The Gray Lady Agrees: Southern Workers Are Cheaper Than China's
By Harold Meyerson | Aug 03, 2015
Today’s New York Times features a front-page story on Chinese textile firms opening new factories not in China but in the American South. With the steep rise in the wages of Chinese workers and the stagnation (at best) of the wages of American workers—Southern workers most particularly—and with the higher levels of productivity and lower energy costs that U.S. factories enjoy, it actually is cheaper to manufacture in Dixie than it is in Guandong.
The Times article echoes my piece in the current issue of the Prospect, in which German union leaders on the boards of that nation’s auto and aerospace manufacturers stated that it was cheaper for their companies to operate low-wage assembly plants in the South than it was in China. What the Times piece doesn’t echo is the thesis of my article: that low Southern wages have had the effect of bringing down wage levels across the nation, both in manufacturing and in retail (for which Walmart’s move north, while maintaining Southern wage levels, is largely responsible).
There’s nothing wrong in the Times piece not looking at the macroeconomic consequences of the story it documents; that would entail writing and editing an entirely different article. Where the Times piece fails on its own terms, however, is in omitting any reporting on the wages paid to the workers in the Chinese-owned factory in South Carolina that is the subject of the article. The piece does report that local residents are “desperate for work, even at depressed wages,” but it neglects to specify with a dollar figure just how depressed those wages are. It does cite the national average for manufacturing wages, but that’s an average that runs from, say, skilled operators of sophisticated machinery at Boeing’s plant in Seattle to, it’s probably safe to assume, workers like the employees at the South Carolina textile factory that is the subject of the Times piece.
The article further omits the fact that South Carolina is one of five states never to have passed a minimum-wage statute, or that the rate of unionization there is 2.2 percent—the second-lowest in the nation. It omits the nationwide effects of low Southern manufacturing wages—one of a number of factors that contributed to the 4.4 percent decline in the median U.S. manufacturing wage between 2003 and 2013, and a leading factor in the decline of the hourly wage differential between all Midwestern and Southern workers (not just those in manufacturing) from $7 to $3.34 between 2008 and 2011, according to Moody’s Analytics.
Still, missing the broader implications of its own story is one thing. Missing the key fact of what the workers’ pay is in the very factory the piece reports on is something else—particularly at a moment when the Times is increasingly running stories on the stagnant or declining wage levels of the vast majority of American workers. Don’t the reporter and editors who worked on this otherwise commendable story ever read the Times?