Salaries Could Be Squeezed For Some Time To Come

A new CBS MoneyWatch article confirms what Muskegon Critic pointed out the other day: Increased productivity does not translate into prosperity for average Americans.

In fact, MoneyWatch warns that a "combination of short-term factors and long-range changes may conspire to squeeze salaries for some time to come," and annual raises "could be in jeopardy."

So how did we get to this point? It turns out real wages have actually been flat for years.

Looking back, it turns out a decade’s worth of easy credit and faux real estate wealth obscured the fact that incomes for the majority of workers weren’t keeping up. After healthy salary growth of roughly 1.8 percent annually from 1995 to 2000, for example, inflation-adjusted, or real, wages for the median worker remained essentially flat from 2000 until 2007 when the recession started, according to government data (average wages increased roughly 2 percent, but that number is skewed by huge gains at the top). In fact, after the recovery in 2002, notes Shierholz, no real wage growth occurred at all for the median worker — despite an increase in productivity of 11 percent over the seven-year time frame. [emphasis added].

In other words, we've been working our tails off and have little to show for it. So who reaped the productivity gains?

Typically, companies and their shareholders.

And what do experts point to as the reason for our declining prosperity?

Shierholz and other economists attribute the disconnect between wages and output to declining unionization and the need to keep prices low in a competitive global environment.

The "kill the unions" and "outsource everything" crowd accomplished what they set out to do - drive wages down for average Americans. And the scenario for new jobs created doesn't look any rosier.

A 2009 analysis of figures from the U.S. Department of Labor showed that sectors that expanded through this decade have paid an average annual compensation of $55,300, compared with $65,100 for industries that are shrinking. This is partly because many of the newly-created positions are in service industries, which tend to be less organized and have less bargaining power. Think home healthcare and “green” jobs versus auto manufacturing and heavy industry.

In fact, six of the top 10 fastest-growing jobs are low wage.

There are steps Washington can take to start improving living standards for average Americans, but as long as people keep voting for anti-union, globalization embracing politicians, I don't see things changing.

Holiday Shopping Tips for Progressives

Happy Thanksgiving everyone! I wanted to pass along a few shopping tips before heading out to spend the holiday with family and friends.

If you're picking up a bottle of wine for your host or guests, consider buying Wine Spectator’s 2009 Wine of the Year: Columbia Crest’s Cabernet Sauvignon Columbia Valley Reserve 2005. According to FDL, members of the United Farm Workers helped pick the grapes. If you don't like red wine, check out these other labels that use UFW members (as well as other products like strawberries, dates, and almonds).

Moving beyond Thanksgiving to Black Friday, you can show your support for union workers by clicking here and checking out the box in the left upper corner to find union made products and services.

Or maybe you want to avoid naughty companies that force their employees to labor long hours under dangerous working conditions for poverty wages? Then Working in These Times advises you to read the "Shop With a Conscience Consumer Guide" from Sweat Free Communities, as well as this Sweatshop Hall of Shame 2010 report that highlights some of the big apparel and textile companies that use sweatshops in their global production. (Ikea, Abercrombie and Fitch, Wal-Mart, Hanes, L.L. Bean, and Kohl's among others.)

And from Michael Whitney at FDL comes this reminder about shipping your packages:

UPS is almost entirely union employees (Teamsters), with impressive wages, benefits and treatment for workers. FedEx, on the other hand, doesn’t even consider their employees to be employees, with meager pay, no benefits, no vacation days, and no respect. Check out this handy chart to see the stark difference between how UPS and FedEx treat their employees.

Finally, before heading out the door, you might want to check out Gizmodo, because no matter where it's made and who makes it, some "deals" really aren't deals at all!

(I'm so thankful my family likes gift certificates and cash. It makes life much simpler.)

Good Corp, Bad Corp

Kudos to the Country Fresh Dairy in Grand Rapids for respecting the hard work of their employees.

On October 3, Local 386 members employed at Country Fresh Dairy in Grand Rapids, Michigan, ratified a new contract. The new agreement increases wages and pension benefits, while protecting health care coverage and increases sickness and accident and life insurance coverage. [...]

The five-year contract contains wage increases totaling 11 percent over the course of the agreement, and the company’s contributions to the employees’ RWDSU pension will increase by $2 per week each year. By the last year of the contract, the company will be contributing $80 per week to the plan.

I've always liked and bought Country Fresh products, and now I have another reason to remain a loyal customer. Not only do I help the company's profits, but I help the 156 employees who overwhelmingly voted to ratify the contract.

The polar opposite of Country Fresh is Boeing. The company decided to put a new assembly line for the 787 Dreamliner in South Carolina. Boeing claims they chose right-to-work South Carolina in part "because of frustration with labor strife in Seattle, where four strikes in the past 20 years by the machinists union delayed deliveries." However, according to the Seattle PI, the union offered a 10-year, no-strike contract and was willing to discuss a longer agreement to get Boeing to commit to locating the second 787 line in Everett, Washington.

And this little tidbit from the same article is infuriating:

Boeing already took billions in tax credits and handouts... Now, the company is taking the jobs promised by the 787 program and leaving Washington workers and taxpayers high and dry.

What's the company getting from South Carolina? A package that eliminates income and other taxes for a decade and the state will provide low-interest construction bonds.

The problem with all these incentives according to this journalist is that they're a downward spiral on our race to the bottom.

