America's disappearing middle class

[question everything]

America's disappearing middle class

By Harold Meyerson
October 13, 2005

We're leveling down.

With the bankruptcy filing Saturday of Delphi Corp., the largest American auto parts manufacturer, the downward ratcheting of living standards that has afflicted the steel and airline industries hit the auto industry big-time. As Delphi executives tell the tale, they need to reduce the hourly pay of their 34,000 unionized employees from the current $26 to $30 range to a somewhat more modest $10 to $12.

(snip)

In 1914, one year after he opened his first assembly line, Henry Ford doubled the daily pay of his workers, saying he wanted them to make enough to buy the cars they produced. The Fordist compact was greatly enhanced by the rise in the 1930s of the United Auto Workers, whose contracts (along with those of the United Steelworkers) created the first employment-based health insurance benefits in the land and soon became the model for our mid-century economy. In the post World War II decades, America became home to the first decently paid working class in the history of the world. This was no mean distinction.

But that was oh so then. If Delphi gets its way, its employees will clearly not be able to buy new GM cars. (At the rate things are going, they'll have to save up to buy gas.) In the face of the combined onslaught of globalization, de-unionization and deregulation, the bottom may not be falling out of the American economy, but the middle certainly is. The very notion of a decently paid working-class job has become a defining oxymoron of our time.

Those middle-income jobs that still come with benefits attached are increasingly clustered in the public sector, where they are becoming more vulnerable politically. In the 1960s, '70s and '80s, teachers, nurses and cops struggled to win contracts comparable to the auto and steelworkers' deals. Today, they are among the last workers in America – along with chief executive officers, we should note – to still have defined-benefit pensions. How long they can go on before their standards, too, are ratcheted down is anybody's guess. In California, whacking public employees has become the primary purpose of Gov. Arnold Schwarzenegger; it is the goal that underpins his initiatives in the special election he has called for next month.

(snip)


Meyerson is editor-at-large of American Prospect and political editor of the L.A. Weekly.


Find this article at:
http://www.signonsandiego.com/uniontrib/20051013/news_lz7e13meyerso.html

[marmar]

1. It's like a return to the feudal lord era...

which I suppose is what BushCo wants.

[celestia671]

2. I saw the CEO of Delphi on TV today....

talking about workers like they were just pawns on a chess board. What an ass!

[question everything]

3. Wonder how much he is making (nt)

[celestia671]

5. I have no idea, but...

according to him, it's not enough. In his warped little world, managers and ceo's are in short supply and underpaid!

[question everything]

6. I suppose earning 500 times the average income

is not enough

[kentuck]

4. And if the middle class is diasppearing, where is the lower working class

going? Are they becoming invisible?

[question everything]

7. Good question. Someone has to buy all the stuff in Wal Mart

and K Mart and SAM's etc. in order not to throw the country into a recession. After all 2/3 of the economy is based on "service" - purchasing stuff whether we need it or not, providing jobs for all the people who serve us.

[kywildcat]

8. Lou Dobbs RIPPED

The ceo of Delphi yesterday for laying the companies troubles on the back of labor. Said something to the effect that if the best solution this highly paid ceo can present is to further erode labor (by suggesting that all of the companies woes would disappear if manufacturing would be moved to China for the cheap labor) then shareholders need to be contacted.He further went on the question cutting labors pay by 63% and increasing managements severance package from 12 to 18 months. Theceo thinks that headhunters are circling the facility, ready to snap up Delphis management. Lou was livid over this last night. Looking for link now...

from me:
Monday, Oct 17th, when the new bankruptcy bill takes effect, we can kiss the middle class good bye.
Welcome to serfdom.

[question everything]

9. Thank you. Spouse often asks in wonder: are you sure Dobbs is consrvative

I think that he used to be until he realized what today's conservatism is doing to this country.

Here is that part of the transcript:

http://transcripts.cnn.com/TRANSCRIPTS/0510/13/ldt.01.html

ROMANS: You know, it once was companies used profits to reinvest in their communities. Not anymore. President Bush signed the American Jobs Creation Act last year to give companies a big tax break on their foreign income, that $200 billion boon to multinational companies. They're not -- they're not growing jobs in this country with that money...

DOBBS: Oh, no.

ROMANS: ... they're buying back stock and they're using it for their regular...

DOBBS: I'm shocked. I'm absolutely shocked.

ROMANS: That's right.

DOBBS: I've got to tell you, we asked Steve Miller (CEO of Delphi) to join us on this broadcast, the CEO. Steve Miller made all of those sweeping very profound statements about his workers, American workers, having been on the job for three months. Now, as a CEO, I would like to understand how he can figure out how to lead that company and make those kinds of determinations in 90 days. He must be a very smart man, capable of disguising it brilliantly.

ROMANS: It's interesting, because a lot of the critic and the ethics professors, Lou, they tell us that just swapping out labor, if that's your only idea for saving a company, just replacing labor, that's not good management.

DOBBS: It's not good management. It's simpleminded. He needn't have gone to business school or bothered to have a career in business at all. If his sole outlook is to blame workers for the mismanagement of Delphi over the course of -- well, for at least 10 years, I mean, it's insane.

ROMANS: He also says he's concerned about health care costs, and he says he'll be spending a fair amount of time in Washington trying to work out that problem as well.

DOBBS: Well, maybe what Mr. Miller ought to consider, and maybe the shareholders of Delphi should consider, is if he is such a proponent of outsourcing and blaming the American workers for the ills of that company -- by the way, JT Battenberg, the former CEO who managed to drive the company into bankruptcy, stood before a group of executives, CEOs, telling me that his outsourcing plans, his offshoring plans, building all his production in China was going to be the next big strategy for Delphi, just about a year and a half before the company was in bankruptcy.

And he wants to -- there's a shortage of management? There's a shortage of good management at Delphi. Why does he want to keep people that drove the company into that mess?

ROMANS: A very good question. He says that there are head hunters that are lurking around all of his management, and he's got to pay them better to make them lead this company through to the next -- the next level. My question is, why are there head hunters lurking around people, trying to get new jobs for people who presided over a company that is now bankrupt?

DOBBS: I think there's a simple word, it's incestuous and insular. And these brilliant U.S. multinationals have managed to help this country run up a -- this year -- an anticipated $700 billion deficit.

The Chinese are beating our brains out. We should be, according to Mr. Miller's lights, looking to the Chinese for our CEOs, not some fellow who does about a two-year tenure at a bunch of turnaround opportunities.

Thank you very much. That's is a disgusting story. I mean, that really just -- that one annoys me more than a little. Thank you.

[kywildcat]

10. Thank you for the transcript