As
several of the economists that we’ve read have predicted, we are now seeing the
return to American competitiveness. This is occurring in part because of rising
wages in China, but also because American companies that pursued outsourcing
are now reevaluating the bases of those decisions. As Charles Fishman of The Atlantic reports,
industry is returning, as demonstrated by General Electric’s (GE) recent
domestic projects. What Fishman fails to address, however, is what this really
means for the future of American labor.
Fishman’s
article centers on Appliance Park, Louisville, Kentucky, General Electric’s flagship
production facility. Appliance Park endured a dramatic decline in employment
from the 1990s to today. Seeking lower labor costs, GE looked to oversees
production. But now, GE’s CEO is reversing course. He is now reinvesting in
Appliance Park, and bringing manufacturing back to the United States, simply
because he views this move as a good business decision.
The
author admits that this phenomenon is currently fairly unique to GE. Overall
statistics still show manufacturing in decline in the United States. But GE is
confident with its decision. Seeing rising shipping costs, rising Chinese
wages, and continuously high US labor productivity (outpacing wages), GE
believes that more companies will follow it in the future, bringing jobs back
to the United States.
Fishman
acknowledges that one of the driving forces of recent insourcing is a re-born
American labor environment in which unions more easily accept wage concessions.
Beaten down by the threat and effects of outsourcing, American unions are now
significantly weaker. But the author is very optimistic that, despite a weaker
labor movement, business will continue to create better workplaces. As he
writes, “Management, more keenly aware of offshoring’s perils, is also trying
to create a different (and better) factory environment. Hourly employees
increasingly participate in workplace decision making in ways that are more
like what you find in white-collar technology companies.”
But
GE has a long history of refusing to compromise on any labor demands. In fact, during the mid-twentieth century, GE
pioneered a practice of positive anti-unionism, providing all employees with
political education on the problems of unionization. Historian Kim
Phillips-Fein details GE’s strategy in a chapter titled, “How to Break a Union”
in her book, Invisible Hands: The Making
of the Conservative Movement from Roosevelt to Reagan. Phillips-Fein
exposes GE’s deliberate attempts to keep unions out of their factories, by
taking a very proactive stance against unionization. In her assessment, the
company and the professionals that it hired to keep labor out made
anti-unionism seem both moral and flashy. These tactics spread throughout
American business, helping to weaken the labor movement on a national scale.
One
of the tactics that GE adopted during this phase was to enhance workplace conditions
in order to weaken the claims of labor. But the company only made this changes
when pressured to do so through the threat of unionization. Fishman, in his Atlantic article, expresses optimism
that GE will continue to adopt improvements to the workplace today, despite
what he characterizes as a “more flexible” labor movement. This seems hopeful
if not naïve.
That
GE is moving jobs back to the United States is great news for those currently
unemployed and underemployed. Perhaps manufacturing will make a comeback in the
United States. But as a staunch supporter of the labor movement, I fear that
having GE at the helm for this return is not a good sign for enhanced labor
autonomy. One of the main reasons that the company is returning is that
American labor has been severely weakened in the decades since outsourcing
began. The company undoubtedly seeks to take advantage of these conditions.
