Posted on 12/07/2003 2:28:27 AM PST by sarcasm
WASHINGTON - Laid-off factory worker Ruth Schumacher rises before the sun most days and earns $7 an hour tending the breakfast bar at a Holiday Inn in Celina, Ohio. She would like to set out a tip jar for the occasional dollar, but management forbids it.
After work, she occasionally goes next door to shop at Wal-Mart or at Kmart one town away.
"They've got real good bargains," she said of Wal-Mart, echoing a generation of thrifty shoppers.
Never mind that Wal-Mart is a major reason Schumacher no longer has a $12-per-hour job at Huffy Corp.'s bicycle plant. Five years ago, Wal-Mart pressured Huffy to lower the cost of its bikes, so Huffy closed its Celina plant. Schumacher's job and the job her husband held at Huffy eventually ended up in China.
"We can't go out to eat every Friday, Saturday and Sunday like we used to," Bob Schumacher said in a tone suggesting there are worse things. "When you lose a job like that you cut back on everything, that's all. I guess that's life."
Despite the announcement from the private Institute for Supply Management that manufacturing employment grew in November, the factory jobs that have disappeared will not come back, said Richard Berner, chief U.S. economist for Morgan Stanley Dean Witter.
The economic forces that have led U.S. companies to go overseas to manufacture low-end commodities - toys, jeans, towels, computers - are unlikely to change.
"Dauntingly high costs in manufacturing is the key reason why manufacturing employment has been uncharacteristically weak," Berner said. "My guess is manufacturing employment is now stabilizing, and I don't expect rapid job growth."
The past three years have produced manufacturing's worst job recession since the Great Depression:
• Since July 2000, the United States has lost nearly 3 million manufacturing jobs, more than 15 percent of its factory work force.
• In July, Pillowtex Corp., a giant U.S. manufacturer of towels and sheets, announced it was bankrupt and was laying off 7,650 workers in one of the nation's worst one-day textile layoffs ever.
Manufacturers large and small, from jean-makers in California to toy-makers in Kentucky, are lured abroad en masse because it is cheaper to manufacture those goods elsewhere.
Economists predict this trend will continue because so many people benefit. Consumers pay lower prices for retail, Wal-Mart and other discount stores make bigger profits, and CEOs earn fat bonuses.
Even manufacturers who don't flee the relatively high cost of doing business in the United States are likely to rely more and more on technology to produce more with less. That's why manufacturing's portion of the U.S. gross domestic product barely fluctuates, even as factories shut down.
Economy evolves
But as one door closes, another opens. It's the maturation - and growing pains - of a new economy.
By 2010, an additional 22 million jobs will be created in the United States, bringing the total to 168 million, the Department of Labor reports. Nearly 14 million, or three out of every five, will be in service occupations such as home health care, food preparation, child care and transportation.
In a report titled "Tomorrow's Jobs," the Labor Department projects that employment agencies that supply temporary workers - who are frequently excluded from health and retirement benefits - will be among the largest single sources of growth, creating 1.9 million new jobs.
Meanwhile, occupations that require a bachelor's degree and usually offer higher pay and benefits will account for 7.3 million jobs. Of the 50 best-paying jobs listed today by the Labor Department, 48 require at least a college degree. The two exceptions are air traffic controllers and nuclear power reactor operators.
"As bleak as it sounds, we just have to say to our fellow citizens, 'Get a skill, an education, learn a (second) language,'" said economist Richardson. "That is sometimes called tough love."
It's a lesson that Ruth Schumacher, a 64-year-old great-grandmother who never graduated from high school, lives every day.
Her husband earns $9.15 per hour today as a part-time church janitor, about $4 less per hour than he did welding bike rims for Huffy. Together, he and Ruth draw $518 per month in pension money, but their AARP health insurance eats up half of that. All told, their income is enough to get by on and nothing to celebrate.
The lowest skilled
These days, they depend more than ever on low prices at Wal-Mart and other stores.
"The buck stops with the folks with the lowest skills," Richardson said. "These people find themselves now in a world with a whole bunch of other low-skilled folks who are competing with them."
