The IED Economy
“There is no real sense of job security,” says Duke University Professor Gary Gereffi. “I think that’s a kind of anxiety we’re unfortunately starting to live with. The longer [a factory has] been in existence, the more vulnerable your job probably is,” Gereffi says.
The working class are called the statistical middle class due to their position on the income spectrum. Economic class models used by researchers like Dennis Gilbert or Thompson and Hickey estimate that roughly 53% of Americans are members of the working or lower classes. The majority of the statistical middle class enjoy relatively low job security, often needing two incomes to meet their needs. This makes such folks vulnerable to Middle class squeeze due to downsizing, competition from lower-paid foreign workers and contractors, and the elimination of unions. Does this sound like your situation? Not sure? Steve Daniels of WTVD, Raleigh NC, offers some important tips that’ll help you recognize if your job could be in jeopardy.
The situation is beginning to be noticed in the Congress, the last place problems seem to attract attention.
“Greed, in my humble opinion, will destroy America,” says Walter Jones, the Republican North Carolina Congressman who’s tired of hearing from his constituents who are losing their jobs, even those making those french fries he renamed freedom fries. At least those fast food jobs aren’t going to end up in Mexico.
In Reynosa, Mexico, there are 200 American factories employing nearly one hundred thousand people - ten Reynosinos for the price of one Tar Heel. Rochelle Richardson is losing her job at the Eaton factory in Johnston County to a factory in Reynosa. She says she understands why her factory is closing. “If I had to make a business decision like that and let 10 people do what one person does, why not?” Rochelle says.
The stock response to this is to return to school and get educated. Computer classes are a very popular course, but as a person who is involved with computers as a profession in the real world for thirty years, I can attest that things aren’t very rosy for us old timers. Dozens of us are Microsoft MCSE’s, yet we keep our current employment because the pay as an MCSE doesn’t match what we make now as industrial controller systems techs.
William Bedford of the Canada Free Press puts it thusly:
History teaches us that progress in the work place, while eliminating thousands of jobs, creates thousands of new ones. And human workers still will be needed to build, program and maintain those millions of robots that are heading our way. The term, artificial intelligence however would be better used to describe the eggheads who believe that they can teach computers to think for themselves.
The fact is, a computer, no matter how amazing it appears to be,
is still only a machine that any fool can render useless
simply by cutting off its power supply.
But that doesn’t stop workers from seeing more education as the way out as this sadder-but-wiser would-be computer programmer can attest. She ran up $22,157 in student loans for a certificate she has not been able to use, discovering that her computer skills weren’t good enough, even after obtaining extra schooling, to get an office job.
We’re going to be joined on the other side of the page break by readers from Blogcritics, so leave room for swelled heads and inflated egos.
I can hear the Grand Poohbahs revving up now. “But the economy is doing so wonderfully!” Despite the recent crash? “Sure! Fantastic! Lots of new jobs!”
Not so fast there, Pilgrim! That Commie pinko Paul Craig Roberts, know-nothing Assistant Secretary of the Treasury in the liberal socialist Reagan administration, Associate Editor comrade of the leftist Wall Street Journal editorial page, Contributing Editor of the Marxist National Review, and author of the socialism bible, The Supply-Side Revolution, insists that economists are in denial, blind to the adverse impact of offshoring:
“It made some sense when General Motors claimed that what is good for General Motors is good for America, because when the claim was made General Motors produced in America with American labor. It makes no sense to make this claim today when what is good for a company is achieved at the expense of the American work force.
“U.S. job creation in the 21st century is below past performance. Debt payments of Americans as a percent of their disposable incomes are rising while the savings rate has collapsed into dis-saving. Poverty rates have turned back up in the 21st century, when the impact of globalism on Americans has been most pronounced. Debt-driven consumption is exceeding U.S. output by a sum in excess of $800 billion annually. America pays for its over-consumption in dollars which foreigners use to buy up existing U.S. assets. Many Americans have been forced to train their foreign replacements who work for one-third less pay.
“It is this replacement of U.S. workforces by foreign workers that explains the extraordinary rise in CEO compensation and the flow of most of the income and wealth gains to the few people at the top.”
