Seems to me that the growth in service industry jobs might help erode job quality. Even though construction wages may be lower than manufacturing Macjobs a probably less than half the wages per hour of construction jobs. Weir is right that construction jobs tend to be temporary and move from area to area but nowadays manufacturing jobs may b e temporary too!
Manufacturing and Construction
Posted by Erin Weir under labour market, free trade.
June 26th, 2007
Recent commentaries from CIBC and Export Development Canada argue that the manufacturing crisis is not eroding job quality. Both note that a surge in construction employment, added to the relatively few new jobs in non-renewable resource extraction, nearly equals the number of manufacturing jobs lost in recent years.
As emphasized on the front page of yesterday’s Financial Post, this argument contradicts what the Canadian Labour Congress has been saying. It also contradicts a previous CIBC study that linked an overall decline in job quality to reduced manufacturing employment.
The more recent CIBC document and Export Development Canada’s document overlook a critical fact: average hourly wages (for hourly-paid employees) are more than 10% higher in manufacturing than in construction. Including overtime, manufacturing paid $23.61/hour and construction paid $21.20/hour in May 2007. Excluding overtime, these figures were $22.90 and $20.46 respectively.
Certainly, increased construction employment is good news. The building-trades unions, supported by the labour movement in general, are working to improve construction wages. However, the fact remains that replacing manufacturing jobs with construction jobs tends to reduce average wages.
Another important difference is that, whereas manufacturing employment is rooted in particular communities, construction employment is temporary because it is tied to particular projects. Construction and non-renewable resources are notoriously volatile. Canada’s current position at or near a cyclical peak in these sectors does not compensate for the underlying loss of stable manufacturing jobs.
One must also ask why Export Development Canada would seek to downplay the manufacturing crisis. Could it be because the federal government is currently negotiating a “free trade” agreement with Korea that would eliminate even more Canadian manufacturing jobs?
The loss of jobs in manufacturing, an industry heavily engaged in international trade, reflects poorly on Canadian trade policy. It seems odd that Export Development Canada’s countervailing success story is construction, the classic non-tradeable industry.