Of course the problem isn't a lack of "commitment" to the aerospace industry in a region where generations of workers have devoted their lives to making Boeing planes. The problem is that people in Washington just don't come as cheap. We have this bad habit of paying people a decent wage, and providing good unemployment pay and benefits for people who are injured on the job--all things that apparently must change if we're to be competitive.

But then, if you consult the advocacy groups trying to insure the "competitiveness" of South Carolina, they say the same thing. "South Carolina's workers' compensation costs are the highest in the Southeast for small business" frets the South Carolina Civil Justice Coalition, a group that works to improve the business climate in Boeing's new home. They won't be satisfied until South Carolina's "climate" has been made as cheap as Georgia's, Tennessee's, and Virginia's.

And on down it spirals. It's not a winnable game, not if we want to keep any allegiance to our own values. In a few years, Boeing will be playing S.C. off Mississippi.

Boeing could learn a few things about values from Country Fresh.


(Cross-posted at Blogging for MI.)

The Crime No One Talks About - Wage Theft

I haven't had much time to read lately, but Kim Bobo's book, Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid - And What We Can Do About It, will be the next one I pick up. Bobo is the Executive Director of Interfaith Worker Justice.

Here's a short synopsis from Joe's Union Review:

Bobo says wage theft in America is the crime wave no one talks about, and she is right. Billions of dollars' worth of wages are stolen from millions of workers in the United States every year. The scope of these abuses is as staggering as it is wrong - paying workers far less than the legal minimum wage, purposefully misclassifying employees as independent contractors, and illegally denying workers overtime pay. But now people are starting to take notice -- and it is my hope that they do so starting with this very good book.

Chapter 5: Organizing to Stop Wage Theft: Why Unions Matter, starts with a story of 39 year-old Mercedes Herrerra. She came to this country from Mexico, lives in Houston since 1994 and works as a janitor for staffing agencies cleaning buildings and sports facilities. Bobo says she was never paid for overtime!

Her employers would tell her, "There is no overtime. After 40 hours you work for someone else." (This is not legal).

The story continues that after Hurricanes Katrina and Rita, the worker was hired by a cleaning firm contracted to clean the Reliance Center. She was in charge of keeping the bathrooms clean. Her staffing agency charged her $100 per week for her shoes, gloves, masks, cleaning supplies, and shuttle rides to the Center. She wasn't told when she was hired that such charges would be taken from her paycheck. As a result, her hourly wage fell significantly below minimum wage. (This is not legal).

The lower paid workers in our country are treated like crap. Union activists have been saying this for a long time. Some claim we blow it out of proportion or distort the reality -- for Herrerra, according to Bobo, worse than the wages stolen was her ill treatment. Managers would scream at her and her colleagues. Some would tell workers they were old and worthless.

You can read more here and here. Ted Kennedy has said the book offers "bold, practical, and progressive solutions for how policymakers and advocates can end the growing crisis of wage theft in America."

(Cross-posted at Blogging for MI.)

Buy It Here; Build It Here

USW President Leo Gerard is a soft-spoken man, but he has some blunt words about General Motors restructuring plans:

The proposition General Motors has presented to the United Auto Workers and American taxpayers in its latest restructuring plan is simple: You must pay for your own execution.

GM, which already took $15.4 billion in bailout money, wants another $11.6 billion and is offering in return this deal: It will close 16 of its American manufacturing plants, terminate 21,000 of its factory workers and double the cars it builds in low-wage Mexico, China and South Korea and ships back to the U.S. to sell.

There it is: GM is demanding that Americans pay to send their own jobs overseas.

In the world where corporate executives live, the one in which boards of directors grant CEOs multi-million dollar bonuses even after companies tank, maybe that’s not a perverse proposition.

But in the world where real Americans live, we’ve had enough of this crap. Decades of foolish tax and other federal policies that encouraged American manufacturing firms to throw Americans out of work and expatriate were bad enough. To expect American taxpayers to bankroll GM’s plans to layoff American workers and move their jobs overseas goes too far.

Gerard goes on to point out that this isn't just about the UAW or GM. This is about American manufacturing and the millions of people in good-paying jobs who depend on the auto industry - steelworkers, rubber workers, glass workers, healthcare, education, retail - a total of more than 7 million people.

What will we be left with if manufacturing dies? "America is in danger of attempting to subsist on an economy based on nothing more than amorphous derivatives, credit default swaps and Ponzi schemes." Manufacturing jobs helped millions of people achieve the American Dream and that dream is now under assault.

In just the past eight months of this recession, caused in huge part by recklessness on Wall Street, this country has lost 1.2 million manufacturing jobs, according to the U.S. Department of Labor. GM cannot take tax dollars to slash more. Former U.S. Labor Secretary Robert B. Reich agrees. Here’s what he told the Washington Post, “. . . it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?”

Gerard says, "We have no intention of buying our own noose. We intend to win this fight." He's being joined in that fight by Sen. Debbie Stabenow, the Rev. Jesse Jackson, actor Danny Glover and Lansing Mayor Virg Bernero, as well as the USW, the Alliance for American Manufacturing, and the Mayors and Municipalities Automotive Coalition, among others. They're conducting an 11-state, 32-city protest bus tour: “Keep it Made in America.” The idea is simple. If we buy it here, we should build it here, which Gerard points out is not impossible for a U.S. auto company to do.

Ford Motor Co., which is not taking any bailout money, is investing $500 million in retooling its Michigan Truck plant outside Detroit so that it can make small cars that it will sell worldwide, including its next-generation, battery-electric Focus. And Chrysler, which is getting bailout money, has made a deal with Fiat under which the Italian car company will manufacture a small car in one of Chrysler’s U.S. assembly facilities, which, along with other long-term commitments, will eventually create 4,000 U.S. jobs.

