Politics Vs. Economics

I urge you to read back to back two insightful recent columns on the elections. The first from the New York Times’ David Brooks is on the role blue collar households played in the Republican landslide, particularly in the Midwest. The second is from Rick Haglund for mlive.com on a new study from the Chicago Fed on the 60 year decline of factory jobs in America.

The two together define the core political challenge we face here in Michigan and across the country in making the inevitable transition to a knowledge-based economy. Voters want their old jobs back at the old pay. But elected officials – no matter their party or ideology – can’t do that. Most of those jobs are gone forever. And the factory jobs that will remain will not pay as well and will require higher skills.

It’s not politics that are destroying factory jobs. It’s the mega forces globalization and technology. And, as Federal Reserve Bank of Chicago senior economist Bill Strauss reports, consumers wanting more services and less manufactured products. The result: factory work was 31% of the jobs in America in 1950, it is 9% today. Six decades of continuous decline, no matter who was in power in Lansing or Washington.

But as Brooks writes working class households – quite understandably – don’t want to hear/accept that those jobs are gone forever. They are holding both parties accountable for delivering middle class blue collar jobs. So they vote out the Rs in 2006 and 2008 and then slaughter the Ds in 2010. That more than likely means a politics – from both parties – here and across the country focused on trying to restore an economy that can’t be restored. Pretty discouraging, but reality.

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Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

This Post Has 2 Comments

  1. Lou,

    I agree that these articles tell an important story about the mismatch between economic trends and working-class voters’ expectations. As Democrats wrestle with how to re-tool policies and messages to regain the loyalty of working and middle class voters, it would be helpful to have a fact-based discussion about outsourcing and the extent to which state or federal policies enable it or can stop it. This issue and immigration are often the subject of Democratic messaging that implies that if we somehow “address” these concerns high-paying blue collar jobs will return. The election results suggest that voters weren’t buying that message or at least didn’t believe that Democratic candidates could tackle these issues. Absent clear data and arguments to the contrary, however, I’m afraid progressives will continue to flog the symptom of outsourcing and the scapegoat of illegal immigrants instead of developing policy and messages that engage the underlying problem, which is the mismatch between Michigan’s assets and the needs of the global information-led economy.

    1. Jim, You raise all the right questions. The challenge is if our analysis is right – and as the Chicago Fed wrote there is six decades of data that says we are – there are no levers available to policy makers – including limiting offshoring and immigration – that can change the basic fact that the economy needs fewer factory workers. Just like a century ago no matter what policy makers did we went from 50% farm workers to less than 2%. Voters may not want to accept that reality and until they do policy makers of both parties will try to turn the clock back, but it almost certainly won’t work. I’m willing to work with folks on developing an “increase blue collar jobs” agenda. But almost certainly they will be lower paid jobs and not a lot of them. The economy increasingly needs knowledge workers (high pay) and service workers (low pay). Not great, but reality. Lou

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