University of Wyoming energy economics professor Timothy Considine believes all jobs are not created equal.
Considine, who has studied the metals and mining sector, said communities could fawn over manufacturing enterprises, especially those in steel, because of the large ripple effects that can be felt throughout the regional and national economy.
Considine said each of the 150,700 jobs directly in the domestic steel industry has a multiplier effect of 6.8. Put a different way, activities by a single worker in a melt shop at NLMK in Portage help provide for nearly seven other jobs.
The multiplier effect starts with the direct purchases the industry makes in its usage of energy, materials and machinery. Considine also said in his report released last year that the American steel industry employed more than 139,000 workers and contributed $17.5 billion in value-added or gross domestic product in 2010.
“Without manufacturing, this country is doomed to be a second-class nation,” said Roy Berlin, president of Hammond-based steel service center Berlin Metals.
Manufacturing earnings needed
Considine said manufacturing jobs are important because their compensation is a lot higher on average than service-sector jobs.
The average hourly manufacturing sector wage was $24.11 in February, which was 20 cents higher per hour than the national average. But that differential between the two used to be a lot more. And according to the most recent data available, the mean wage of $23.58 an hour at iron production facilities and steel mills is lower than the national average.
Areas like Northwest Indiana with a strong union presence tend to have above-average manufacturing wages.
But, United Steelworkers District 7 Director Jim Robinson said he worries about workers sliding down the economic scale, especially as domestic companies seek ways to lower labor costs. District 7 is composed of 85,000 members in Indiana and Illinois.
The Brookings Institution’s Metropolitan Policy Program said inflation-adjusted hourly wages in manufacturing fell between December 2009 and September 2011, even as the American economy added manufacturing jobs. Sector employment has yet to return to prerecession levels, and wages in the sector also declined more rapidly than wages in the private sector.
Robinson said the jobs of production workers, supervisors and managers at steel enterprises and others in manufacturing helped build and define the middle class throughout the 20th century. And it has been a rocky ride in Northwest Indiana. As the nation went to war, churned out cars and trucks and built roads and bridges, people in the region went to work in the mills.
But the loss of jobs and wealth in Northwest Indiana with the decline in manufacturing activity in the 1970s was hard to fathom for many area leaders. U.S. Rep. Pete Visclosky, D-Merrillville, said Lake and Porter counties lost 38,000 jobs in the steel industry between 1977 and 1987.
Berlin of Berlin Metals was exposed to the steel industry as a youth because his father owned a steel company. In the second grade for show-and-tell in school, he brought a micrometer — a device used to measure steel thickness — while his peers brought toys and other children’s gadgets.
Berlin has been in the steel industry for 25 years. But as a baby boomer, he said it’s important for young workers to be inspired by careers in the industry.
Many steel mills have to do succession planning because of slated retirements within the next decade. If steel industry businesses aren’t doing succession planning now, they should be, Berlin said.
“For the new younger crowd coming up, there’s a great opportunity, because ... there’s going to be a lot of transition over the next 10, 15, 20 years,” Berlin said.
Visclosky said younger workers have to be prepared to enter workforces that aren’t as large as they used to be. He said they should also plan to pursue a college or trade education after high school.