by Bill Onasch
As I was pulling together comments for the WIR on the recent AFL-CIO convention I got–and accepted–an invitation from my friends at Socialist Action to do an article for them. In the interest of space conservation I ask you to read it by clicking here.
Not A Grand Bargain
After a break for threatening war in Syria, and yet another debt ceiling crisis, the President managed to resume saying a few words about his Better Bargain for the Middle Class in a trip to my hometown. The venue was a new Ford stamping plant in suburban Liberty, not far from the big Kansas City Assembly plant in Claycomo.
Ford never asked for the massive government bailout loans granted to GM and Chrysler four years ago but they got plenty of state/local incentives for the new plant and upgrading at Claycomo. This fits in to the “Simplify the tax code for business” promoted in the Jobs section of the Bargain that includes “lower tax rates for businesses that create jobs in the U.S.; lower rates for new manufacturing jobs; cut taxes for small business.”
When the President took office he asked his party, then controlling both houses of Congress, to hold up on their campaign pledge to end the Bush tax cuts that favored corporations and the rich and famous. Echoing the GOP minority, labor’s new friend said recession was no time to raise taxes. The continuation of the Bush tax cuts clearly didn’t create enough jobs but they contributed to a mountain of cash for business Big and Small–and breathtaking increases in compensation for corporate executives. All this also helped swell the government’s debt.
Bosses hire workers when they are needed to generate profits. Ford expects to sell more cars and trucks so they are expanding a bit and hiring some new workers. While they are happy to accept tax-payer incentives for this standard business practice, tax breaks are not a decisive factor in hiring or firing–profits are.
The President has long urged U.S. manufacturers to bring home offshored work. Some have. General Electric restored some jobs to what’s left of its American appliance operations–after getting unions to accept a new wage tier that starts far below Middle Class rates and with substandard benefits. The Big Three automakers have boasted about similar “in-sourcing” after the 2007 UAW mother of all give-backs–later boosted still more at GM and Chrysler through the Obama imposed bankruptcy.
A recent New York Times article, U.S. Textile Plants Return, With Floors Largely Empty of People, illustrates the true depth of the Middle Class crisis. Filing her byline from South Carolina, Stephanie Clifford writes,
“Just as the Carolinas benefited when manufacturing migrated first from the Cottonopolises of England to the mill towns of New England and then to here, where labor was even cheaper, they suffered in the 1990s when the textile industry mostly left the United States….Which is why what is happening at the old Wellstone spinning plant is so remarkable. Drive out to the interstate, with the big peach-shaped water tower just down the highway, and you’ll find the mill up and running again. Parkdale Mills, the country’s largest buyer of raw cotton, reopened it in 2010….In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier. While the size of operations remain behind those of overseas powers like China, the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.”
While far above Bangladesh or even China rates, labor is still cheap by Middle Class standards in the Carolinas. But what is really attractive is how few workers are required as plants are built or reopened with the latest technology. Following up on her Parkdale example Clifford tells us,
“The mill here produces 2.5 million pounds of yarn a week with about 140 workers. In 1980, that production level would have required more than 2,000 people.”
Norma Rae wouldn’t have much of an audience if she stood on a lunch room table in the Carolinas today.
Certainly work offshored to Asia and Latin America has eliminated a substantial number of American Middle Class jobs. Palpable threat of offshoring is a powerful boss tool for extracting give-backs from North American workers. It remains an important option for employers. The example of textile so ably examined in the Clifford article shows how they weigh numerous factors in determining whether Made in America enhances the bottom line.
But the exponential growth in productivity of workers in this country is a much bigger factor in both job loss and depressed wages than shipping work abroad. The productivity gains cited by Clifford in textile use 1980 as a benchmark. The growth in worker output since the legal standard eight-hour day, forty-hour workweek was set by the Fair Labor Standards Act in 1938 is at least just as astronomical.
The permanent loss of millions of Middle Class jobs in steel, auto, coal, electrical, rail, longshore and other industries spawned many foolish pronouncements about the “de-industrialization of America.” The fact is the USA has remained the biggest industrialized economy ever since the World War II economic mobilization that ended the Great Depression. The economy has been restructured to churn out more than ever–with drastically fewer workers.
Part of the restructuring included strategically abandoning and replacing former bastions of unionism with new, smaller, scattered worksites that have successfully resisted union organization.
And even offshoring has been two-sided. As some American work is sent abroad there has been an explosion of plants of European and Asian companies in the USA, including in basic industry. These transplants have in fact done more hiring in this country than their American based competitors.
Productivity continued to grow substantially even during the period of 2007-2012, encompassing the Great Recession and Jobless Recovery. There was an annual average increase of just under two percent. These modest sounding annual increments compound like interest on a defaulted loan. It is remarkable, not to mention shameful, that workers are being squeezed to put out more than ever while there is still mass unemployment and millions more working part-time because they can’t find full-time work.
How society utilizes greatly increased productivity is a many sided and crucial question for the working class. I’ll continue on this topic next time.
Sweating the Truth
Robin McKie, science editor of the Guardian/Observer, opens a Saturday article,
“Scientists will this week issue their starkest warning yet about the mounting dangers of global warming. In a report to be handed to political leaders in Stockholm on Monday, they will say that the burning of fossil fuels and deforestation have now led to a warming of the entire globe, including land surfaces, oceans and the atmosphere. Extreme weather events, including heatwaves and storms, have increased in many regions while ice sheets are dwindling at an alarming rate. In addition, sea levels are rising while the oceans are being acidified – a development that could see the planet’s coral reefs disappearing before the end of the century.”
McKie goes on to say,
“The fifth assessment report on the physical science of climate change by the Intergovernmental Panel on Climate Change (IPCC) warns that humanity is on course over the next few decades to raise global temperatures by more than 2C compared with pre-industrial levels. Such a rise could trigger the release of plumes of the greenhouse gas methane from the thawing Arctic tundra, while the polar ice caps, which reflect solar radiation back into space, could disappear. Although the report does not say so, Earth would probably then be facing a runaway greenhouse effect.”
This scenario is not new but its plain statement and empirical updates by a body not known for jumping to rash conclusions is. Whether it will have the needed impact on government representatives assembling in Sweden is dubious.
Former Vice-President Al Gore, who did a good job in popularizing the threat of global warming through his award winning book and film An Inconvenient Truth, said in a recent e-mail,
“Today’s announcement by EPA Administrator Gina McCarthy is an important step forward for our nation and our planet. From now on, future coal- and gas-fired power plants must take responsibility for their global warming pollution by reducing or capturing their overall emissions. This is a critical achievement for President Barack Obama and his administration.”
This is Gore’s conflicted personae swinging back once more from science advocate to apologist for the ruling class in to which he was born and raised. The new EPA regulations are at best a very modest step that could have been taken under existing law during the Clinton-Gore administration. Emissions from power plants have already been incrementally reduced by widespread conversion from coal to marginally cleaner, and at least temporarily cheaper, natural gas.
Scams such as what used to be called carbon capture/sequester have long been dismissed by mainstream science. But they recently received artificial respiration from the Obama Energy Department. According to the New York Times, as much as eight billion dollars will be given to industries like coal and oil to make cleaner energy with “technologies that are too complex, unproven and expensive for investors and private companies to pursue on their own.”
There’s nothing complex or unproven about leaving fossil fuels in the ground and replacing them with clean, renewable sources provided free by nature wherever the sun shines and winds blow. The infrastructure required to utilize these fuels will require some expense. The political strategy needed to bring it about can be complex. The risk of not trying is unacceptable.
That’s all for this week.