Thursday, February 25, 2016

Stick a Fork in Manufacturing

I have a bone to pick with workforce development programs. Name one initiative that favors labor. Real estate development favors the real estate developers. Economic development favors industry. Workforce development should promote, you know, the workforce. It never does. The only salve for the blue collar soul is community development, which takes a backseat to real estate development.

All workforce development programs should start with two questions. First, which jobs will globalization and technology make vestigial? Second, how can labor avoid the trap of a captive labor market? The first question is tough to answer. I don't know. No one knows. The second question is easy. Stop asking regional employers how to best to subsidize the wage they pay. Start asking regional employees how to best maximize their pay.

This conflict of interest has taken a bizarre turn in Maryland. Tenured manufacturers don't like labor favors for newcomers from other states:

"Existing Maryland manufacturing companies will be depleted of key talent because they'll drive a couple miles away from their current job and get a tax-free job," said Drew Greenblatt, the owner of Baltimore-based Marlin Steel and a regular spokesman for American manufacturing. "This is basically picking winners and losers, and the winners will be newbies that move to Maryland, not people who have been here for years or generations."

If blue collar labor works for a company new to Maryland, labor gets a tax break. That's great for labor already living there. Manufacturing jobs don't pull people across state lines like it used to in the age of the Great Migration. Service jobs and most manufacturing jobs are substitutable. Will you make widgets or sell widgets? The wage is about the same for either occupation.

If Maryland makes hay in attracting manufacturing employers, people won't follow those jobs. Making steel isn't all that different from pushing Slurpees at Seven Eleven. Who will move 500 miles to push Slurpees? Labor subsidies for new owners of a Seven Eleven franchise would look absurd. Same goes for manufacturing.

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