Roberts was reacting to a Manufacturing & Technology News article featuring Harvard University professor Michael Porter at a Washington, D.C., press conference in November of 2006, during which Porter insisted that it was not “particularly important for the nation to worry about the perceived loss of manufacturing.”
Well, as the Luddite understanding of computers presented above parallels Roberts’ j’accuse!, GIGO applies to those who use computers as well as those who spout unsubstantiated economic drivel. Got a beef with this comment? Take it up with Roberts. Blogcritc commenters consider me seriously unprepared for battle with the happy-talking economic conservative.
But let’s stick to something that I “can handle” - the reportage of those manufacturing job losses that Professor Porter thinks are beneath our notice.
Let’s begin with an observation about the falsity of governmental statistics concerning job creation. Again, I’m not qualified to make this argument, so I’ll toss the baton to Morton Marcus, an economist formerly at the Kelley School of Business at Indiana University. He asks the pertinent question: What is the truth about jobs in Indiana?
“Our elected leaders and their appointees are once again telling us how many jobs they have brought to us. How is Indiana doing? Early 2006 numbers suggest 61,800 (a 2 percent increase) more people had jobs in ‘06 than in ‘05. That’s the biggest increase since 1995.
“But wait. If we look at the number of jobs reported by employers (rather than the number of persons saying they are employed) we find an increase in 2006 of only 20,800 jobs (0.7 percent) over 2005. [T]he difference between a change of nearly 62,000 in one series and nearly 21,000 in another may be hard to explain to a skeptical public.
“The Quarterly Workforce Indicators (QWI) tell us, by state and county, how many jobs have been added and lost during each three-month period. The QWI data are not easy to understand. They tell us that the state had 153,300 jobs created by new firms or firms expanding employment. The total number of persons leaving jobs because they quit or were let go for some reason was 548,200 and the number of persons hired for existing jobs was 463,500. The difference is 84,700 more than simple churning of employees.
“Until we can read this new QWI series accurately, I hope politicians will not cite these data as proof of their economic virility.”
But you know they will! How else can they get our votes? But enough with the high-falootin’ language. Let’s talk about lost statistical middle class incomes, a topic which should hit most of you close to home. These reports tend to support the contention of Professor Marcus that the figures lie:
Connersville, Indiana: auto parts supplier Visteon eliminates the last 890 from a total of 3,500 jobs. Cost to the community? The town could lose $4 million in taxes from the plant’s closing.
Morristown, Indiana: auto parts maker Collins-Aikman Products Co. will close its plant due to bankruptcy, tossing 240 workers off the job. Locations in Mexico and Canada were not impacted by the bankruptcy.
Syracuse, Indiana: the last 60 of 900 workers at the Dana Corp. will be unemployed by September.
Evansville, Indiana: Whirlpool Corp. fired 500 workers while Whirlpool supplier Collis Inc. shed another 160.
Muncie, Indiana: BorgWarner Automotive will shut their doors to the last 780 of about 5,500 workers in April.
The Hoosier State isn’t the only one having troubles. All across the nation, states are suffering manufacturing job losses, “the type that brought prosperity“.
Take Michigan, for instance. DaimlerChrysler plans to cut 5,300 jobs in southeast Michigan by 2009. Pfizer Inc. announced cuts of about 2,410 pharmaceutical jobs in Ann Arbor, Kalamazoo and suburban Detroit by the end of 2008. GM, Ford and Delphi Corp. are cutting tens of thousands of $30/hour jobs. Sweden-based Electrolux AB shipped its refrigerator assembly work to Mexico, costing 2,800 Greenville workers their visible means of support. Yamaha Corp. of America announced the closure of a musical instrument manufacturing factory and a warehouse in Grand Rapids.
Michigan has lost more than 300,000 jobs - mostly in manufacturing - since June 2000. Several counties in the region have unemployment rates near or above 10 percent. Thousands of former workers are returning to school, hoping to become qualified for some nebulous new employment. A new truck driver training program is especially popular. But forget about prison guard as a replacement profession! The Michigan Corrections Department is closing Southern Michigan Correctional Facility in Jackson and eliminating 460 corrections officers.
