H
Harry Hope
Guest
From The International Herald Tribune, 4/21/08:
http://www.iht.com/articles/2008/04/20/business/wage.php
Wage erosion cuts deeper in U.S.
By Louis Uchitelle
Whatever Senator Barack Obama meant by his less than artful remarks
about small-town Pennsylvanians being "bitter" over lost jobs, he
certainly turned a lot of attention last week to the decline of the
American worker, bitter or not.
The talk most often has been of shuttered factories, layoffs,
outsourcing and other effects of globalization, especially in a state
like Pennsylvania, which has lost tens of thousands of industrial
jobs.
But there is another way to look at blue-collar workers or their
counterparts in the service sector.
The $20 hourly wage, introduced on a huge scale in the middle of the
last century, allowed masses of Americans with no more than a high
school education to rise to the middle class.
It was a marker, of sorts, but it is becoming extinct.
Americans greeted the loss with anger and protest when it first began
to happen in big numbers in the late 1970s, particularly in the steel
industry in western Pennsylvania.
But as layoffs persisted, in Pennsylvania and across the country,
through the '80s and '90s and right up to today, the protests subsided
and acquiescence set in.
Hourly workers had come a long way from the days when employers and
unions negotiated a way for them to earn the prizes of the middle
class - houses, cars, college educations for their children,
comfortable retirements.
Even now a residual of that golden age remains, notably in the auto
industry.
But there, too, wages are falling below the $20-an-hour threshold -
$41,600 annually - that many experts consider the minimum income
necessary to lift a family of four into the middle class.
Political leaders - Democrats and Republicans alike - have argued that
education and training are a route back to middle-class wages for
those who have fallen out.
But the demand is not sufficient to absorb all the workers that the
leaders would educate.
"People are mainly worried about having a job and only secondly what
it pays and whether they are gaining ground," said Frank Levy, a labor
economist at the Massachusetts Institute of Technology, trying to
explain the absence of an outcry and a political debate in which the
candidates do not quantify the decline.
The wage erosion haunts the presidential campaign.
Obama, competing against Hillary Rodham Clinton in the Pennsylvania
primary to be held Tuesday, touched this nerve in his description of
small-town voters who "cling" to their guns and their religion in
their resentment over lost jobs.
It was a description that prompted John McCain, the Republican
candidate, to label Obama an "elitist," and Clinton to portray him as
out of touch with small-town sentiment.
But like Obama, neither spoke of dollars missing from paychecks, or of
the disappearing $20-an-hour wage.
That basic wage blossomed first in the auto industry in 1948 and
served, in effect, as a banner in the ideological struggle with the
Soviet Union.
As the news media frequently noted, salt-of-the-earth Americans were
earning enough to pay for comforts that their counterparts behind the
Iron Curtain could not afford.
As the years passed, unions succeeded in negotiating this basic wage
not as an ultimate goal but as an early rung in their wage ladders.
That was the union standard, particularly in heavy industries, and in
the early postwar decades nonunion employers fell into line, spreading
middle-class incomes broadly through the service sector.
"The most important model that rolled off the Detroit assembly lines
in the 20th century," said Harley Shaiken, a labor economist at the
University of California at Berkeley, "was the middle class for
blue-collar workers."
The high point came in the 1970s, just as the United States was
beginning to lose its controlling grip on the economies of the
non-communist world.
Since then the percentage of people earning at least $20 an hour has
eroded in every sector of the economy, falling last year to 18 percent
of all hourly workers from 23 percent in 1979 - a gradual unwinding of
the post-World War II gains.
The decline is greatest in manufacturing, where only 1.9 million
hourly workers still earn that much.
That is down nearly 60 percent since 1979, the Bureau of Labor
Statistics reports.
The shrinkage is sometimes quite open.
The Big Three automakers are buying out more than 25,000 employees who
earn above $20 an hour, replacing many with new hires tied to a
"second tier" wage scale that never quite reaches $20.
A similar buyout last year removed 80,000 autoworkers.
Many were not replaced, but many were, with the new hires paid at the
non-middle-class scale, and with fewer benefits.
The United Auto Workers accepted management's argument that it must
have labor cost relief to rebound and prosper.
Whatever the justification, the new accord in effect abandoned the
1948 contract.
This time the autoworkers were not first.
They ratified a practice that had spread to tire makers,
heavy-equipment manufacturers, parts plants, groceries, retailers and
longshoremen, diluting older workers' resistance by preserving their
status, while lowering earning power for new hires.
Two tiers is one tactic.
Another is filling middle-income jobs with temporary workers earning
less.
Add outsourcing to the list, and the off-shoring of middle-income work
like radiology.
Then there are the manufacturers who close a union plant and shift
production to a nonunion one with lower salaries.
Put givebacks on the list as well.
Tens of thousands of workers have accepted wage cuts pressed on them
by embattled employers, cuts that in many cases pushed their wages
below middle-class levels.
