OP-ED | Factory Towns Are Gone, But Manufacturing Is More Vital Than Ever
by Barth Keck | Jul 7, 2017 4:30am
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Posted to: Analysis, Business, Economic Development, Jobs, Manufacturing, Opinion, State Budget, Taxes, Manufacturing Sector
S.L. Price’s book Playing Through the Whistle: Steel, Football, and an American Town is a detailed historical and sociological examination of how business and sports coalesced to mold the town of Aliquippa, Pennsylvania. As I read this fascinating case study, it prompted many personal recollections and caused me to ponder the impact of manufacturing on Connecticut’s economy.
My parents were raised in Nazareth, Pa., a cement-mill town in the Lehigh Valley. Rather than working in the mill and making a good wage right out of high school, my dad broke with tradition and went to college. He wound up in human resources, spending most of his career at two different industrial manufacturers — the Allied Chemical Corporation in Baltimore and the Great Northern Paper Company of Millinocket, Maine.
Neither company exists today because of the challenges and vagaries of industrial America and the global economy.
Such, also, was the fate of Aliquippa’s J & L Steel Company when it merged with Republic Steel in 1984. The proud industrial town that gave the sports world Mike Ditka, Pete Maravich, Darrelle Revis, and a litany of other famous athletes became a sad shadow of its former self as steel mills no longer required the throng of workers common in the industry’s heyday.
“Technology made manpower quaint,” writes Price. “In 1980, it took 399,000 American steelworkers to produce 101 million tons of raw steel; in 2011, 97,000 American steelworkers produced 86.2 million tons. Manufacturing’s share of U.S. Gross Domestic Product is now half — 22.7 percent to 11.9 percent — of what it was in 1970. The remaining ‘blue-collar’ jobs require more education, training, computer skills. The days when a thick accent and a set of calloused hands were enough to find high-paying, secure employment are history.”
And so it goes in Connecticut. U.S. factory jobs declined by almost half from 1979 to 2011, according to Connecticut Manufacturing: Building on the Past, Creating Our Future, and “tens of thousands of factories in the U.S. closed,” including “hundreds in Connecticut.”
The state had 87,000 fewer jobs in the manufacturing sector last year as compared to 1997, according to Patrick Flaherty, assistant director of research and information for the state Department of Labor.
Even so, “there were 160,000 manufacturing jobs in Connecticut in August [of last year],” said Flaherty. “That’s more than the financial services and insurance sectors combined.”
What’s more, the state’s big manufacturers are looking to increase the workforce. Pratt & Whitney announced in September it will add 8,000 jobs over the next decade, while General Dynamics’ Electric Boat Division will expand its Groton and Quonset Point, Rhode Island, locations by 4,500 jobs over the next 15 years.
But the real story of Connecticut manufacturing has less to do with the big firms and more to do with smaller “advanced manufacturing companies,” explained Connecticut Manufacturing, a joint report of economist Don Klepper-Smith of DataCore Partners and the Connecticut Business & Industry Association. “Advanced manufacturing in Connecticut is high precision, high-productivity, high-skilled, and high valued-added. It is the state’s greatest source of exports, a major producer of high-paying jobs, and a significant multiplier of economic activity across other sectors.”
Jerry Clupper, executive director of the New Haven Manufacturers Association, told me that these smaller manufacturers are part of an essential “supply chain” for bigger firms. “These companies are typically in industrial parks, but people don’t generally recognize them as manufacturing firms.”
Clupper added: “Most of what we read in the news about manufacturing has to do with the total number of people employed as opposed to the value it adds to the economy. Manufacturing has the highest multiplier effect — each job in manufacturing produces three additional jobs [elsewhere].”
Rather than decrying the disappearance of big factories, then, Connecticut should encourage this leaner and smarter manufacturing model. To that end, that state has already invested $60 million through a Manufacturing Innovation Fund. But more must be done.
Connecticut’s manufacturers require improved infrastructure for the transportation of goods, more “experiential education” to link schooling and work skills, and a stable state budget. Indeed, seemingly simple strategies — like enlightened tax policy — would go a long way toward improving the economy, thereby lessening the budget woes.
“Policymakers fail to realize that many of Connecticut’s small and midsize manufacturers are S corporations, which means their business taxes are paid through the personal income tax,” wrote Klepper-Smith. “Consequently, when the state raises the personal income tax, thousands of small businesses — many of which are manufacturers — feel the impact.”
In plain language, Connecticut has transcended the era of “the company town” — the Aliquippas and the Millinockets — where one big factory is the primary economic engine. Instead, we have scores of little engines that, given more prominence and incentive, could help power the entire state’s economy.
“We do well at informing people about toothpaste and cars,” said Clupper, “but not about the things that really help people — like manufacturing.”
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