In These Times, a ‘social justice’ type publication, has written an article about perma-temps (employees hired on short-term / temporary contracts that can be renewed indefinitely). This hiring strategy has been getting a lot of media coverage all over the country during this past year. This is a very emotive issue for people on both sides of the debate and I don’t want to get into an off-topic discussion on the pros or cons of this practice. Nor do I wish to push my point of view. I do however want to draw attention to the In These Times article in particular. I believe it unfairly targets Glock. I want to address two points.
1. The article claims Glock is effectively subsidized by government (Federal, State and Local governments). The author wrote …
Either way, public money is subsidizing these jobs. And that means the government should have some leverage over employment practices.
2. Glock would not be paying low wages if it wasn’t for the government subsidizing the company. The author wrote …
It’s not enough that companies are widening profit margins on the backs of low-paid temps—in some cases, taxpayers are helping them do it.
3. Glock pays experienced machinists $10/hour while they are paid almost twice that by other companies in Georgia. The author wrote …
Glock lists six separate staffing agencies through which one can apply for a manufacturing or warehouse job. One of the agencies, Automation, recently posted a skilled machinist position on its website for an (unnamed) gun manufacturing company in Smyrna. The listing called for an array of skills:
Applicants must have experience operating the robotic machine, must be mechanically inclined, must have metal working experience. Applicants must also be able to read specs and be technically skilled.
Applicants would also have to be extremely flexible: “This position rotates weekly between 1st and 2nd shift (this is a requirement),” meaning day and evening shifts. And the wages on offer for all those skills and flexibility? “$10 hour to start, but depending on experience, may go up to $13.” According to the BLS, the mean hourly wage for a machinist last year was $19.65.
To address the first point: Glock rose to prominence by producing a next-generation handgun that was lightweight, reliable and held 17 rounds of 9mm ammunition at a time when many Police departments were still using revolvers. Today they face stiff competition from companies such as Beretta and S&W. Law Enforcement organizations tend to choose their guns for a number of reasons (price, reliability and safety, after sales support). Glock competes to get contracts, they do not receive subsidies.
Regarding the second point: In These Times claims it is the government that allows Glock to pay low wages. From an economic / business point of view this is a crazy argument. Subsidies allow companies to pay higher wages because they have a guaranteed profit and are protected from competition.
The truth is that if Glock was not forced to own a factory in the USA they would not have one. The Government (at Federal and other levels) forces Glock to manufacture their guns in the USA. Mr. Glock would probably prefer if his guns were made in Austria or by the much cheaper Glock workforce in the Philippines.
The reason Glock, and other European gun makers, have factories in the USA is because of two reasons. The first is that many government departments are required to Buy American. The second is that the BATFE prohibits many types of guns (non-Sporting guns) to be imported into the USA for sale to civilians. The upcoming .380 sub-compact Glock 42 was designed to be made in the USA specifically because they were not allowed to import it and sell the .380 sub-compact Glock 25 to civilians.
Regarding the third point: I find it hard to believe that Glock feels the need to add “must have metal working experience” to an advertisement for a skilled machinist. That is like posting a job for a Skilled Computer Programmer and saying “Must have three years experience programming.” and then adding “Must have worked with computers before.”. I believe the job mentioned in the In These Times article is an entry level job machine operator job.
The median wage for CNC machine operators in Georgia is $16.52/hour (meaning 50% of workers are earning less than that). The median wage for CNC Machine Programmers in Georgia $19.03 (close to the the average machinist wage claimed in the article). The median wage for metal cutting and pressing machine operators in Georgia is $13.79 (in line with the advertisement Glock’s employment agent published).
So in conclusion, In These Times is unfairly targeting Glock. Government rules and regulations force Glock to employ people in the USA (at the expense of Austrian workers). They probably employ them at a fair rate comparable to other local firms. They are not in any was subsidized by the government. The In These Times journalist is economically illiterate and understands little about the gun industry.