Posted on 01/02/2006 4:19:44 AM PST by ventana
AP Middle-Class Job Losses Batter Workforce Sunday January 1, 8:53 pm ET By Kathy Barks Hoffman, Associated Press Writer Middle-Class Job Losses Batter Workforce As Companies Slash Payrolls, Send Jobs Overseas
LANSING, Mich. (AP) -- Thirty years ago, Dan Fairbanks looked at the jobs he could get with his college degree and what he could make working the line at General Motors Corp., and decided the GM job looked better.
He still thinks he made the right choice. But with GM planning to end production of the Chevrolet SSR and shut down the Lansing Craft Centre where he works sometime in mid-2006, Fairbanks faces an uncertain future.
"Back when I hired in at General Motors 30 years ago, it seemed like a good, secure job," said Fairbanks, president since June of UAW Local 1618. Since then, "I've seen good times and I've seen bad times. This qualifies as a bad time, in more ways than one."
Many of the country's manufacturing workers are caught in a worldwide economic shift that is forcing companies to slash payrolls or send jobs elsewhere, leaving workers to wonder if their way of life is disappearing.
The trend in the manufacturing sector toward lower pay, fewer benefits and fewer jobs is alarming many of them.
"They end up paying more of their health care and they end up with lousier pensions -- if they keep one at all," says Michigan AFL-CIO President Mark Gaffney. As wages and benefits drop, "it's the working class that's paying the price."
West Virginia steelworkers are all too familiar with the problem. The former Weirton Steel Corp., which 20 years ago had some 13,000 employees, today has just 1,300 union workers left on the job.
The steel mill has changed hands twice in two years, and just last month, Mittal Steel Co. told the Independent Steelworkers Union it would permanently cut the jobs of 800 people who'd been laid off since summer.
Larry Keister, 50, of Weirton, W.Va., has 31 years in the mill that his father and brothers all joined. His son tried, but got laid off quickly.
"I'm too old to go back to school. I've worked there all my life," says Keister, who drives a buggy in the tin mill. "I went there straight out of high school. It's all I know."
Though Keister is safe for now from layoffs, he wonders what will happen to the hundreds of friends and co-workers who will be jobless by the end of January.M
Gary Colflesh, 56, of Bloomingdale, Ohio, said there are few jobs in nearby Ohio or Pennsylvania for workers to move to.
"They're destroying the working class. Why can't people see this?" asked the 38-year veteran. "Anybody who works in manufacturing has no future in this country, unless you want to work for wages they get in China."
Abby Abdo, 52, of Weirton, said workers once believed that if they accepted pay cuts and shunned strikes, they would keep their jobs. Not anymore.
"Once they get what they want, they kick us to the curb," he said. "There's no guarantee anymore. No pensions. No health care. No job security. We have none of those things anymore."
Fairbanks of the Lansing GM plant said the changes are going to force a lot of people to retrench to deal with the new economic reality. For some, it will make it harder to send their children to college or be able to retire when they want. For others, it will mean giving up some of the trappings a comfortable income can bring.
"You're going to see lake property, you're going to see boats, you're going to see motorcycles hit the market," he said. "People get rid of the toys."
Economists agree the outlook is changing for workers who moved from high school to good-paying factory jobs two and three decades ago, or for those seeking that lifestyle now.
"It was possible for people with a high school education to get a job that paid $75,000 to $100,000 and six weeks of paid vacation. Those jobs are disappearing," says Patrick Anderson of Anderson Economic Group in East Lansing, Mich. "The ... low-skill, upper-middle-class way of life is in danger."
General Motors Corp. has announced that it plans to cut 30,000 hourly jobs by 2008. Ford Motor Co. is scheduled to announce plant closings and layoffs in January that could affect at least 15,000 workers in the United States and Mexico, analysts say, and is cutting thousands from its white-collar work force.
GM and Ford have won concessions from the United Auto Workers that will require active and retired workers to pick up more of their health care costs, and DaimlerChrysler AG is seeking similar concessions.
Thomas Klier, senior economist with the Federal Reserve Bank of Chicago, says the transition for manufacturers toward leaner, lower-cost operations has been going on for some time. But the bankruptcy of the nation's largest auto supplier, Delphi Corp., pushed the issue into the headlines.
Its 34,000 hourly U.S. workers could see their pay cut from $27 an hour to less than half of that, although the company is still trying to work out a compromise unions will support. Workers also could have to pay health care deductibles for the first time and lose their dental and vision care coverage.
