Middle Class Job Losses Batter Economy

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.

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.

"If your work isn't worth any more than the pay the Chinese worker gets, upon what basis should I and others pay you more?"

Obviously, you've never lived in a country without a middle class. There was a time when people supported their fellow citizen--if for no other reason than a rising tide lifts ALL boats. I don't care what the globalists say, if you loose enough of your manufacturing base, your service base will suffer. They are even outsourcing so called "jobs of the future", like computer software development. On top of this, we are also squeezing from the bottom by inviting in millions of low-skill immigrants.

Now, some people (you among them?) would sell them out for as little as a $1.00 per hour differential--or less. As one quote from the article says: "At $9/hr, I can't buy a new vehicle." Think about it.

IT'S THE UNIONS

A lot of this is the union's fault, true, but not all of it, IMO. Union leadership, corporate leadership and politicians all got in bed together to sell us out for temporary profits. They don't care about the future, just that they get theirs today. And consumers buy the cheaper products without concern. Imagine if politicians protected American employees, American corporations were penalized when work is sent out of country, unions nurtured a competitive workforce, and Americans bought American product as much as possible.

I used to live in the Weirton, WV area and my Dad retired from Weirton Steel last year. He was one of the lucky ones who got out in time. When I go and visit, I can't believe what's happening to the town I lived. It has become a slot machine haven. Weirton used to have 2 Dairy Queens they are now one is called Mugsy's and the other Bugsy's. Alot of businesses are turning into that kind of stuff. It is a shame, but with Mountaineer Park just a little north of the town, I guess it was inevitable.

No, my job loss was not simple supply and demand. Sorry. That's utter prevarication. Demand for my job didn't go down.
My job was offshored, not done away with. I was, in point of fact, replaced by a *cheaper*, less productive mexican national in mexico because it was *cheaper*, not because of supply and demand - not even because of the US market; but, because of US labor rates compared to foreign labor rates. It seems that while dumping of product is illegal, it's fine do dump with wage rate as long as you can make a profit subverting the economy on that end of the equation. Apparently, dumping wouldn't be wrong if it were because of labor cost.. Amazingly, our forefathers weren't that stupid either.

If your work isn't worth any more than the pay the Chinese worker gets, upon what basis should I and others pay you more?

Do you want the Chinese to be our sole source of the manufacture of defense weapons?

The basis upon which Americans should be paid more is for critical manufacturing that protects our sovereignty and our ability to keep from being blackmailed or invaded by every third-world dictator who comes along.

The one-big-happy "global economy" to which you and others point is an economy often controlled using slave or prison labor, brutal dictatorships and protective laws which prevent true competition.

Do you want your consumer junk made by children under horrible sweatshop conditions? Is that what you call competition?

It's remarkable how American cities will sell municipal bonds, repaid by property taxpayers, to build football stadiums in which millionaire players and owners have fun while critical manufacturing in America is told to go to straight to hell.

When foreigners invade the United States, you'd better have some phone numbers in China to call for help.. that is, if China itself is not doing the invading.

All these people "deserve" to be thrown out of work.

What are these nuisance neighbors and fellow citizens to you?

I'll tell you where they may ultimately go for help. They'll be breaking into your house and stealing your stuff if they can't make a living and feed their families....and you may be diving into dumpsters yourself someday, right beside them, when your employer throws you into the street to save a penny.

"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."

Wow ... 75 to 100K and 6 weeks of vacation at the plant.
Damm, I got in the wrong industry ... I thought being an SAP Programmer/Analyst/Configurator was good, but looks like installing wheels or trannies was better. At least back then.

I'm not a democrat; but, I take issue with the concept of 200,000 new jobs. It isn't about the numbers of jobs, it's about the quality of them. Or perhaps everyone here has gone dense when many of us denounce the problem of the economy being the absence of good paying jobs (not jobs in general) and some retort that, 'I guess 200,000 new jobs per month..'
Stop reading your talking points and start thinking.. or is it too much to anticipate that republicans should not act like democrats when they have an agenda that's unpopular and they can't otherwise defend.

