Nostalgia for manufacturing won’t bring better jobs for UK workers - Financial Times

Everyone loves manufacturing jobs. In the US, a fondness for factories is something President Joe Biden shares with his predecessor Donald Trump. “I don’t buy for one second that the vitality of American manufacturing is a thing of the past,” Biden said in January as he signed an executive order to encourage more federal government purchases of American-made goods. In the UK, the ruling Conservative party is drawn to the idea that new factory jobs in struggling areas could reduce geographical inequality.

A new report from centre-right UK think-tank Onward sums up the argument: manufacturing is a high-productivity sector that creates good jobs with decent pay for people without degrees, for whom alternative options are often low-paid work in the service sector. It’s certainly true that many of the places which lost swaths of manufacturing jobs in recent decades have suffered deep social and economic damage. But is it feasible to bring the jobs back?

Manufacturing in rich countries is highly productive because automation and the offshoring of labour-intensive processes mean the sector now needs fewer people to make the same volume of goods. I once interviewed a young man who had left a job at a seatbelt factory due to boredom. “It was literally just sitting at a chair and every couple of minutes you push a button or two,” he said. The idea of “deindustrialisation” in the rich world isn’t quite right: manufacturing output in countries like the US and UK has held up even as manufacturing employment has declined.

Jeegar Kakkad, an economist at the Tony Blair Institute who has worked for Jaguar Land Rover and MakeUK, the manufacturers’ association, says new manufacturing ventures in countries like the UK tend to be capital intensive without creating many jobs. “Do you want to increase the jobs if the jobs that are coming back are the lower-skilled, lower-productivity end?” he asks. “We don’t want to be competing on labour costs, that’s a precarious position in global value chains and that shouldn’t be the ambition for workers.”

There are economic forces that could trigger demand for more manufacturing in rich countries, from green energy projects to certain consumer goods that benefit from super short supply chains. Policymakers can “swing behind” those trends, as Kakkad puts it, but they shouldn’t expect them to create large numbers of jobs for people with few qualifications, let alone in precisely the areas they would choose.

If you use subsidies or other inducements to persuade companies to put factories in certain places, their shallow roots mean they are vulnerable to closing again if they don’t prove efficient enough. Within big companies, different factory locations are often in competition with each other, with workers well aware of internal “league tables”.

In Glasgow, a McVitie’s biscuit factory is set to close soon with the loss of 500 jobs, in spite of various efforts to save it. There is still demand for McVitie’s biscuits, but owner Pladis Global says it has excess production capacity across its seven UK sites. Scottish Enterprise, a development agency, had given the company £808,000 of “Training Aid funding” in 2014 to allow for “the upskilling of staff at Tollcross, resulting in 485 jobs being safeguarded” (Pladis said “all conditions of that award have been met.”) The agency gave the company a further £193,000 in 2016/17 to support a project to bring the Nibbles brand to Glasgow from Turkey.

A more durable strategy to help lower-paid workers and their local economies would be to turn the proliferating number of “bad jobs” in sectors like care and warehousing into “good jobs”. After all, manufacturing jobs were bad jobs once too. In the 1930s, the Auto Workers News described how the men leaving a Ford car plant in the US were so exhausted by the pace of the assembly lines that they would fall asleep within minutes of boarding the trolley cars, even on their feet. Industrial accidents were so rife in manufacturing hub Detroit that novelist Erskine Caldwell called it the “eight-finger city”. These jobs became decent because workers (with the help of supportive governments) fought for better conditions, benefits and a bigger share of the productivity gains.

It’s misleading to say today’s service sector jobs lack the scope for productivity growth that could sustain better pay and conditions. A few years ago, order pickers in Amazon warehouses picked about 100 items an hour. Now, with robots bringing the shelves to them, they pick 300 to 400 items an hour.

The nostalgia for manufacturing jobs is understandable but unimaginative. We can’t reverse history, but we can learn from it.

sarah.oconnor@ft.com

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