The “collateral damage” from all of these job losses is beginning to emerge. Dallas-based Dean Foods Co., makers of Stroh’s brand ice cream, will shut down its factory near Brewery Park in Detroit and lay off 29 people by April because
“We can’t find enough ice cream customers
to warrant keeping that plant open.”
Neighboring Ohio is also losing middle-class citizens to offshoring and outsourcing. 99 Ampac workers to be laid off in Kent, Ohio. Grocery chain Giant Eagle is closing its Kent store because “the store was unable to reach and maintain sales volumes necessary to operate profitably.” Dana Corp. announced plans to move 100 jobs out of 400 from Lima, Ohio to Mexico.
Newark, Delaware: DaimlerChrysler will cut 700 auto workers out of 2,100 from its landmark South College Avenue assembly plant, with another 400 supply chain jobs at risk. “They will never see jobs this good again,” said Alan Tonelson, a research fellow at United States Business & Industry Council in Washington, D.C. “Manufacturing is the only sector of the economy in U.S. history that has enabled working-class people to lead middle-class lives and have secure retirements. Agriculture didn’t do it and services can’t do it.”
Smyrna, Tennessee: Nissan hopes to reduce its workforce by 300. Temporary and contract workers have already been let go.
Frankfort, Kentucky: The Bendix Commercial Vehicle Systems plant closes later this year, eliminating 124 jobs. Topy Corp. makes steel and aluminum wheels for General Motors, Ford, Honda and Toyota. 250 of its 600 employees are to be laid off.
Waynesville, North Carolina: Dayco Rubber Co. gives in and closes the rubber mill which once employed more than 2,000 people since four months before Pearl Harbor.
As bad as the automotive manufacturing sector is, it isn’t alone. Furniture manufacturer Bassett Furniture Industries is closing its namesake plant and reduce its forkforce by 15 percent. It will be left with one wood furniture plant, one upholstery plant and one supply plant, all located in Virginia and North Carolina.
Bruce, Mississippi: 117 employees of Klaussner Furniture Industries will become unemployed by April 27.
Camillus, New York: They once supplied the American military with hand weapons and the Boy Scouts with campware, but Camillus Cutlery lost its edge and closed, down to zero employees from a peak of 700 in this village of 1,250 people.
Across the state, in Ellenville, New York, a rival of Camillus - Imperial Schrade - closed its knife factory two years ago and put hundreds out of work. Still reeling from that economic slice, Baltimore-based Hydro Aluminum brought in managers from headquarters to close the plant and add another 262 to the local unemployment rolls.
Glen Cove, New York: high-tech circuit-board maker Photocircuits Corp. is shutting down, idling 740 workers, some of whom will join the estimated 4000 homeless already roaming Long Island.
Thomaston, Georgia: Yamaha Corp. of America will close its manufacturing plant here. Combined with the Michigan closures mentioned above, 380 become unemployed.
Even Texas isn’t immune. In Waco, they need to pass out the Kleenex because Kleenex is passing out of Waco. The manufacturer of Kleenex, Kimberly-Clark, subtracts 85 jobs from Waco and adds them to India.
And, thanks to Homeland Security regulations, The Lodi Nut Company chose to close its store rather than curtail its tourist-friendly tours. “We have to monitor all the people who come in. That’s not too conducive to running a retail outlet,” complained owner Kelly Suess.
But not all of the news is bad. Agricultural chemical manufacturer Syngenta AG saw profits rise 12 percent through plant closures and employee terminations. Good to know that the rich are not being adversely affected by this exploding IED economy, right?
As for the rest of us, we get to fight over the bare bones of what remains. In Oregon there isn’t even enough to fight over.
But go ahead and get that degree, even if your prospects for doing something with it aren’t all that good. You might have gotten it from a fraudulent operation which didn’t train you for anything useful and still owe the loans you took out to pay for it. In the meantime, you could work for Wal-Mart or hit the jackpot should your former employer reopen the plant which laid you off and rehires you.
And conservatives could develop compassion for the less fortunate.
If you came here from Blogcritics, you can now hit the ‘back’ button to go back there and tell me how uninformed I am. Be explicit. Your comments make for a humorous respite for those in the unemployment lines.
April 12th, 2008 at 3:50 pm
Natalie…
From my background I never thought about it that way.