As former manufacturing executives, we have seen firsthand how high-quality jobs in our industry benefit Americans from all backgrounds. We also know that the quality of jobs created – not just the quantity – matters. The troubling results of our organization’s new economic study show why. In recent years, overall job quality for Americans has deteriorated dramatically, but communities of color – particularly Black and Hispanic American workers – are bearing the brunt of this decline.
Our organization, the Coalition for a Prosperous America, developed a Job Quality Index (JQI) to calculate the job quality of U.S. workers. Jobs below the national average for private sector, non-supervisory workers are low-quality, while those above the average are high-quality. As of December 2020, just 45 percent of all U.S. nonsupervisory workers had high-quality jobs — a figure that has been declining since 1990.
The data for Black and Hispanic American workers compared to all U.S. workers is even worse, with just 28 percent holding high-quality jobs. Particularly concerning is that the job quality of Black American workers has declined since 2007 — the only minority group to suffer a decline.
The prime driver of these huge disparities is the massive decline in America’s manufacturing sector, where the U.S. lost five million jobs in the last 20 years. These high-quality jobs in places like New York, Philadelphia and Chicago offered workers – even those without college degrees – the opportunity to support a family, own a home and move into the middle class. Unfortunately, these jobs were never replaced.
Using Bureau of Labor Statistics data for the entire U.S. economy, our analysis shows instead that the U.S. economy saw double-digit increases in the last 13 years for low-paid service sector jobs. People of color, including Black and Hispanic American workers, are over-represented in these sectors, as compared to their share of the total workforce. At the same time, high-quality jobs, like those in manufacturing, have declined as a share of the total.
The hollowing out of America’s manufacturing base has devastated workers from all backgrounds, but it has hit Black and Hispanic Americans the hardest. As a result, communities of color where manufacturing once thrived now have fewer job opportunities that pay well above the U.S. median household income. This has further exacerbated the nation’s wealth gap and only added to the inequalities that minority communities already face.
Black Americans, for example, are over-represented in auto manufacturing, making up 18 percent of the industry’s workforce, compared to just 13 percent of the total U.S. non-management workforce. Since the 1940s, when the big three automakers recruited Black workers from the South to build cars in Detroit, the auto industry has been a prime route to middle-class living. But since 2000, a 31 percent decline in U.S. auto manufacturing employment has robbed this community of a vital source of good-paying employment.
This was the case in Youngstown, Ohio, where a burgeoning Black middle class emerged in the metals industry after World War II. But since 1977, when a large steel mill closed, the city’s economy has gone downhill. According to one study, the median Black family in Youngstown earned 18 percent more than the national median Black family in 1980. Today, that same Youngstown family earns $20,646, 35 percent below the national median Black family. The closure of the nearby General Motors assembly plant in Lordstown in 2020 was just another blow to Black American workers.
It’s a similar story for Hispanic Americans. While they are not over-represented in domestic manufacturing, they are in specific sectors such as furniture manufacturing, where they comprise 24 percent of the workforce. But as furniture-making has moved to China, and more recently Vietnam, job opportunities have dwindled.
To address the severe disparity in job quality of Black and Hispanic Americans, one solution policymakers should pursue is the creation of high-quality jobs in manufacturing. In a successful manufacturing company, employees’ pay tends to rise steadily, as their experience and skills improve and as company performance increases. In the industries where we worked (steel and networking technology), it is common for manufacturing employees to earn median pay in the six figures.
The free trade policies that dominated from the 1990s – and the relatively recent recognition that U.S. workers have suffered the most as a result – have decimated the U.S. manufacturing base. This led to rising imports from countries like China that violate the rules, laws, and principles of free trade every single day.
While this has cost the U.S. millions of high-quality, good-paying jobs and led to a steady decline in job quality for minority and non-minority Americans and their families, it is people of color who have suffered the most.
Dan DiMicco is former CEO of Nucor Steel and vice-chairman of the Coalition for a Prosperous America (CPA). Jeff Ferry is a former computer networking executive and chief economist at CPA. Follow them at @danrdimicco and @menloferry.