At each stop along the tour, people are being asked to sign their petition supporting "Buy it here; build it here." Please click over and add your name too. They'll present the petitions at a teach-in conference in Washington, D.C. on May 19 when they'll explain to elected officials why GM’s plan fails America and why they must require GM to submit a new plan supporting American jobs.

Gone are the dark clouds that had me blind

My apologies to Bob Marley for stealing a line from his song for my title, but it so perfectly fits how I feel. Keith Olbermann, Rachel Maddow and now Ed Schultz. They're like sunshine breaking through the fog. We've been fed misinformation from an industry dominated by conservative voices for far too long, and I feel like the dark clouds are finally starting to lift.

In case you're not familiar with him, Schultz has one of the top-rated progressive shows on radio, “The Ed Schultz Show,” which airs live weekdays from noon to 3 p.m. with a weekly audience of more than 3 million listeners on 100 stations across the country. He's an avid voice for the middle class and Ed is now on MSNBC. “The Ed Show” airs Monday through Friday from 6-7 p.m.

Yesterday, Schultz featured SEIU's Stephen Lerner to talk about the importance of employee free choice and Ed didn't hold back. He said he has an issue with centrist Democrats who aren't going to bat for the middle class. Me too.

Here's video from last night's show to give you a sense of Ed's tenacious style.

Unions Can't be Blamed for Job Losses

How do the right-to-work cheerleaders explain this? Using the February numbers, five of the 10 states with the biggest growth in unemployment are in the South.

State and percent increase in jobless rate since recession began (with current unemployment rate in parentheses)

1. North Carolina: +6 (10.7% -- 4th highest in country)
2. Oregon: +5.4 (10.8%)
3. Rhode Island: +5.3 (10.5%)
4. Nevada: +4.9 (10.1%)
4. Indiana: +4.9 (9.4%)
4. Florida: +4.9 (9.4%)
7. South Carolina: +4.8 (11% -- 2nd highest in country)
7. Georgia: +4.8 (9.3%)
9. Alabama: +4.7 (8.4%)
10. Michigan: +4.6 (12%)

Source: Bureau of Labor Statistics, via Wall Street Journal

The Institute for Southern Studies says unions can't be blamed for these losses.

One interesting point about those high unemployment numbers in the South: They certainly appear to disprove the argument, put forward by opponents of the Employee Free Choice Act, that unions cause higher unemployment.

The Carolinas -- which have among the lowest union density rates in the country -- have also seen some of the largest growth in joblessness.

This suggests that, as many other studies have found, unemployment rises and falls due to a vast array of changes in the economy -- and can't be pinned on unions.

So much for the idea that right-to-work (for less) laws give states a competitive edge.

FedEx Blackmails Congress

This smacks of corporate terrorism. (h/t TPM)

FedEx could cancel contracts for $10 billion in American-made planes if Congress makes it easier for unions to organize the delivery giant's workers.

In a Securities and Exchange Commission filing, the Memphis-based company disclosed that purchases of Boeing 777s are contingent on FedEx Express' continued coverage by the National Railway Labor Act.

The disclosure serves as a warning shot to lawmakers seeking to put FedEx Express workers under the National Labor Relations Act, a move seen as helping the International Brotherhood of Teamsters.

"It's FedEx political hardball at its finest," said analyst Donald Broughton with Avondale Partners. In a research note Monday, he wrote: "We see FedEx's action as a deft political move that aligns the interests of Boeing and GE with FedEx, and pits the interests of the Teamsters against the interests of the machinist and several other trade unions."

FedEx is threatening to buy French-made Airbuses to upgrade its fleet instead. Why does corporate America hate our country and its workers?

UPDATE: FedEx isn't the only corporation that likes to play hardball. Via Washington Monthly comes information about a recent WSJ article. It basically says banks sent the following message to President Obama after Congress moved to tax their bonuses:

When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation, Wall Street executives say. Several big firms called Treasury and White House officials to urge a more reasonable approach, both sides say. The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.

Real patriotic, huh? These bankers ruined our economy, put people out of work and literally on the street, and they still want to call the shots. And they wonder why Main Street is so outraged.

UPDATE 2: I should clarify that I interpreted FedEx as threatening to buy Airbuses because of something I read on Wikipedia:

FedEx Express was to have been the launch airline for the Airbus A380 freighter, having ordered ten for delivery between 2008 and 2011 with options on ten more. The company had planned to introduce the first aircraft into service in August 2008 for use on routes between hubs in the United States and Asia. Faced with A380 delays of more than two years, FedEx canceled these orders[20] and replaced them with an order for fifteen Boeing 777 freighters with an option for fifteen more, to be delivered from 2009 through 2011. FedEx has said that Airbus will allow it to transfer its nonrefundable deposits to purchases of future aircraft, and has stated it may consider the A380F when the A380 program is less affected by construction delays. In December 2008, FedEx posponed delivery of some of the 777s: four will be delivered in 2010 as previously agreed, but 2011 deliveries will be only four, rather than the 10 originally planned. Five more will arrive in 2012, and two in 2013.[21] In January 2009, FedEx exercised its options to buy 15 more 777 freighters and acquired options for a further 15.[22]

What better way to wiggle out of their contract, slam the unions and get those planes they previously wanted from Airbus?

Gallup: Majority Support Employee Free Choice Act

The latest Gallup Poll shows that 53 percent of respondents favor a new law that would "make it easier for labor unions to organize workers" versus 39 percent of respondents who oppose such a law. This is amazing support considering the efforts big business is taking to fight it.

