NEW YORK TIMES
December 23, 2008
OP-ED COLUMNIST
A Race to the Bottom
By BOB HERBERT
Toward the end of an important speech in Washington last month, the president of the American Federation of Teachers, Randi Weingarten, said to her audience:
“Think of a teacher who is staying up past midnight to prepare her lesson plan... Think of a teacher who is paying for equipment out of his own pocket so his students can conduct science experiments that they otherwise couldn’t do... Think of a teacher who takes her students to a ‘We, the People’ debating competition over the weekend, instead of spending time with her own family.”
Ms. Weingarten was raising a cry against the demonizing of teachers and the widespread, uninformed tendency to cast wholesale blame on teachers for the myriad problems with American public schools. It reminded me of the way autoworkers have been vilified and blamed by so many for the problems plaguing the Big Three automakers.
But Ms. Weingarten’s defense of her members was not the most important part of the speech. The key point was her assertion that with schools in trouble and the economy in a state of near-collapse, she was willing to consider reforms that until now have been anathema to the union, including the way in which tenure is awarded, the manner in which teachers are assigned and merit pay.
It’s time we refocused our lens on American workers and tried to see them in a fairer, more appreciative light.
Working men and women are not getting the credit they deserve for the jobs they do without squawking every day, for the hardships they are enduring in this downturn and for the collective effort they are willing to make to get through the worst economic crisis in the U.S. in decades.
In testimony before the U.S. Senate this month, the president of the United Auto Workers, Ron Gettelfinger, listed some of the sacrifices his members have already made to try and keep the American auto industry viable.
Last year, before the economy went into free fall and before any talk of a government rescue, the autoworkers agreed to a 50 percent cut in wages for new workers at the Big Three, reducing starting pay to a little more than $14 an hour.
That is a development that the society should mourn. The U.A.W. had traditionally been a union through which workers could march into the middle class. Now the march is in the other direction.
Mr. Gettelfinger noted that his members “have not received any base wage increase since 2005 at G.M. and Ford, and since 2006 at Chrysler.”
Some 150,000 jobs at General Motors, Ford and Chrysler have vanished outright through downsizing over the past five years. And like the members of Ms. Weingarten’s union (and other workers across the country, whether unionized or not), the autoworkers are prepared to make further sacrifices as required, as long as they are reasonably fair and part of a shared effort with other sectors of the society.
We need some perspective here. It is becoming an article of faith in the discussions over an auto industry rescue, that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.
That’s fine if it’s agreed to by the autoworkers themselves in the context of an industry bailout at a time when the country is in the midst of a financial emergency. But it stinks to high heaven as something we should be aspiring to.
The economic downturn, however severe, should not be used as an excuse to send American workers on a race to the bottom, where previously middle-class occupations take a sweatshop’s approach to pay and benefits.
The U.A.W. has been criticized because its retired workers have had generous pensions and health coverage. There’s a horror! I suppose it would have been better if, after 30 or 35 years on the assembly line, those retirees had been considerate enough to die prematurely in poverty, unable to pay for the medical services that could have saved them.
Randi Weingarten and Ron Gettelfinger know the country is going through a terrible period. Their workers, like most Americans, are already getting clobbered and worse is to come.
But there is no downturn so treacherous that it is worth sacrificing the long-term interests — or, equally important — the dignity of their members.
Teachers and autoworkers are two very different cornerstones of American society, but they are cornerstones nonetheless. Our attitudes toward them are a reflection of our attitudes toward working people in general. If we see teachers and autoworkers as our enemies, we are in serious need of an attitude adjustment.
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Wsws.org
Pay cuts, layoffs mount in US (and watch how the politicians bust their ass solely for the corporate interests, i.e., massive welfare for the bankers that caused this meltdown, but NO help for those foreclosed on!)
By Tom Eley
23 December 2008
The US government loans to the auto industry, conditioned on a massive attack on the wages and jobs of auto workers, are being used as a spearhead for broader attacks on the working class throughout the country. This attack has already begun, with numerous companies recently announcing pay cuts and layoffs for the coming year in response to the deepening economic crisis.
Many of the new pay cuts affect salaried positions. While cuts to the pay packages of top executives are largely designed to lend the impression of “shared sacrifice,” the salaries and pensions of wider layers of managerial and professional personnel—a large component of the US “middle class”—are being significantly reduced.
On December 18, FedEx Corp., one of the largest US parcel delivery services, announced plans to cut pay for more than 35,000 salaried employees. It will also indefinitely freeze its contributions to over 140,000 employee 401(k) retirement accounts. In announcing the pay cuts, Frederick W. Smith, FedEx founder and CEO, said that the corporation was “being challenged by some of the worst economic conditions in the company’s 35-year history.” Only one month ago the third largest US parcel delivery service, German-owned DHL, announced the suspension of its US operations and layoffs totaling 9,500 workers.
