”I have been assured by a very knowing American of my acquaintance in London, that a young healthy child well nursed is at a year old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled ...”
Jonathan Swift - "A Modest Proposal" (1729) (more)
The New York Times are reporting today that more union workers are agreeing to lower wages for new hires. This means that the children of workers will be getting lower wages than their parents who have doubled productivity in the last 30 years, and not got raises that reflect any part of that; workers have got (after correction for inflation) less than 1% raises a year. Now their children will be going backwards, making even less than than their parents did in 1970. At a time when the economy needs more workers with more money in their pockets, and we can certainly use fewer dollars in the pockets of millionaires and billionaires that will be invested in plants in China to take more jobs away, this is a significant step backwards. Every business wants plenty of customers with money to buy services and products, but no business wants to share in creating the customers that are critical to the survival of the business in the USA. Currently, about 50% of all business income reported by Standard and Poor listed firms, is income from foreign operations. The demand by the (new) Speaker of the House, John Boehner(R-OH) for tax breaks for the rich so they can invest in rising Asian markets, will just make this problem worse. The same money in the pockets of young workers would mostly be spent right here in the U.S.A. Why isn't the investment that customer makes in an existing business in the U.S.A. that is currently operating at less than full capacity (industry average: 75%), just as valuable, or even more valuable, to American citizens, as the same money invested by Goldman Sachs in global hedge funds? Cutting taxes on money that will be invested in taking jobs out of the U.S. A makes no sense at all to other taxpayers, who will have to make up the difference, or accept the cuts in benefits, defense, food inspection, etc.
LOUIS UCHITELLE 20 November 2010 The New York Times (full article)
MILWAUKEE — Organized labor appears to be losing an important battle in the Great Recession.
Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.
In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.
Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.
Though union officials said they could not readily supply data on the practice, managers have been trying to achieve this for 30 years, with limited results. The recent auto crisis brought a two-tier system to General Motors and Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in 2006, signed such a contract with the United Automobile Workers.
The arrangement was a fairly common means of shrinking labor costs in the recession of the early 1980s. At the end of the contracts, however, wages generally snapped back up to a single tier. At G.M., Chrysler, Delphi and Caterpillar, the wages will not be snapping back.
Nor will that happen for workers at three big manufacturers here in southeastern Wisconsin — where 15 percent of the work force is in manufacturing, a bigger proportion than any other state. These employers — Harley-Davidson, Mercury Marine and Kohler — have all but succeeded in the last year or so in erecting two-tier systems that could last well into a recovery.
(read full article)
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