Before starting my latest tirade about how both white and blue color workers’ belief that their wages should be constantly going up in today’s labor market is not realistic, I would like to reestablish my credentials.
Before becoming a Technical Recruiter at Discovery Personnel, Inc., I worked primarily as an engineer manager in the Medical Industry for 25 years. I have an MBA from the University of Dayton and a BS ME from Purdue. I have now been a technical recruiter for over 10 years, recruiting primarily for the Plastics Industry. During most of my career, conventional wisdom said that every time an engineer or manager changed jobs, he or she should get a 10 to 20 percent increase in salary and that held pretty much true during my career.
In my second career, as a Technical Recruiter, I have seen major shifts in the labor market due to globalization. The percent loss of jobs in the Plastics and Rubber Industry alone from 1995 through 2005 is about 12%. Source: Bureau of Labor Statistics, in Der Spiegel Spec. Int. Ed. 7, 2005. I am sure the job loss percentage in the plastics industry has increased even more over the last couple of years.
Obviously, The Boss (a.k.a. Bruce Springsteen) is just as correct today as he was in 1985 when he sang about the steel mills, “The foreman says these jobs are going boys and they ain’t coming back.” Assuming The Boss is correct, and who I am I to argue with The Boss, why do a large percentage of the downsized plastic industry job seekers expect a salary, or hourly rate, increase when looking for a new job?
I am currently reading The Entrepreneurial Society, By David B. Audretsch. On page 87, Mr. Audretsch states:
Perhaps the iron law of globalization will inevitably force wages down in the developed countries toward the lowest common denominator found on the globe. Certainly, if you ask the textile worker or auto workers in the United States who are still lucky enough to to have jobs, they will no doubt enthusiastically endorse the validity, if not virtue of the iron law of globalization. Their wages, in real terms, have been diminishing steadily for decades now.
It should be pointed out theat David B. Audretsch is an award winning economist and a director at the Max Planck Institute of Economics in Germany and professor at Indiana University. Who am I to argue with David Audretsch?
Why then do I upset injection molding machine set up technicians when I tell them they are more likely to see a pay decrease, instead of an increase, when they get their next job? Most people like to believe they are special, and some are, but most are not and I believe that is one reason they have unrealistic expectations. Another reason is that in a society where people are taught to believe they should see the glass is half full instead of half empty, many people have trouble facing reality.
A small percentage of job seekers will actually see increases in their salaries because of their education that makes them a rarer commodity. Companies are lining up to hire graduates from colleges that train plastics or polymer engineers. They are in demand because so few students today want to work in manufacturing. Why work hard in manufacturing when you can make ten times as much money managing a hedge fund? but, as usual, I digress. Unfortunately, these individuals are few a far between.
Plastics engineers, who have worked for one of the automotive suppliers for twenty years and do not have a degree are going to make less money, not more when they are downsized or they are going to remain unemployed. This just a cold hard fact. The reason engineers are being downsized is because globalization has made it difficult, if not impossible, to compete effectively, and a new employer will almost be forced to offer less money.
Skilled laborers, such as machinists, are finding the job loss/pay reduction even more difficult to accept. Machinists are very intelligent people who once had very rare skills. Fifteen years ago, I remember seeing big signs in front of machine shops offering signing bonuses and vacations along with the potential to reach a six figure salary with overtime. Those days a long gone when a machinist in China or India is being paid one tenth as much (China and India are now outsourcing work to countries with even lower wage rates). Most machinists I talk with conceptually understand the effects of globalization but they still refuse to work for lower wages believing something will change or the government will help them. Unfortunately there is little the government can do except offer retraining or the extension of unemployment insurance payments.
I say all of this to implore job seekers not to kill the messenger when the poor Technical Recruiter has to provide a reality check. If you have been downsized, there may be a job out there for you but probably not paying what you are use to making and it is only going to get worse.
Brains not brawn will be required to achieve an acceptable standard of living in the future, in the developed countries. Good luck, or God speed, because most of us are going to need it.