Caterpillar, the leading manufacturer of construction vehicles, has announced pay cuts ranging between 15 percent and 50 percent for all levels of management. It is also offering voluntary buyouts to its American workforce until January 12. Last week, Caterpillar announced 814 layoffs from its Mossville, Illinois, engine factory.
On Monday, Kemet Corp., a digital parts maker based in North Carolina, said it would cut pay for salaried employees by 10 percent percent beginning January 1 and will indefinitely suspend contributions to its 450 workers’ 401(k) retirement plans. It will also make permanent cuts to insurance benefits for its retirees and fire 1,500 workers in China, Europe, and Mexico, the Greenville News reported.
Last week, Motorola Inc. announced plans to freeze salaries and suspend payments to employee retirement accounts, and Agilent Technologies Inc. said it will cut pay by 10 percent for its global workforce of 20,000. Atlas World Group Inc., the second largest US moving and storage company, based in Evansville, Indiana, said it would cut the pay of its salaried personnel by 5 percent across the board.
On December 16, the nation’s largest electronics and appliance retailer, BestBuy, tendered buyout offers to virtually its entire corporate workforce. The Minnesota-based corporation has seen a sharp decline in sales and profits. Rival Circuit City filed for bankruptcy in early November.
The take backs have emerged as a widespread trend. According to a New York Times report published December 21, “a growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.”
“The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics,” the Times reported.
Similar measures are being carried out by state and municipal governments, and by colleges and universities.
The city of Galveston, Texas, has demanded a 3 percent pay cut from its municipal workforce of more than 700. The city faces a current budget shortfall of $3.6 million, which is expected to expand by about $2 million when in April property tax appraisals are expected to show a sharp decline in revenue.
Tehama County in California has ordered a pay freeze for its employees, and has indicated it will also furlough workers in the coming months.
The state of California, which faces an acute budget crisis, has ordered a new round of pay cuts and layoffs. On Thursday, Governor Arnold Schwarzenegger issued an Executive Order calling for mandatory furloughs of two days per month for state workers beginning in February and lasting through June of 2010.
The Pennsylvania State University system recently joined the large number of colleges and universities that have enacted pay as well as hiring freezes, canceling job searches for vacant positions. The cancellation of numerous academic job searches, coupled with growing numbers of professors delaying retirement due to declines in their retirement accounts, have combined to create one of the worst job markets for recent PhDs in years.
Analysts consider pay cuts and hiring freezes as a first response for many companies to the economic crisis. A survey carried out by the labor relations firm Mercer in early November—well before the full brunt of the financial crisis had registered in the real economy—found that 35 percent of 1,028 companies it surveyed are planning “significant” workforce reductions in 2009, and that most “are likely to curtail overall hiring, [and] reduce 2009 salary increases and cut bonus payouts.”
Patricia A. Milligan, Mercer’s Chief Markets Officer, said that thus far in the economic crisis most companies “have refrained from … deep workforce cuts, across-the-board salary freezes, reductions in defined contribution plan contributions, or elimination of certain health benefit programs,” but that these decisions will be reconsidered after corporations look at their year-end books and worsening business forecasts. It is likely that an intensification of layoffs and pay cuts will emerge in January.
Another survey conducted in early December by the consulting firm Watson Wyatt Worldwide Inc. among 117 employers, found that 5 percent had already reduced salaries as a response to economic crisis and another 6 percent said they would follow suit in the coming year. On the other hand, 52 percent have already made job cuts or intend to do so by the end of 2009.
Mass layoffs continue to mount in the US and worldwide. The global advertising giant Omnicom has announced plans to fire up to 5 percent of its 70,000 global workforce. Two insurance corporations recently announced mass layoffs: Aetna will cut 3 percent of its workforce of over 36,000, while Genworth Financial will lay off 1,000 workers, over 13 percent of its employees. Newell Rubbermaid, a manufacturer of household storage products, has announced it will cut as much as 10 percent of its salaried labor force and will put in place a wage and salary freeze for 2009. The hard-drive maker Western Digital Corp., will eliminate 2,500 jobs, approximately 5 percent of its global workforce.
The financial services firm Northern Trust Corp. will cut 450 jobs in 2009. Baldor Electric Co. will eliminate 900 jobs by June. Microcontroller producer Atmel will purge 11 percent of its workforce in North America, while pharmaceutical firm Bristol-Myers Squibb will cut 10 percent through 2010, according to the AP, including 800 immediate layoffs.
The video game maker Electronic Arts Inc. has announced layoffs of 1,000, about 10% percent of its workforce. One of its rivals in the video game industry, Midway, will cut 25% of its employees.
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