Citibank, BOA, Wal-Mart, Burger King, and a couple hundred other U.S. Chamber of Commerce companies are prepared to spend $200 million on advertising and lobbying to block the Employee Free Choice Act. They're also saying some pretty strange things in the process, according to economist Dean Baker.

Recently, they have sought to promote the argument that unions lead to higher unemployment. To help push this case they have been circulating a study that examines differences in unionization rates and unemployment among Canadian provinces. This study purports to find that a 3 percentage point increase in unionization rates leads to a 1 percentage point increase in unemployment. Based on this study, the opponents of the Employee Free Choice Act argue that any resulting increase in unionization will cost millions of jobs.

This propaganda is actually being pushed by "something called the Alliance to Save Main Street Jobs" — an alliance that happens to include that bastion of "Main Street," the U.S. Chamber of Commerce."

Baker questions their reasoning:

Of course the immediate response might be to ask, if this study's findings are accurate, why Canada's unemployment rate isn't 7 percentage points higher than the U.S. rate? Canada's unionization rate is about 20 percentage points higher than in the U.S., yet its unemployment rate is somewhat lower.

He also goes on to point out that there's a large body of research on this topic, and the most recent research finds no link between unemployment and unionization rates.

In 2006, the Organization of Economic Cooperation and Development (OECD) did an exhaustive analysis of the research on this topic and concluded that there was no link between unionization rates and unemployment. It is easy to find examples of countries with very high unionization rates and low levels of unemployment. For example Norway and Denmark have unionization rates near 80 percent. Before the current crisis their unemployment rate was under 3.0 percent.

Of course we don't have to go overseas to prove the case that unions don't lead to unemployment. If we go back 40 years, the unionization rate was over 30 percent. Presently, it is just over 12 percent. In the 60s, the unemployment rate fell as low as 3.0 percent and was below 5.0 percent for most of the decade.

Unions don't lead to higher unemployment, but the act of unionizing can lead to firings. According to the Center for Economic and Policy Research, "our estimates suggest that almost one-in-five union organizers or activists can expect to be fired as a result of their activities in a union election campaign. Since 2000, illegal firings have marred over one-in-four NLRB-sponsored union elections, reaching 30 percent of elections in 2007."

That's why we need to pass the EFCA. It would strengthen penalties for companies that coerce or intimidate employees when they try to form a union, but more importantly, it would help revive America's middle class. And that's what scares corporate America. They want all the profits for themselves.

(To learn more about the EFCA, read Citizen K's excellent post on the subject. His money quote: "Passing EFCA is not only an important step for unions and employees who want to unionize, it's an important step for anyone with a job.")

Labor Gets an Early Christmas Gift

This is a good argument in favor of unions. h/t Kevin Drum

Felix Salmon, after noting that FedEx has announced across-the-board pay cuts for just about everyone:

There's been a huge shift in power in recent years from labor to capital: corporate profits have been rising much faster than wages for some time now. It makes sense that capital would make use of its newfound power to reduce labor costs in a deflationary environment of rising unemployment. During the boom, companies laid off workers because those workers demanded, and cost, too much money. Now that workers have lost their negotiating leverage, we might start seeing more across-the-board pay cuts.

Drum summed it up perfectly: Heads I win, tails you lose! In boom times you get laid off, in slack times you get your pay cut.

Labor may finally be gaining an ally in Washington. Rep. Hilda Solis of California will be nominated as labor secretary by President-elect Barack Obama. Solis co-sponsored the Employee Free Choice Act in the 110th Congress and earned a 100% rating from the AFL-CIO last year.

Maybe there really is a Santa Claus after all.

(More on Solis at BFM.)

Thanks for nothing, senators

Author and Free Press columnist Mitch Albom wrote a response to the senators who killed the auto loan deal last week and it's generating a lot of attention here in Michigan. (It's been recommended more than 1,000 times so far.) He pretty much expresses the collective outrage most of us have been feeling since Friday, starting with the title - Hey, you senators: Thanks for nothing.

Here's a sample of what Albom had to say. Click over to read the rest.

Kill the car, kill the country. History will show that when America was on its knees, a handful of lawmakers tried to cut off its feet. And blame the workers. How suddenly did the workers — a small percentage of a car’s cost — become justification for crushing an industry?

And when did Detroit become the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?

In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that YOU failed to regulate, how on earth do WE need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms, why do WE need to be schooled on how to run a business?

Who is more dysfunctional in business than YOU? Who blows more money? Who wastes more trillions on favors, payback and pork?

At least in the auto industry, if folks don’t like what you make, they don’t have to buy it. In government, even your worst mistakes, we have to live with.

Ain't that the truth. Remember Iraq, senators? That was supposed to be cheap, and quick too. The only thing cheap about that mistake was the way you tried to cut corners and save money at the expense of our troops. From inadequate bullet proof vests and armored trucks to the horrid conditions at Walter Reed Hospital, you turned your backs on the soldiers just like you turned your back on middle-class jobs last week.

And don't try to sell us the idea that your vote was designed to protect taxpayer money. The same day the Free Press ran Albom's column, they also ran one by Susan Tompor describing the financially struggling Pension Benefit Guarantee Board, who may also find themselves needing a bailout. Allowing the Big 3 to fail would only add to the problem according to one expert:

He said that the PBGC could inherit more than $100 billion of pension obligations if Ford or GM filed for bankruptcy and the pension funds were turned over to the agency.

