create a terrible “margin squeeze” for the natives.
Apprehensions and expulsions registered by the United States Border Patrol from the 1990 fiscal year to the 2023 fiscal year.
What concern is this to a Christian? As we go about our multiple overlapping vocations, we should have a demonstrated and actionable concern for anyone vulnerable to predatory interests. That especially includes our citizens for whom a manufacturing or trade job is highly prized and necessary because it doesn’t require more than high school or modest additional education and training. Not everyone will be a crypto or AI whiz living the high life in Silicon Valley. We have a Christian duty to provide dignified work at every level, which we should consider daily in all our interactions and roles. In doing so, we also avoid the extreme artificially engineered wealth disparities.
You might say Christians also have a selfish interest. Your church’s budget reflects these realities, with younger cohorts not nearly matching the contribution levels their counterparts achieved half a century and more ago. A root cause of much of the viability crisis in LCMS congregations is youngsters delaying key life decisions and having an unwholesome amount of their income swallowed up by non-discretionary expenses. Let’s care for them as well.
☩TW☩
This is something American conservatism is still wrestling with. A lot of people by default have the attitude of, "You want to get married and have a family? Stop whining and go work 80+ hours a week and climb the company ladder and have 5 side hustles till you make enough to pay your basic bills." Marriage and children are a basic part of God's created order and the foundation of society, yet they've been relegated to a "reward" of sorts for a select handful of high-performing people who figure out how to outperform the vast majority. At least, that's how a lot of people implicitly talk.
Stable family formation for average folks is vital for the perpetuation of society. This needs to be discussed much more within conservatism before there is nothing left to conserve.
Just became a licensed air conditioning contractor, still working a day job but would like to employ people someday. In the process of being part of my local LCMS too, hope to be a light there, even though the number of people no less young people is pretty small. Hopefully the young boys we have will want to get into a blue collar job