Workers of Color Suffered the Most Due to Factory Job Loss, But Manufacturing Still Pays a Premium

By Elizabeth Brotherton-Bunch
Jan 31 2022 |
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Investing in infrastructure, clean energy and critical manufacturing will create a whole lot of well-paid jobs that could benefit these workers. Rebalancing trade will likely help, too.

More than 5 million manufacturing jobs were lost over the past 25 years due to the impacts of globalization, and workers of color suffered the most, according to new research from the Economic Policy Institute (EPI). But as researchers Valerie Wilson, Robert Scott, Jori Kandra and Daniel Perez outline, factory jobs still provide a significant wage premium compared to other sectors — and smart policy can help increase manufacturing job opportunities for all workers.

We’ve written about the disproportionate impact that factory closures have had on Black workers before. Our 2016 report, Unmade in America: Industrial Flight and the Decline of Black Communities, examined how deindustrialization hurt Black workers, who were often the first to lose their jobs and the last to find new work. Black workers also faced racist policies like redlining, which made it harder for them to recover when a factory closure devastated a local community, something happened all too often over the past several decades.

The EPI research tells a similar tale, with the researchers studying how globalization and manufacturing job loss has impacted all workers. What they found is that “the loss of manufacturing jobs has been particularly devastating for Black and Hispanic workers and other workers of color,” especially because they “represent a disproportionate share of those without a college degree, and for whom discrimination has limited access to better-paying jobs.”

But the EPI report also offers plenty of reasons to be hopeful. For one, manufacturing jobs still pay a wage premium for all workers, including workers of color. EPI reports:

For median-wage, non-college-educated employees, Black workers in manufacturing earn $5,000 more per year (17.9% more) than in nonmanufacturing industries; Hispanic workers earn $4,800 more per year (+17.8%); AAPI workers earn $4,000 more per year (+14.3%); and white workers earn $10,100 more per year (+29.0%). 

Manufacturing workers also are more likely to be in a union compared to other sectors, which not only typically yields higher pay but also more benefits.

United Steelworkers member EJ Jenkins told USA Today that his job at U.S. Steel helped him to pay for his wedding and buy a home. When he suffered burns in a fire, his health insurance helped cover a lot of the cost of the medical procedures, such as skin grafts, that helped him recover.

For decades, manufacturing also allowed Jenkins’ hometown of Gary, Ind., to thrive. When factories went away, the entire community suffered:

Looking at the many deserted factories that dot the streets of his hometown, Jenkins believes a revitalized manufacturing base could help revive Gary and other largely Black communities that have seen manufacturing facilities close, jobs disappear and resources dwindle.

“We’re looking for equal opportunity,” Jenkins says, emphasizing the need for factory hires to reflect the city’s population. “If you’re looking at hiring that person, and I have the same qualifications, you should look at hiring me too.” 

So what can be done to create more manufacturing jobs and help communities like Gary thrive once again?

AAM President Scott Paul noted on Monday that the United States is at a historic point. If properly implemented, the infrastructure investment bill passed last year offers real opportunity to give a boost to communities nationwide and create millions of new jobs. Lawmakers also are considering vital legislation to invest in critical manufacturing and help the United States compete with China; doing so also has the potential to create millions of well-paid factory jobs.

The average annual salary for a worker at the planned semiconductor facility in Ohio is expected to be $135,000 a year, for example.

Rebalancing trade also will be critical. The rising trade deficit with China cost 3.7 million jobs between 2001 and 2018, according to EPI. The need to respond to climate change also provides a historic opportunity. The United States is already taking steps to transition to clean energy and electric vehicles; policy such as Buy America preferences will ensure that a lot of the money the federal government spends on these efforts supports American jobs and companies.

Manufacturing still offers so much opportunity for Americans, especially workers without a college degree. Now it’s up to policymakers to ensure that all Americans can share in the wealth.

Click here to read the full EPI report.