That $14-25 billion bridge loan is chump change by comparison. Add in unemployment compensation, increased Medicaid spending, the loss of tax revenues, etc., and that loan looks like a better deal by the moment.

Adding another 2-3 million people to the ranks of the unemployed is a huge mistake too. Obama wants to pass a stimulus package pushing $1 trillion dollars in order to create 2.5 million jobs, which won't even replace the jobs lost under the Bush administration. How does killing even more jobs help? Washington might as well double that package to $2 trillion if the Big 3 go down.

Thanks for nothing, senators. Do me a favor and take Albom's advice.

You’re so fond of the foreign model, why don’t you do what Japanese ministers do when they screw up the country’s finances?

They cut their salaries.

Or they resign in shame.

In order to resign in shame, these senators would have to feel some shame first. And in order to feel shame they would have to care. They don't.

How will the Big 3's cries for help be answered?

Tom Walsh has a very thoughtful column at the Free Press that reminds certain GOP senators of the Big 3's response after Hurricane Katrina:

...the automobile companies of Detroit did not harrumph that the Gulf Coast should have been better prepared.

They didn’t sit back and wait for New Orleans to submit a detailed plan for future repair of the ruptured levees.[...]

Between them, the three Detroit auto companies gave more than $18 million in cash and vehicles to the Katrina relief effort in the ensuing months. No strings attached.

That's just one example. Detroit's Big 3 are known for their charity and generosity in communities across our country. Now its their turn to ask for help. Before you just brush them off and say no, consider what else Walsh had to say:

If you see a fellow American is drowning, gasping for air, do you quiz him for awhile about whether he’s drunk or why he never learned to swim better? Or do you throw him a lifebuoy and ask questions later?

That, it seems to me, is where we are with America’s car companies.

You can do nothing and watch them die, senators.

Or you can rush in immediately with emergency aid – as GM, Ford and Chrysler did in the case of Hurricane Katrina, and after the Sept. 11 terrorist attack, and during countless other disasters.

And you can hold their feet to the fire afterward, empowering a strong auto czar to make sure they do what’s needed to withstand future shocks.

Millions of lives are hanging in the balance, senators, including those of children, seniors and others who rely on the workers for their incomes. Please consider them when you make your decision. This is about more than unions or poorly managed companies. This is about families. They don't deserve to have their feet held to the fire.

“The quality of mercy is not strained, It droppeth as the gentle rain from heaven, Upon the place beneath: it is twice blest, It blesseth him that gives and him that takes.” - William Shakespeare's The Merchant of Venice.

(Cross-posted at Blogging for MI.)

The legacy of WWII veterans

Today is the anniversary of Pearl Harbor and the Flint Journal observed it by telling the story of one man who survived the attack, Staff Sgt. Ward Anderson of Chesaning.

It was 7:55 a.m., Dec 7, 1941 and Anderson and some friends had just left church and were thinking about going to the PX for breakfast.

Suddenly planes appeared overhead, flying low and loud. The men didn't pay much attention at first.

"We thought it was probably Navy maneuvers," said Anderson, then 20.

Then they noticed "big red suns" painted on the planes' wingtips: The Rising Sun emblem of Japan.

"I said, 'Oh, hell,'" Anderson said. "Or probably something worse."

Anderson counts himself lucky to have survived the first foreign attack on U.S. soil, which claimed the lives of more than 2,000 and pulled America into the second World War -- 67 years ago today.

His service to our country does not go unnoticed. Anderson wears his "Pearl Harbor Survivor" hat while out in his community and he's often approached by grateful people, rightly so, but we shouldn't let this day pass by without recognizing the sacrifice and service of an industry that has been maligned quite a bit lately - the Big 3. The Detroit News stepped up and recognized them in an editorial today: Remember the Arsenal of Democracy

We note with considerable irony that today, as the fate of Detroit's automakers rests in the hands of Congress, the nation marks the 67th anniversary of the Japanese bombing of Pearl Harbor.

In the days after that attack, as the nation geared up for war, the federal government turned to Detroit's automotive industry and asked it to convert its factories to produce military hardware.

In a matter of weeks, Ford, Chrysler, General Motors and the other automakers of the time were churning out tanks, planes, Jeeps and other machinery of war. They stopped making passenger cars and turned their full energies toward defending the nation, and agreed to only a minimal profit for their work.

When America's survival was on the line, Detroit didn't ask questions; it pitched in with all its industrial might to save the country. The Big Three's survival is now on the line. We hope Congress remembers the sacrifice the auto industry has made for America and considers carefully whether it would ever want to go into a war of that magnitude again without the Arsenal of Democracy.

I hope Congress also remembers the survivors of WWII, who came home after the war and worked in factories across the country to build a better future for their children and grandchildren. Unionization grew to one-third of the workforce, every income group grew (incomes grew fastest for the lowest-income Americans) and most middle-class Americans had good health care and could look forward to a secure retirement.

The "Greatest Generation" fought in WWII because it was the right thing to do, and they came home and fought for shared prosperity and better living standards for everyone because that was the right thing to do too. As Americans, we honor them by fighting to protect what they worked so hard to give our country.

The Problems Facing Big Three Belong to All of Us

Finally. A journalist with some common sense comes to the Big Three's defense. Thank you, Warren Brown.

According to the MOP [Mob of Pundits] crowd, American car companies have messed up -- making too many trucks and sport-utility vehicles, ignoring consumer and governmental demands for more fuel-efficient vehicles and, as Will stated in a column last week, entering "improvident labor contracts" with the UAW.

