Producing Poverty


Over a third of non-supervisory US factory workers hired by temporary staffing agencies results in them or their family members receiving help from one or more public assistance programs, according to a new report from the University of California, Berkeley’s Center for Labor Research and Education. “Producing Poverty: The Public Cost of Low-Wage Production Jobs in Manufacturing” reveals that federal and state taxpayers funded the cost of roughly $10.2 billion of annual spending for these public aid programs from 2009 to 2013.

The report analyzed data from five large public benefit programs. They are: Medicaid, the Children’s Health Insurance Program, the Federal Earned Income Tax Credit, food stamps (the Supplemental Nutrition Assistance Program), and basic household income assistance (Temporary Assistance for Needy Families).

Factory firms have increased the number of low-wage temp jobs nine-fold over the past 25 years, from 1% of hires to 9%. Assemblers and fabricators are the two biggest occupational categories of workers hired through temp agencies, with a median wage of $10.88 an hour versus $15.03 for co-workers that manufacturers hire.

The pay gap between the two forms of hiring extends to employment benefits, according to Ken Jacobs, chair of the Labor Center who co-authored the report. Temp staffing agencies hire one in 11 production workers in manufacturing currently, and half are or have a family member on public assistance, he said. “That’s very close to what we see for fast food workers.”

Jobs outside of manufacturing can be good jobs, according to Jacobs. “That requires better labor standards, a higher minimum wage and greater levels of unionization,” he said.

National activism to raise the minimum wage and form a union, the “Fight for $15” movement, is pushing the envelope in this direction, according to him.

Overall, a decline in pay for factory manufacturing jobs means that they resemble the low-wage work in the fast food industry and at mega-retailers such as Walmart. What does all this mean?

“Manufacturing jobs are not good jobs because there is something inherently good,” Jacobs said. “They were good jobs because they were union jobs. As union density, e.g., proportion of paid workers who are union members, in manufacturing has declined so has job quality.”

According to the report, “recent research by the National Employment Law Project (NELP) found that manufacturing production wages now rank in the bottom half of all jobs in the United States.”

Eight of the 10 states where workers and their family members are most likely to receive public assistance are in the American South, home of so-called right-to-work (for low wages) states. “Mississippi has the highest participation rate, at 59 percent,” according to the report.

How are the ranks of the working poor growing? One contributing policy factor of note is the $1.3 billion public subsidy to the Nissan Corp. for building an auto plant in Canton, Miss., where 20% of the workforce are temp hires, according to Jacobs, citing a report from the Good Jobs First organization.

The other two states of the 10 where public assistance programs are most likely to help manufacturing workers and their families are California and New York. Both are Democratic Party strongholds.

UC Berkeley’s Center for Labor Research and Education’s new report is at <>.

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email

From The Progressive Populist, June 15, 2016

Blog | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2016 The Progressive Populist

PO Box 819, Manchaca TX 78652