I didn't mention unions (although the implication is there I suppose). Unfortunately, the job you had which was offshored is now the equivalent of bolt-tightening. If a corporation can increase profits by moving certain jobs, why shouldn't they? That's their sole purpose. It happens every day within the US, with companies selecting low cost metro areas over high cost regions. This causes very little uproar, because it makes sense. The only difference in offshoring is that of degree.

This phenomenon merely illustrates the point that we, as a nation, must continually be innovators (at the individual and corporate levels). That may seem burdensome to people, but that's the tradeoff for the astonishing affluence of the American people.

My job was offshored, not done away with. I was, in point of fact, replaced by a *cheaper*, less productive mexican national in mexico because it was *cheaper*, not because of supply and demand

It was cheaper because the supply outstripped the demand. And I doubt your Mexican national is less productive; it is likely he is extremely productive on the margin, which is why he has the job now.

I'm not a democrat; but, I take issue with the concept of 200,000 new jobs. It isn't about the numbers of jobs, it's about the quality of them....

That statement will always win the argument. It means that it doesn't matter that more people have jobs, or that they're making more money, or amassing more wealth, or that they prefer their new jobs. All that matters is that these new jobs do not have the same "quality" in some mysterious ethereal sense, and it's all Bush's fault.

Nobody can ever refute that.

You said "I'm not a democrat"

Maybe you should be with your attitude of government butting into private business. Real Conservatives generally want less government.

And if Jose in Mexico can do your job for 1/2 or 1/10 as much why do you want the government to hold a gun to the owners head and force him to continue over paying you. If you could of found a job that paid 10 times as much as you were making with much better benefits I bet you would have quit in a minute.

By the way I've been laid off twice in my life, and now I'm making about 2/3 of what I used to, but thats life and I have adjusted. I don't want President Hillary taking care of me from the cradle to the grave.

That is rejected by history. Offshoring is a relatively new thing arising out of loose trade policy in a time when people snicker about treason, sedition and subversion as though it's the in thing. Apparently, Republicans have decided to emulate Sean Connery's character from "the Russia House" For the common good, everyone apparently must betray their country - and their common sense. The US seems to have had to pay prices for it's "affluence" since when.. since it started having to "pay for taxcuts".. Or since every candidate on all sides became globalists by limiting the competition to elitists who think only they have the pedigree to rule..

I doubt your Mexican national is less productive...

In general, average American labor is far more productive (output per dollar) than any other nation's labor force. That's why American pay is higher --it's earned. Some times it's easier to pay a slow foreigner half as much to produce half as much because of other factors --location, time, taxes, etc., and sometimes it's not.

It was cheaper because the supply outstripped the demand.

No, it was cheaper because the economic inequalities between the US and Mexico make Mexican labor cheaper. Had nothing to do with supply and demand within the market. When you extend supply and demand outside the market, then I'd agree. The point of contention here is that it never should have been so extended because any moron looking at the facts can see the outcome - the destruction of the US economy as wages elsewhere rob jobs from America which cannot be replaced longterm because of competition driving jobs out of the market. This is bad for America; but, good for profiteers and globalists. The treason lobby chears, as it were..

The US seems to have had to pay prices for it's "affluence" since when.. since it started having to "pay for taxcuts".. Or since every candidate on all sides became globalists by limiting the competition to elitists who think only they have the pedigree to rule..

Well, no. The US has always paid a price in the form of taking risks and working long and hard. Interestingly, the industries engulfed by unions have faltered because those concepts were negotiated out of the job description. Your situation, on the other hand, is the result of increasing knowledge worldwide. As technology advances, the once esoteric and valuable roles become routine. The technology and skill I use to navigate Free Republic would have been damned near magic 20 years ago. In my own office, I do the work that used to take 3 or 4 secretaries PLUS the professional.

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