It's baloney.

Americans went truck crazy in the 1990s and in the early years of this century, making light trucks more than 50 percent of new vehicles annually sold in this country, for the same reason they are in danger of re-embracing that madness -- cheap gasoline. They were enabled by lawmakers who, with one hand, pushed car companies to increase technical fuel efficiency while using the other to give American consumers the least-expensive gasoline in the developed world.

Increased technical fuel efficiency plus low-cost gasoline fueled consumer demand for more driving and bigger and more powerful vehicles with which to do that driving. Gasoline consumption in the United States soared . . . until high fuel prices restored some sanity to the U.S. consumer automotive market.

As Brown reminds us, Honda, Nissan, Toyota and even Mercedes-Benz all had some kind of truck or SUV too because they were following "market demand." Nobody twisted our arms and forced us to buy the gas guzzlers.

What about the critics who say, "but look at that fuel-efficient, gas-electric Toyota Prius hybrid?"

Go ahead and look at it, preferably in Japan, where the Ministry of International Trade and Industry (MITI) has done a marvelous job of coordinating industrial and energy policy into a vehicle development and consumption strategy that makes sense. We have no such government-industry cooperation in the United States. We have no industrial policy, no energy policy, which largely is why we now have a core segment of our natively owned manufacturing infrastructure teetering on the brink of collapse.

Furthermore, Brown points out that European and Asian countries tax horsepower. The least-efficient motor fuels are taxed heavily, while favorable treatment is given to more efficient fuels, such as diesel.

That cost-sharing creates a kind of honesty. Car companies aren't inclined to design, develop and produce gas-guzzlers because European and Asian consumers are not inclined to buy them. It creates market predictability, contrary to what we have in the United States, where vehicle markets can flower or wither in an instant, depending on the price of fuel.

What did Brown have to say about the unions?

It is the rankest hypocrisy for well-paid journalists to decry the "high" pay of UAW-represented employees. I doubt that there is one UAW critic in the media, or on Capitol Hill, who would be willing to settle for a UAW paycheck. I'm almost certain there isn't one who would be willing to trade his or her relatively cushy employment for a year on an auto plant assembly line.

Criticism of "improvident labor contracts" thus smacks of class bias. It reeks of the notion that some work, such as that involving manual labor, inherently deserves less compensation than others, such as expressing one's opinion. It's more baloney.

Brown doesn't excuse the Big Three and he admits they've made mistakes, but he also points out they've done many things right - "contributing to the defense of this country; helping to create a viable middle class, especially in America's minority communities; and contributing to technological advancements in the global automobile industry."

The bottom line: "The potential failure confronting GM, Ford and Chrysler is not Detroit's alone. It belongs to all of us."

The solution to this problem belongs to all of us too - consumers, domestic automakers and the government. We have to keep pushing for meaningful energy policies regardless of the price of gas and we have to demand industrial policies that level the playing field for our domestic automakers and workers.

Think losing the Big 3 will be a mere blip? Think again.

Why is Paulson allowing this kind of wheeling and dealing to take place with the $700 billion dollar bailout fund? It should be used to help save the jobs of hundreds of thousands of auto workers, who also happen to be productive, taxpaying consumers. You know, the same consumers Bush called on after 9/11 to help keep the economy going.

What a double-standard, one that could very well touch your life or that of someone you know. Watch the video and you'll get a good idea of just how many people's lives are affected by Detroit's auto industry.


I wanted to mention those $71 dollar an hour autoworker wages and benefits the papers keep talking about. What they don't tell you is those figures are based on old contracts and include the projected cost of lifetime health care and pensions. Under a new contract negotiated last year, union employees will make considerably less than that, some as little as $14 per hour, and benefits have been reduced too. (Another reason we should have universal health care.)

Union workers aren't the fat cats the media makes them out to be. In fact, UAW members are actually losing their edge against foreign automakers. From the Detroit Free Press, February 2007:

Workers for foreign automakers don't pay union dues, but they do share the costs of insurance and retirement plans. UAW-represented autoworkers get health insurance and a full pension after 30 years -- valuable perks they will fight to keep during contract negotiations this year.

But even accounting for Toyota employees' health care spending -- $700 per year on average, according to the company -- the [Toyota] Georgetown workers still made more in 2006.

General Motors Corp., which lost $10.6 billion in 2005 and didn't issue profit-sharing checks last year, paid its production workers an average of $27 an hour, GM spokesman Daniel Flores said. That would be a base of about $54,000 a year, based on a 2,000-hour work year. The $30 average at Toyota's Georgetown plant, which includes a bonus, equals $60,000 a year.

Ford Motor Co. and Chrysler Group representatives said GM's base pay figures are similar to theirs. Only Chrysler, which had a 2005 profit, paid a bonus last year. The $650 bonus was not enough to surpass Toyota's pay. [...]

Assembly workers for Detroit automakers last year remained a bit ahead of Honda's U.S. hourly workers, who made an average $24.25 an hour, or $26.20 with the $4,485 bonus they received. In November, Honda paid bonuses for the 21st consecutive year, the longest streak in U.S. auto history, said Ed Miller, Honda spokesman.

Nissan workers are paid $24 an hour in Mississippi and $26 an hour in Tennessee, but company officials would not disclose employee bonuses.

Hyundai Motor Co. pays its U.S. production workers less than other automakers. Wages at its Alabama plant start at $14 an hour and grow to $21 an hour after two years on the job, according to a January 2004 company release.

