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.
Just wanted to know where you're coming from -- some gov't unions are okay and not all are a "perversion in a democracy."
I agree.
From Wikipedia:
To avoid the abuses of the English law (including executions by Henry VIII of those who criticized his repeated marriages), treason was specifically defined in the United States Constitution, the only crime so defined. Article Three defines treason as only levying war against the United States or "in adhering to their Enemies, giving them Aid and Comfort," and requires the testimony of two witnesses to the same overt act or a confession in open court for conviction. This safeguard may not be foolproof since Congress could pass a statute creating treason-like offences with different names (such as sedition, bearing arms against the state, etc.) which do not require the testimony of two witnesses, and have a much wider definition than Article Three treason. For example, some well-known spies have been convicted of espionage rather than treason. In the United States Code the penalty ranges from "shall suffer death" to "shall be imprisoned not less than five years and fined under this title but not less than $10,000; and shall be incapable of holding any office under the United States."
So by definition, I would not be committing treason by what I propose to do. If you were not aware of this, we are not at war with the Philippines. In fact, I believe we are assisting their government against their Muslim insurgency.
D
You make tons of good posts on trade China immigration and it's time for a New Year's compliment :)
Interesting post -- I'd take the Colonel out of the equation, since military personnel tend not to keep score with money.
However, viewed another way -- I'd say that the guy driving the forklift belongs to a union that has fought to increase his salary to maintain a standard of living. All the other middleclass jobs have fallen behind.
Corporate law is a large portion of legal practice, and most remunerative. Corporations are legal persons, but oddly, persons that may be owned, which seems to fly in the face of the intent of the Fourteenth Amendment upon which the personhood of corporations is said to be based.
That didn't seem to work too well the last time it was tried, what has changed to make you think that it would work now?
Be sure and say howdy to old Chuckie for me. Graham doesn't give me too many laughts but Chuck is a real scream and provides hours of enjoyment so be sure to pass along my encouragment for him to keep talking.
BTW: You should know that Smoot-Hawley is still on the books. It is still good law, but it has been relegated to the "back-up" punitive default trade position in the absence of what's called MFN...the coveted "Most Favored Nation" status voted by Congress. MFN came in with the U.S. adoption of GATT (the General Agreement on Tariffs and Trade, which was originally only with our Western Allies..it has been expanded radically since), NAFTA & WTO (WTO, the World Trade Organization... only came in under the last 9 pages of an addendum to NAFTA), CAFTA and so on, there have been a whole slew of exceptions carved out from it to promote a lowered tariff system.
These GATT and WTO Bylaws generally permit countries that rely on tariffs for their main revenues to maintain them, so long as uniform and not at prohibitively high levels. Smoot-Hawley's levels were essentially two-tier. A base 25% tariff for those whom we hadn't obtained specific reciprocity agreements with. And then those states we didn't like, or were considered serial trade malefactors...dumpers and subsidizers...or other miscreant discriminatory behavior...got a 50% tariff wall. This typically is sufficient to punish most of the egregious actors in the international playing field. China in particular spent UNTOLD millions courting the U.S. congress to grant it MFN status. It had been getting yearly approval of an exception from Smoot-Hawley. By getting MFN, it didn't need to be reviewed every year, and have its misbehaviors be subject to Congressional pique... and by being permanent, it saved the continuing UNTOLD millions of lobbying moneys that it had poured into the nest of vipers in Capitol Hill. These would-be World Rulers are frugal over in Bejing.
That didn't seem to work too well the last time it was tried, what has changed to make you think that it would work now?
How do you mean? Smoot-Hawley was a rationalization of the general tariff framework we already had in place, but added an overall systemmic increase in schedule rates over our baselines. This was a mistake at the time, as the U.S. was already subject to a huge monetary implosion. A third of the U.S. banks had failed. The money they represented was not replaced, but with those failures, just vanished from the economy. And then the Gold Standard forced a run on the U.S. dollar, as nervous types feared the dollar's convertibility would be ended (which FDR ultimately did)...and Hoover and the Fed moved to try and dissuade that with progressively higher interest rates on their Treasury notes, trying to keep foreign and domestic investors from converting while they could. Hoover had not favored Smoot-Hawley, thinking it went too far at the time...and he was right. But caucas politics induced him to go along and sign it. This further chilled the economy. With the Smoot-Hawley tariff increases at the time, it just added yet another barrier to the recovery of the economy. 33% of the U.S. population wound up filing for bankruptcy. But the liberal propaganda that Smoot-Hawley "caused" the Great Depression, is in fact erroneous. It basically contributed, however, to the factors preventing recovery...and it being a global collapse...not just U.S. this didn't help. It was like "piling on", and further dried up economic activity. The FDR crowd went out of their way to improperly blame Smoot-Hawledy (which was GOP the whole way) for things it hadn't done, so that they could pin the blame on the GOP for causing the Great Depression. The Democrats had long opposed tariffs, all of the general ones..which had in fact caused no recessions let alone depressions..., and explicitly opposed Smoot-Hawley, wanting instead their Progressive Income Taxes increased on those rich people. All so as to redistribute money. They were right about Smoot-Hawley ...but for the wrong reasons...and only as a matter of timing on this one. Otherwise they were full of it, as have been almost all the free trade crowd.
They couldn't get a treaty through the Senate with its' 2/3rds requirement, so they went the "Agreement" route, which is non-Constitutional. To date, no one has challenged it. (It may be coming up in the Timber Exporters case challenge to NAFTA, we'll see, I haven't had a chance to read their pleadings yet.) Based on that faulty GATT precedent, where MFN (by simple majority vote) gives a nation so blessed, freedom from the Smoot-Hawley scheduled duties.
So anyways, really, the burden of proof is on you. It's not what has changed to justify terminating the socialist redistributionary shell-game of income taxes and going to a consumption tax that rewards production, investment and saving. What HASN'T changed?
Agreed.
Union membership and contracts limit the ability of individuals to negotiate their labor. That is probably one reason people get left behind whild business moves overseas.
"You would also eliminate police and fire fighter unions?"
I would not eliminate unions I would eliminate their power to dictate who works and for how much. Unions do not look out for 'workers' they look out for members. They are a closed society. Building trades are the worse along with marintime.
If I start a business why can I not start it in Asia? I have a friend that did this very thing. He started a software company and found the best programmers at the best rate in India and he moved the whole business to Singapore. There is no corporate income tax and personal income tax is 15% FLAT.
If you want jobs in the US just adopt the tax policies of our adversaries. He also said his top programmers are beginning to cost as much as Americans but the regulations and tax policies are too punishing in the US to bring it inshore. This business will remain offshore. The overhead including a taxes is just too much. He is not about to hire an EEOC compliance officer :)
Unfortunately, there are a bunch of self-styled free traders who say it can't be done. Or worse still...shouldn't be done.
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