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Manufacture This

The blog of the Alliance for American Manufacturing

The nonpartisan U.S. Conference of Mayors (USCM) is out with a new report on income inequality that includes some notable findings about the kinds of jobs that were generated in the wake of the Great Recession — and the news isn’t good.

While the United States has regained the 8.7 million jobs lost during the recession, those jobs pay an average 23 percent less than the jobs that were lost, the USCM study shows.

And as we here at the Alliance for American Manufacturing (AAM) have been pointing out for months, the USCM found that one of the chief reasons for that big wage gap is because the manufacturing jobs that were lost during the recession haven’t come back.

About 2.27 million manufacturing jobs were lost during the recession, and the average annual wages for those jobs were $63,215, according to the USCM. Data from the Bureau of Labor Statistics backs the USCM report — there were 14.2 million manufacturing jobs in the United States in January 2006; by July 2014 there were roughly 12.1 million manufacturing jobs.

Meanwhile, the new jobs gained through the second quarter of 2014 posted average wages of $47,171, and included growth in sectors such as hospitality, health care and administrative support, according to the USCM.

People who lost middle-class manufacturing jobs during the recession continue to struggle. That’s driving a rise in income inequality and continuing to hinder the slow-going economic recovery.

The good news, of course, is that there are ways for lawmakers to encourage manufacturing growth — and we’re happy to see the USCM included a number of policy recommendations for mayors in the report, including this one:

[P]rograms to build the nation’s infrastructure add to the capital stock, improving productivity, and employing workers in households dearly in need of income sources, notably in those goods-producing sectors which suffered most during the recession.

Along with investing to rebuild infrastructure, AAM recommends U.S. policymakers do more to level the playing field for U.S. manufacturers and workers by taking action to enforce our trade laws and stop currency manipulation, which could create up to 5.8 million U.S. manufacturing jobs.

Image from U.S. Conference of Mayors report, U.S. Metro Economies: Income and Wage Gaps Across the US.