Detroit's automakers have been shedding workers by the thousands over the past decade and the average wages will continue to fall, but the difference between union and non-union autoworkers isn't as vast as the media makes it out to be. In fact, by 2011, Toyota's labor costs could exceed the Big 3 because they've been here for 30 years now and a growing number of their workers are paid top wages.

The domestic automakers are competitive with foreign ones, but they currently find themselves in trouble not of their own making. Credit has dried up, people can't get loans, and cars aren't selling. Don't blame the middle-class auto workers, blame those highly compensated Wall Street and Washington types who made a mess of things.

UPDATE: Dean Baker did a better job of clarifying claims that GM auto workers are paid $70 an hour than I did: "The trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs."

Millionaire McCain doesn't care about average Joe

McCain didn't even try to hide his contempt for the middle-class when CNBC's Maria Bartiromo interviewed him yesterday. When asked about the Employee Free Choice Act, McCain said he would veto it “in a New York minute.”

I will do everything in my power to block such legislation. And imagine, Sen. Obama and Nancy Pelosi and Harry Reid pushing the union agenda, it would be very, very, very unfortunate.

Got that? McCain will do everything in his power to prevent you from having a job with good wages, health care and a retirement plan.

The Employee Free Choice Act would level the playing field for workers who say they'd join a union if they could, and there's a very good reason our young people may want to do just that - Unionization Substantially Improves the Pay and Benefits of Younger Workers.

According to the Center for Economic and Policy Research, a large wage and benefit advantage exists for young workers in unions relative to their non-union counterparts, and younger workers are earning about 10 percent less than their counterparts did in 1979, despite impressive gains in young workers' educational attainment over the same time period.

The report, "Unions and Upward Mobility for Young Workers," found that young unionized workers - those age 18 to 29 - earned, on average, 12.4 percent more than their non-union peers. In addition, young workers in unions were much more likely to have health insurance benefits and a pension plan.

The report, which analyzed data from the Census Bureau's Current Population Survey (CPS), found that unionization raises the pay of young workers by about $1.75 per hour. According to the report, young workers in unions were also 17 percentage points more likely to have employer-provided health insurance and 24 percentage points more likely to have an employer-provided pension plan than young workers who were not in unions.

Unionized workers in typically low-wage occupations benefited too.

Among young workers in the 15 lowest-paying occupations, union members earned 10.2 percent more than those workers who were not in unions. In the same low-wage occupations, unionized young people were 27 percentage points more likely to have employer-provided health insurance and 26 percentage points more likely to have a pension plan than their non-union counterparts.

Union jobs provide decent wages, health care and retirement security in return for our hard work. So, who really cares about the middle-class? Barack Obama said he will sign the Employee Free Choice Act. John McCain said he would veto it “in a New York minute.” That puts him at odds with the middle-class and those young people struggling to have a decent life. No wonder they're overwhelmingly siding with Barack Obama.

American Axle strike paid off for one already rich man

Remember the American Axle strike earlier this year? Workers settled after 11 weeks for a contract that cut wages as much as $10 an hour, froze pensions for those with less than 20 years seniority, and scheduled two plants for closure.

Union workers ratified the contract, but the fallout continues:

American Axle & Manufacturing Holdings Inc shares surged 10 percent on Wednesday after analysts said the parts supplier plans to eliminate about 670 salaried jobs on top of factory job cuts now underway.

Analysts at Lehman Brothers and JPMorgan said in research notes that hourly headcount cuts will be accompanied shortly by white-collar cuts at a three-to-one ratio, citing a meeting with American Axle's executives late on Tuesday.

There was one person who came out smelling like a rose. [my emphasis]

American Axle and Manufacturing Holdings Inc. Chairman and CEO Richard Dauch has been awarded an $8.5 million bonus in part for leading the auto parts supplier through a bitter strike.

The bonus revealed Friday in a filing with the Securities and Exchange Commission is in addition to his earlier reported 2007 compensation valued at $5.55 million.

And the rich get richer...


(Cross-posted at BFM)

Labor Calls for Strike Against the War

(h/t AlterNet)

Take note, John McCain: Labor is calling for a general strike against the war. Specifically, the Vermont AFL-CIO is throwing their support behind the International Longshore and Warehouse Union (ILWU), who announced it will shut down West Coast ports on May 1st to demand an immediate end to the war and the withdrawal of U.S. troops from the Middle East.

Here's the VT AFL-CIO press release [my emphasis]:

The Executive Board of the Vermont AFL-CIO, representing thousands of workers in countless sectors across Vermont, have unanimously passed an historic resolution expressing their "unequivocal" support for the first US labor strike against the war in Iraq.

Montpelier, VT - The Executive Board of the Vermont AFL-CIO, representing thousands of workers in countless sectors across Vermont, have unanimously passed an historic resolution expressing their "unequivocal" support for the first US labor strike against the war in Iraq. The strike, being organized by the Longshore Caucus of the International Longshore & Warehouse Union (ILWU), will seek to shutdown all west coast ports for a period of 8 hours on the day of May 1st 2008. The Vermont AFL-CIO is the first state labor federation to publicly back the Longshoremen; other state federations are expected to follow.

The resolution, among other things, calls the war in Iraq "immoral, unwanted, and unnecessary", states that the vast majority of working Vermonters oppose the war, and contends that the war will only be brought to an end by "the direct actions of working people." Many other Vermont labor unions and organizations, including the Vermont Workers' Center, have also made official statements condemning the war.

The resolution also calls on working Vermonters to "discuss the actions of the Longshoremen, to wear anti-war buttons, and to take various actions of their own design and choosing in their workplace on May 1st, 2008."

