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.
LOL! Well good-
I am no economics major- but I had NO IDEA what illegal immigration, welfare, and standing up for my neighbor had to do with this UAW president saying that over 30 yrs was not a secure job....
thought I missed a class or something.....LOL! But I will enjoy perching myself right here to learn more about economics...yes- I am a nerd- I love to learn...
"Not everyone could afford a college education. And that's still true today."
Nonsense! Where there's a will, there's a way... There are grants, loans, the military, etc. There's so much $$$ for college it's ridiculous. And of course, you can always do what a lot of us did--work your way through school.
"Americans must stand up for the RIGHTS of their fellow Americans'
Do you stand up for my RIGHT as an American to be a free-trader?
work your way through school..
Hey! I did that! mowed lawns and scrubbed toilets for anyone who would let me....kept a 4.0 GPA, made President's List, and was even student of the year!
oh- and had 2 preschoolers and a highschooler to raise in the meantime while deadbeat dad was stealing cars and selling drugs...
I have no patience for whining victims...
No new Victorian/Edwardian books out for this Christmas, so no, I'm off reading on a different topic. I like alternative history books, so I just may look into what you're now reading. Thanks for the tip!
Oh pleeeeeeeeeeeeease...don't hand me that tired excuse for not saving; it's so old, its white beard is trailing on the ground! Even the poorest of the poor can save, if they REALLY want to and some of them used to. Almost nobody lives from hand to mouth today. There is absolutely NO valid reason to NOT save; yet fewer and fewer people think ahead and put anything by. Part of it,I lay at the feet of Benjamin Spock, whose baby rearing book is partly responsible for generations of instant gratification whingers.
Can you play Quidditch on line?
I wasn't an economics major, but I do know history and understand the topic. There's always something you can learn on FR; even if it's just who is a fruitcake and who isn't. LOL
Clearly you do not read at the most elementary level.
The rights that must be defended are our constitutional rights. They include, for your edification, the right to elected representation. Only "free traders" would have a problem with that, as you have so ably demonstrated.
Re: your tag line. I'm not buying it.
And I've never been a full-throated W. supporter.
Examine my posts.
LOL........you're on a roll tonight, aren't you? :)
My rights to vote have been subsumed by "free traders"?
I have no ( well, actually I don't, considering who they are ) no Senators and no Representatives in the Senate and the House? The person whom I helped to place in the White House isn't there because I voted for him? IN WHAT UNIVERSE?
Only a tinfoil wearing boob would claim this is not so.
Seriously needed by the sky-is-falling-crowd.
http://www.amazon.com/gp/product/0465081452/qid=1136260435/sr=8-2/ref=pd_bbs_2/102-2035226-7326504?n=507846&s=books&v=glance
No, I'd argue that point. What about liquidity based on a yearly outlook? A two-year outlook?
No......I can tell you for a fact that it has nothing whatsoever to do with 'liquidity'. No offense intended when I say that's a canard.
Some of us really DO try to stay on topic, and thanks for reminding all of us that we should. Let's go back to the article and perhaps we can salvage the thread.
This government "feel good" economic reporting started, no surprise, in the Clinton years. Focus groups liked good news.
This is macro economic stuff, folks. Those of you getting off on schadenfreude at the micrco economic misery of your fellow citizens keep on keepin' on. Nothing for you here.
Good post, Paul Ross. And thank you for "Hypothetical Hocus-Pocus." I've been asking for feedback on hedonics for almost a year. I thought it was someting I saw in a Monty Python movie.
The GDP is bumped by an amount of dollars "into a higher number reflecting the hypothetical benefits of soaring computer power." Technology inflation, some call it.
Thus according to your reply a 1998 Clinton calendar quarter GDP increase of $114.2 billion (nominal value, right?) becomes $127 billion (Monty Python value).
It lives on today. In fact, this "increase in computer power that businesses are getting for their money" inflates the manufacturing portion of the GDP and an article by Mr. Reynolds of CATO (I believe) a couple of years ago used the result to "prove" that manufacturing has remained unchanged as a portion of the GDP for decades. Thus refuting that any significant offshoring was taking place. Limbaugh, et al. picked it up and amplified the crowing coast-to-coast.
Did they really take housing, energy and food out of the "basket of goods" used to measure inflation? If so what the hell is left? What the helll is the point of measuring "inflation?"
Well, I'm going to copy your replay and save it for later. Thanks again for the work!
Americans aren't making Fords? Is that what you meant about illegal aliens? Are they making the Fords?
(NAFTA and CAFTA are travesties, granted. I personally am doing great under Bush's fantastic economic management.)
Never underestimates the power of free trade to create jobs. I hope you stay open minded about the possibility that NAFTA, CAFTA, and of course the tax cut, have been very important in Bush's fantastic economic plan.
How're your wife and kids? I hope all of you had a Blessed and Happy Christmas!
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