Delphi worker Michael Balls of Saginaw, Mich., hears the argument that U.S. companies' costs are too high to compete with plants that pay workers less overseas, but he doesn't buy it.
"I think if Delphi wins, they lose," he says. "If I'm making $9 an hour, I'm not making enough to buy vehicles."
Unfortunately for workers like Balls, the old rules no longer apply in the new global economy, says John Austin, a senior fellow with the Washington-based Brookings Institute.
"We're in a different ball game now," Austin says. "We're going to be shedding a lot of the low-education manufacturing jobs."
Some of those workers are likely to try to move into the growing service sector, Austin says. But he says the transition can be tough, even if the jobs pay as well as the ones they had -- and many don't.
"Pointing out a medical technician job is available if they go back and get a certificate doesn't solve the issue today for those 45-year-olds who are losing their jobs at Delphi," he said.
Dick Posthumus, a partner in an office furniture system manufacturing company in Grand Rapids, Mich., says that "basic, unskilled manufacturing is going to be done in China, India, places like that because we are in a global world, and there's nothing anyone can do about that."
His company, Compatico Inc., buys much of its basic parts from South Korea, Taiwan, Canada and China, where Posthumus has toured plants he says rival modern manufacturing plants in the U.S. But the company still saves its sophisticated parts-making and assembly for its Michigan plant.
"The manufacturing of tomorrow is going to look somewhat different from the manufacturing of yesterday," Posthumus says. "It doesn't mean that we no longer manufacture ... (But) it's going to be a painful adjustment."
Associated Press Writer Vicki Smith in Morgantown, W.Va., contributed to this story.
"Japanese car plants are mostly just assembly...The parts mostly come from Japan...As well as replacement parts..."
Don't forget all the tooling, machines to run that tooling, and all the engineering and design work
Don't know what business you're in. Maybe your customer will decide one day that he do what you do for cheaper--be it offshoring or an immigrant. Then I guess it will be your tough luck.
Best of luck in the Phillipines. Hope you don't get taken hostage, shaken down by the "authorities", killed by Marxist/Islamist rebels, or get the clap from the local girls. In the end, you get what you pay for.
I trust nothing that comes out of the mouth of a union boss.
I have enjoyed reading your posts on this thread, and for the most part, I agree with you. It is amazing to me that many on FR would cheerfully replace our badly broken tax system with a national sales tax scheme that, in my opinion, will lead either to massive economic dislocation or a black market -- the the inevitable draconian response by government -- but WILL NOT even consider using tried-and-true tariffs to finance government.
I scoffed at NAFTA when the "economists" claimed that bringing jobs to third world countries would create a new class of consumers who just couldn't wait to scarf up American products. Well, I think we all know how that worked out.
However, I do suggest that economics, like politics, is local. I see from your profile that you live in Indiana, and from what I hear, that state is indeed having hard times now. You seem very articulate and skilled; how tough would it be to relocate to a place where you could get a better reward for your work? I realize that it would be tough to leave familiar surroundings, but how tough compared to what all of our ancestors went through?
Here's the problem with a service business: when you stop performing services, the income stops. If you have mining, or farming, or manufacturing, you can hire the productive work and the income continues on.
For example, how much better off is the guy or gal who makes $ 175,000 in dividends and interest ( or other passive income ) than the lawyer or physician who works every day to earn an equal income? When the lawyer or physician takes a month off the income stops.
Labor unions didn't cause anything to do with offshoring. Offshoring is it's own benefit regardless of wage rate at any level in this country. And no matter how hard you guys try, you can't blame the unions for companies going to countries for .37 an hour labor. The cheapest legal rate in the country is 5.53 an hour and that cannot compete with China. That tells you that the high end has nothing to do with it. It also tells US how stupid YOU think we all are. Nobody in their right mind can say that 5.53, much less anything above it, can compete against .37 an hour. It's no contest, yet you intend to tell us all it's fair in some way only arrived at by new math as transubstantiated into another dimensional reality by the treason lobby. And it's the unions' fault..
Did the companies or did they not enter into a bargaining session at each step with the unions in signing a contract.
