Posted on 03/06/2006 9:19:26 AM PST by Willie Green
For education and discussion only. Not for commercial use.
Ford is closing 12 plants and laying off 30,000 workers. General Motors is laying off 40,000 workers.
Most of these are blue-collar workers or lower-level administrators and all qualify to be called middle class.
With these cuts and others, the American middle class is shrinking. A small proportion of it is becoming extremely rich and a larger proportion of it is becoming poor.
Middle class in a democracy such as ours is extremely critical because it provides stability for society and prevents revolutions or class wars. It also presents hope in terms of what can be accomplished economically in our society by working hard and excelling in certain professions.
Unfortunately, it appears our society is declaring war on the middle class. This group is squeezed out from both ends.
The airlines, the automobile industry and many others are negotiating major reductions in pension plans or retirement programs, on one end, and outsourcing major middle-class jobs on the other.
Meanwhile, middle-class pay raises have been flat during the past two decades. While the mean income of the upper 20 percent of society rose 69 percent from 1990 to 2003, from $87,037 to $147,078, the mean of the third 20 percent of society increased by only 46 percent, from $29,781 to $43,588.
The increasing gap between the two groups is alarming and there are a number of problems.
First, there is no evidence that the savings from outsourcing, downsizing and limiting retirement programs are passed on to the consumer.
Next, major corporations such as Exxon are making unbelievable profits but are not plowing back some of their earnings into major research and development.
Thirdly, top CEOs are making so much money that they don't seem to show genuine interest in their companies' growth in the form of creating good middle-class jobs. Ford and GM will start new factories where the labor costs are very low, but this will continue reducing the wages, salaries and retirements of their middle-class workers in the U.S.
We must remember Peter Drucker's profound statement: "Enterprises are paid to create wealth, not to control cost." Downsizing, pay reduction and concessions on pension plans are all cost-controlling activities and one must question their contribution to wealth creation.
A. Coskun "Josh" Samli is research professor of marketing and international business at the University of North Florida. jacksonville@bizjournals.com | 396-3502
Good grief, why did we ever elect this guy?
Wasn't Klinton bad enough???
ping
The middle class is not shrinking. Union jobs, and the thugs that go along with them, are what is shrinking. I believe, in my lifetime, we will finally see the demise of the labor union.
It is a disturbing trend, but unfortunately both political parties are run by people who see America as just real estate to be bought and sold.
Any company that has a contract with long-term unspecified and unlimited liabilities is run by fools. The traditional pension is dead. I doubt any company will have anything other than defined contribution pensions in the future.
First, there is no evidence that the savings from outsourcing, downsizing and limiting retirement programs are passed on to the consumer.
Car prices relative to inflation have been dropping. I bought a better and larger car last year than the one I bought ten years ago for about the same price after inflation.
Next, major corporations such as Exxon are making unbelievable profits but are not plowing back some of their earnings into major research and development.
Exxon's R&D line in their 2004 annual report is $649 million dollars. That's about 2.5% of their net income. Unless that doesn't count as "major research and development".
Bull crap. GM and Ford aren't laying off huge portions of their workforce because it's allowing them to make loads of money. They're doing it because they're going bankrupt.
The greed of the unions is destroying the middle class.
It's not all automotive companies that are losing money and having to lay off huge numbers of workers. The ones that don't have unions are making money.
GM and Ford aren't passing on savings to consumers? GM and Ford are having to price their products to be competitive.
It's also not a simple matter of wages. The non-unionized companies are more productive. They are able to pay competitive wages and still make more money because they don't have to abide by the insane union rules that sap productivity.
Bush didn't cause this problems, and he can't really fix it either. The blue collar workers need to wake up and see that the Unions have become a parasite that are destroying their livelihoods. The Union members need to fire the union leadership.
They need to quit trying to work in opposition to the companies and start trying to make it so that they can succeed so that everyone cam earn a living.
Middle class income goes up by 46% in 13 years an amount in excess of inflation and many middle class move to a higher income level and this is a bad thing ?
Right on, brutha, right on!!!!!!!!!!!
"Exxon's R&D line in their 2004 annual report is $649 million dollars. That's about 2.5% of their net income. Unless that doesn't count as "major research and development."
2.5% sounds like pocket change... :)
Only to socialist and communist thinkers that believe that we should all be equally miserable.
Real Americans look at this and think, "How do I get skills that let me get up to that level of income?"
Not only that, why assume that the both scales can increase at the same rate. Those in the upper 20 tend to be those more willing to take risks and thus reap high rewards.
It's in the Preamble:
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.By promoting foreign economic development to the detriment of our own citizenry, the Bush Administration is in direct violation of the premise of our Constitution.
| ...the early ’90s saw the end of the Cold War and, with it, a shrinkage of the technical jobs that supported the defense industry. I had a well-paying position as an electro-mechanical CAD drafter. Then our company experienced a takeover. The lucrative contracts were kept, of course, but a series of layoffs—graybeards first—scythed through the staff until finally I, too, was summoned for a final chat with the HR lady dubbed “the Terminator.” When I was hired for that job, in the late ’80s, I interviewed first with my potential supervisor. Satisfied that I knew the work and would likely show up if hired, he offered me a job on the spot. Then I was sent to the personnel department, where I filled out the standard paperwork for new employees. That was the last time a hiring took such a straightforward sequence for me. After the notorious “restructurings” of the late ’80s and early ’90s, hiring and retention practices changed. A new corporate culture emerged, demanding that a job applicant must first convince a human-resources person (who doesn’t even know the job) to allow him to meet the supervisor who actually knows what the particular position entails. But, then and now, competence isn’t what seems to matter to these increasingly influential HR types, anyway. Instead, they are looking for someone who will “fit in.” That mindset explains the now-familiar Blade Runner questionnaires that I found difficult to take seriously, much less understand how to successfully answer: “If a co-worker started to hand you a visibly chewed pencil, what would you do?” |
| ...I recall quitting a job in 1985 because I was only making $7.50 an hour. At the time, I was splitting a $525 monthly rent with two other guys for a three-bedroom apartment in Aspen Hill, Md. As anyone who browses today’s “roommate wanted” ads knows, one of those bedrooms now rents for the cost of the entire unit 20 years ago. And yet many of us are still expected to live off that same inflation-unadjusted wage. A family would need to be making over $48,000 a year to afford the median rent for a two-bedroom apartment, according to the National Low Income Housing Coalition. Furthermore, as data reported in December 2004 by Falls Church News-Press reporter Darien Bates indicate, Fairfax County’s “low” poverty rate still leaves “over 43,000 people…surviving on less than half of what they would need to afford their housing.” Paying a larger income percentage on rent, many try to sneak by without medical insurance. Thus, treatable health problems are allowed to worsen, leaving many low-income people one illness or accident away from the economic brink... |
I just checked out your little union website. not only is that website pure socialist propoganda, but my observations of cities throughout the united states, everyone that wants to work, can work, except in michigan ( or should i say the peoples democratic republik of michigan ).....
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