It's the yin and yang of the global economy. As the Schumachers worked last year to stretch every dollar, Wal-Mart, the world's largest retailer, reported $245 billion in sales, $40 billion more than any other U.S. company. American consumers saved tens of billions of dollars on retail, $20 billion just at Wal-Mart, according to market estimates. And CEOs earned about 250 times more than their workers, almost a tenfold increase from the wage gaps of 1965.
On the day after Thanksgiving this year, Wal-Mart posted a single-day sales record of more than $1.52 billion. The company makes no apologies for its market influence.
"We are in business to take care of the customer," spokeswoman Melissa Berryhill said. "We are going to do what we need to do to deliver everyday low prices to our customers, and we are going to go where we have to go in order to do that."
However, Berryhill added, Wal-Mart would "prefer to buy locally whenever viable."
Officials at Huffy declined to comment.
This sounds to me like a propaganda piece for the globalist freetraders. What the above paragraph left out was..."and those new jobs will be at considerably lower pay and benfits (if any) than the jobs lost."
Growing pains of a new economy?? HA! Pure bull. There will be no economy soon. No state has survived, or can survive, on purely a service economy. The ship is sinking and the officers are swimming away to retirement villas overseas.
Holy crap...some real world writing...instead of the continual harangue of pessimism and "blame America" garbage.
In what world, besides pre-school, did societial norms begin to create and/or expect a "Nanny Society" where even employees are expected to be able to have everything all the same all the time?
That alone should save you a bunch of money!
The region I'm living in has welfare rates approaching 40% --- health care is in worse shape with only 33% bothering with private insurance ---- the rest get their health care free from the government. Needless to say, about the only jobs are in health care and education ---- but it's taking massive federal and state bailouts to keep things going. If the bailouts stop rolling in, we're sunk.
I've seen American waitresses and janitors --- but not where I'm living now --- not many because they are being driven out because it's cheaper to hire an immigrant. The immigrants don't expect any job benefits like employer provided insurance because they don't mind the free government insurance. So they're cheaper for the employers but not for the taxpayers.
Of course it means less money spent in restaurants which means that they hire fewer employees. Can you say downward spiral?
Agreed.
Re: No state has survived, or can survive, on purely a service economy.
This statement is based upon the assumtion that the manufacturing sector will no longer exists, and that is just flat out false.
Let me give you some examples.
Affordable information exchange has revolutionized the industry in a fundemental way. 10 years ago, the thought of a team of engineers in another country performing concurrent engineering on a PIM design would have been un do able.
Today, not only can a contractor in Bangladesh log in with a seat of UniGraphics or ProE and view, edit, and post on the same solid model everyone else is working on, but the entire shop floor can have access to the same information. It's cheap, distributable, and real time.
This decentralizes many of the functions that used to be performed only under the same roof on the "Nike Network" of people walking cubicle to cubicle to get questions asked and answered.
So a company hires 2 temp workers for next to nothing, and they may not get that much productivity out of them, but given the low price they're paying, that's ok, and if they're on the other side of the globe, their 3rd shift is your first shift, so your time to market is reduced because your compressing the schedule considerably.
So then the company hires different temp worker from different temp agencies and judges their performance, and eventually finds a few that really are performing with the same quality that they get out of their engineering team in the states, so they add a 3rd, then a 4th, . . .you get the idea.
Then one day, in a conferance call, one of the engineers in bangladesh says "I know a guy in this same industrail park that prototype this part in ____ time for ____ dollars, and they take him up on his offer.
Now they're getting some sample work done over there, so they add yet another temp, then the prototype guy in Bangladesh says he just bought a Trumph laser, a brand new HASS VNC and a Mits EDM, and can can to work in _____ amount of time for ____ dollars, so they try a few and they suck really bad, so they shop that around and . . .anyway
This is exactly the way it's happens with shop owners I know here in the states. It's not a planned thing, there's no mallice in it, it's just a question of keeping quality high, and not being afraid to shop around.
There are others who have sent and entire mold over to China, only to have a dup mold built to run knock-offs of the part to flood the black market, but that's another story.
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