Tuesday, June 3, 2008
The Demise of the US Industrial Middle-Class
Louis Uchitelle (NY Times, 4-20-2008) writes about the steady erosion of wages in US industrial labor, beginning with the steel industry in the 1970s and ending with US automakers replacing union workers with "second tier" hires. GM's recent move to eliminate union workers is only one step in a long race to the bottom. The author adds that use of temp workers, outsourcing, and shifting production to nonunion plants are common corporate tactics.
College promises to be the route back to middle class status for some--while others will sink into the lower class (IMF economists refer to this as "short-term adjustment costs"). Uchitelle adds "that roughly 15 percent of college-educated workers find themselves in jobs for which they are overqualified, the Economic Policy Institute reports, and many of these jobs pay less than $20 an hour." (Note: I would add that tactics used to undermine industrial laborers can be used effectively against white and pink collar labor also.)
In "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism", Kevin Phillips argues that the US reliance on capital markets instead of manufacturing is a key sign the US is losing dominance in the world economy. Guess we'll have to wait and see.