_____________________________________________________
Harry
http://www.iht.com/articles/2008/04/20/business/wage.php
Wage erosion cuts deeper in U.S.
By Louis Uchitelle
Whatever Senator Barack Obama meant by his less than artful remarks
about small-town Pennsylvanians being "bitter" over lost jobs, he
certainly turned a lot of attention last week to the decline of the
American worker, bitter or not.
The talk most often has been of shuttered factories, layoffs,
outsourcing and other effects of globalization, especially in a state
like Pennsylvania, which has lost tens of thousands of industrial
jobs.
But there is another way to look at blue-collar workers or their
counterparts in the service sector.
The $20 hourly wage, introduced on a huge scale in the middle of the
last century, allowed masses of Americans with no more than a high
school education to rise to the middle class.
It was a marker, of sorts, but it is becoming extinct.
Americans greeted the loss with anger and protest when it first began
to happen in big numbers in the late 1970s, particularly in the steel
industry in western Pennsylvania.
But as layoffs persisted, in Pennsylvania and across the country,
through the '80s and '90s and right up to today, the protests subsided
and acquiescence set in.
Hourly workers had come a long way from the days when employers and
unions negotiated a way for them to earn the prizes of the middle
class - houses, cars, college educations for their children,
comfortable retirements.
Even now a residual of that golden age remains, notably in the auto
industry.
But there, too, wages are falling below the $20-an-hour threshold -
$41,600 annually - that many experts consider the minimum income
necessary to lift a family of four into the middle class.
Political leaders - Democrats and Republicans alike - have argued that
education and training are a route back to middle-class wages for
those who have fallen out.
But the demand is not sufficient to absorb all the workers that the
leaders would educate.
"People are mainly worried about having a job and only secondly what
it pays and whether they are gaining ground," said Frank Levy, a labor
economist at the Massachusetts Institute of Technology, trying to
explain the absence of an outcry and a political debate in which the
candidates do not quantify the decline.
The wage erosion haunts the presidential campaign.
Obama, competing against Hillary Rodham Clinton in the Pennsylvania
primary to be held Tuesday, touched this nerve in his description of
small-town voters who "cling" to their guns and their religion in
their resentment over lost jobs.
It was a description that prompted John McCain, the Republican
candidate, to label Obama an "elitist," and Clinton to portray him as
out of touch with small-town sentiment.
But like Obama, neither spoke of dollars missing from paychecks, or of
the disappearing $20-an-hour wage.
That basic wage blossomed first in the auto industry in 1948 and
served, in effect, as a banner in the ideological struggle with the
Soviet Union.
As the news media frequently noted, salt-of-the-earth Americans were
earning enough to pay for comforts that their counterparts behind the
Iron Curtain could not afford.
As the years passed, unions succeeded in negotiating this basic wage
not as an ultimate goal but as an early rung in their wage ladders.
That was the union standard, particularly in heavy industries, and in
the early postwar decades nonunion employers fell into line, spreading
middle-class incomes broadly through the service sector.
"The most important model that rolled off the Detroit assembly lines
in the 20th century," said Harley Shaiken, a labor economist at the
University of California at Berkeley, "was the middle class for
blue-collar workers."
The high point came in the 1970s, just as the United States was
beginning to lose its controlling grip on the economies of the
non-communist world.
Since then the percentage of people earning at least $20 an hour has
eroded in every sector of the economy, falling last year to 18 percent
of all hourly workers from 23 percent in 1979 - a gradual unwinding of
the post-World War II gains.
The decline is greatest in manufacturing, where only 1.9 million
hourly workers still earn that much.
That is down nearly 60 percent since 1979, the Bureau of Labor
Statistics reports.
The shrinkage is sometimes quite open.
The Big Three automakers are buying out more than 25,000 employees who
earn above $20 an hour, replacing many with new hires tied to a
"second tier" wage scale that never quite reaches $20.
A similar buyout last year removed 80,000 autoworkers.
Many were not replaced, but many were, with the new hires paid at the
non-middle-class scale, and with fewer benefits.
The United Auto Workers accepted management's argument that it must
have labor cost relief to rebound and prosper.
Whatever the justification, the new accord in effect abandoned the
1948 contract.
This time the autoworkers were not first.
They ratified a practice that had spread to tire makers,
heavy-equipment manufacturers, parts plants, groceries, retailers and
longshoremen, diluting older workers' resistance by preserving their
status, while lowering earning power for new hires.
Two tiers is one tactic.
Another is filling middle-income jobs with temporary workers earning
less.
Add outsourcing to the list, and the off-shoring of middle-income work
like radiology.
Then there are the manufacturers who close a union plant and shift
production to a nonunion one with lower salaries.
Put givebacks on the list as well.
Tens of thousands of workers have accepted wage cuts pressed on them
by embattled employers, cuts that in many cases pushed their wages
below middle-class levels.
_____________________________________________________
Harry