"Workers in Vermont and all across this nation are against this war. We have already demanded that the government end it, but they have consistently failed to heed our words. Therefore working people are beginning to take concrete steps to make our resistance known. If the war does not immediately end we, the unions and working people of Vermont, will also be compelled to take appropriate action," said David Van Deusen, a District Vice President of the Vermont AFL-CIO.

Traven Leyshon, President of the Washington, Lamoille & Orange County Central Labor Council, AFL-CIO, said, "Vermont labor has long called for an end to this war. The untold billions being spent on the war could instead be used to address our domestic needs. It is working people who pay the cost of the war - in some cases with our lives, but always with our sacrifices."

Labor looks out for us. The same can't be said for John McCain and friends.

You can read the full text of the resolution here.

(Cross-posted at Blogging for Michigan.)

Outsourcing a threat to workers and national security

As I wrote earlier in the month, the aerospace industry is sending jobs to Mexico - including those in airline maintenance.

At least one U.S. airline, Delta, is already sending entire planes to Mexico for maintenance work. In 2006, it signed a deal handing heavy maintenance of 120 of its planes over to Aeromexico, an airline.

My concern was for the number of good paying jobs being lost, but that pales in comparison to the security risk our country faces. Teamsters President Jim Hoffa explains [emphasis mine]:

The outsourcing of aircraft maintenance is another major concern—just ask the United Airlines mechanics and related workers. Some 9,300 of these skilled workers resoundingly chose to join the Teamsters last month because we understand the real danger the outsourcing of aircraft maintenance poses to national security.

From 1996 through 2006, major U.S. airlines' outsourcing expenses increased from 37 percent to 64 percent, and the number of foreign repair facilities grew from 344 to 698 over a comparable period.

As outsourcing expanded, regulatory standards and oversight have failed to keep pace. Background checks, duty-time limitations, and alcohol and drug testing are much more lax at foreign stations than they are in the United States. For example, supervisors and inspectors who sign off on maintenance work at foreign repair stations are not required to hold a Federal Aviation Administration repairman certificate or an airframe and power-plant certificate, and neither are mechanics working on the aircraft at these facilities.

Increased outsourcing is a domestic security risk. In the U.S., FAA-certificated repair stations have standards for personnel background checks and restricted access to aircraft. Foreign repair stations lack these precautions. Outside of our borders, only flimsy safeguards prevent a terrorist from exploiting an opportunity to do us harm by tampering with airline systems or inserting explosives into aircraft while they are undergoing maintenance. (Despite a mandate in 2003 to create a security standard for repair stations and audit foreign stations, the Transportation Security Administration has yet to do so.)

My son-in-law recently graduated from airline mechanics school after 22 months of studies. He's in the process of taking three written tests and two oral tests in order to receive his certification so he can work on planes. I should also mention his education was very expensive. That 22 month program cost him nearly as much as four years in college.

It just doesn't make sense for our country to mandate higher education and licensing requirements for jobs that we then turn around and allow employers to outsource without equal standards. Americans can't compete with the lower wages and now it appears we're fighting against reduced educational requirements. That's crazy. Why should our young adults spend thousands of dollars to get an education if a person in Mexico or some other country is allowed to do the job without any advanced training or certification?

We definitely need to level the playing field in this country so our workers can compete and our national security isn't compromised.

(Cross-posted at Blogging for Michigan.)

Martin Luther King, Jr. Died Fighting for Labor

Today marks the 40th anniversay of Martin Luther King Jr's assassination in Memphis. King died fighting for labor and a living wage. He was there to support municipal sanitation workers who were striking for better pay, benefits and working conditions. King didn't die in vain. The strikers did ultimately win their strike and receive better pay, benefits and working conditions, which helped lift millions of other Americans into the middle class. However, the AFL-CIO reminds us that for all the good that came from that strike, labor rights and economic equality have been losing ground (which we know all too well here in Michigan):

Over the past three decades, however, this situation has taken a turn for the worse as both the number of jobs in manufacturing and the number of unionized jobs have declined sharply. In 1979, for example, manufacturing accounted for nearly one-quarter of all jobs in this country and about the same share of the total workforce was in a union. Today, only about one-in-10 jobs is in manufacturing, and roughly 13 percent of the workforce is in a union or represented by one at their workplace. [...]

Meanwhile, probably the most important reason for the simultaneous drop in unionization was corporate America's deliberate decision to adopt a more hostile attitude toward unions. Many firms have relocated plants overseas or in states with little union presence as part of a conscious effort to evade unions. [...]

Employers also regularly violate other aspects of the NLRA designed to protect workers' freedom to form unions. Research... has estimated that one-in-five workers actively involved in organizing a union can expect to be fired in the middle of a union organizing election.

And here in Michigan we have the "right-to-work" crowd stirring the pot. These attacks on labor are discouraging, but as King often said, "We, as a people, will get to the promised land!”

In his lecture, "The Quest for Peace and Justice", King said...

Let me close by saying that I have the personal faith that mankind will somehow rise up to the occasion and give new directions to an age drifting rapidly to its doom. In spite of the tensions and uncertainties of this period something profoundly meaningful is taking place. Old systems of exploitation and oppression are passing away, and out of the womb of a frail world new systems of justice and equality are being born.

If Martin Luther King were alive today, I have no doubt he'd be openly critical of the economic inequality in our country. King believed all work has dignity and worth and it was a crime for people to live in this rich nation and receive starvation wages. It's up to us to continue his fight.