Simple yes or no. The answer is yes, they did. And that is how this market has worked and not just with Unions. Labor in this country has done so well by business that business has had to do well by employees to get and keep them - historically speaking. But, ethics recently went out the window en masse and the deck was rigged against the worker end of the equation. Supply and demand was dealing business a tougher hand than it wanted, so politicians broke it and sold out the American worker for Corporate interests. It's no more or less complicated than that. It plays into the hands of the globalists and makes the corporations wealthier while depressing wages and benefits etc. The secondary gains to be had include bargain prices of realestate caused by bankruptcies associated with the upheaval, etc.
Unions are nothing more than a lame attempt at a scapegoat for malfeasance plain and simple. Smoke for the getaway.
Problem with smoke is there's always someone around smart enough to turn on a fan or work to put out the fire if it's that bad. In this case, it's just a mild annoyance and a lame bs excuse hoping to be mistaken for intelligent banter.
US businesses didn't like American wages but wanted American profits. They sold out Americans for profit - pure and simple.. but, lower, they did it in wartime. To properly use a phrase that was improperly used with McCarthy, "Have you no shame, sir.. at long last.." If God has a sense of humor, he'd resurrect Roy Bean for a day to deal with it properly. But absent that, I'm sure the sheep will adapt and overcome his absence if ya'll don't flee to france or Canada first.. or *gasp* grow a conscience and change your wicked ways... lol
Hmmm. The guy must be ancient. Too old to learn? They were probably looking for a reason to get rid of him anyway.
The sheep voted for Reagan because the economy was in the crapper. Same reason they voted for Klintoon in 92. And they reelected him in 84 cuz the economy was good. Same reason they reelected Klintoon in 96. Keep the sheep fat and happy.
What is good for the goose is good for the gander.
This bears repeating. While we can calculate the effects of offshoring, we can't calculate the secondary effects. Pay now or pay later. We are asking for trouble down the road.
Gee Willie, it is only the second day of 2006, and you have the quote of 2006, from DUmmieland.
Nah, you can still get those jobs in government and just as those jobs and the liabilities owed to the retirees holding those jobs are killing industry in America there will come a day of reckoning when the liabilities incurred by all levels of government may kill the big goose.
Thank you for your kindnesses. It's been more than a year since I was offshored and if I could have moved, I would have. I have issues, like anyone else in some ways, worse in others.
I'd give a rundown; but, last time I did was pretty literally like playing Joe McCarthy for a week. If I care to replay that, I'll give a thumbs up to those urging me to run for office.. can't be any worse than what my own party did to me.
It depends on who "you" is. I got a buddy that worked years ago as a movie stunt man. He still gets checks in the mail.
Democrats love to refer to dividends and interest as "unearned" or "passive" income. That may be true for Kennedy and Heinz, but those leeches live off our taxes. People who actually make a living with interest and dividends have to work pretty hard to get things set up enough to make a profit.
Those liabilities are coming faster than you think.
Starting in 2006, GASB (Government Accounting Standards Board) 45 will require that OPEB's (Other Post Employment Benefits) such as retiree health care MUST shown as an accrued liability on the budget, similar to pension benefits. Rather than using pay-as-you-go for retiree benefits (which does not show the "true" cost of health care for employees over the life of that employee), GASB 45 requires public entities to estimate the future value of such benefits for its retirees and then calculate an actuarially derived yearly expense to be shown in the entity budget.
The implications of GASB 45 are huge, because the actuarially derived yearly expense of health care for retirees will end up going against the bottom line - and may (ok, WILL) cause public entities to increase the tax levy to fund this liability.
GASB 45 does not require entities to FUND the liability but just to REPORT it, but in reality, entities will have to fund this liability in some fashion. I believe this will end up forcing many small public entities to raise taxes even more to cover this "new" liability.
Offering health care upon retirement to public employees without provisions to control cost is not only irresponsible, but will "bankrupt" many public entities. In many instances, it is a "guaranteed" benefit that has a highly variable cost.
Klintoon got into office by default. Sorry. If there hadn't been a third option, he'd have never gotten there. And if the Republican dirty tricks division hadn't gotten to Perot, An independant would have been president instead of the eight years of Nero that we had. Having been on the recieving end of the foulness that Pubs can dish out, I believe Perot now. Back then I couldn't because I didn't believe Pubs could be that foul. Now, I've seen it first hand and believe it was probably worse than he let on. So, IMO, if the pubs had shut their yap and played on the up and up, they might have sat through two terms of Perot instead of 8 years of Nero.
Clinton didn't keep the sheep fat and happy, he kept them pretty perpetually po'd and disgusted. My memory ain't that short.
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