Views on politics and current events

Saturday, September 08, 2007

A Midwesterners Lament

The recent article in the New York Times about the closing of the Maytag plant in Newton Iowa 'Is There (Middle Class) Life After Maytag?' wasn’t easy to read. A story about the plight of yet another group of industrial workers that are victims of the modern economic reality. Change the details, and this story would fit so many other similar situations across the country, especially in the rust belt, the Midwest.

But I fear all of this is falling either on deaf ears, or ears that will spin it into something it isn’t. I can hear some saying as they read about the Winchells,

“$24 an hour and $19 dollars an hour? And they wonder why the company shut the plant down? What makes them think they are worth that much?”

What is so remarkable is that it is not only the well-to-do that say such things, but people who make $7-9 an hour say it too. Every higher-paying job that is eliminated lowers the pay of other jobs in the area. I have seen it happen where I live.

The article states that 54 million people occupy the ‘nether region’ of incomes well above the poverty line, but well short of the middle class. Another phenomenon I’ve seen first-hand in the area I live. Despite that, some maintain the middle class is actually growing. My own personal experience and view is that the middle class is NOT growing, but has been shrinking for the past few years. At least in my corner of the world, and the Midwest in general. What is happening in other areas of the country, I don’t know. But I find it hard to believe that the middle class is growing at all anywhere. Perhaps maintaining in some areas, but not growing.

I’ve done a lot of arm-chair research on the ‘net about a lot of things. There’s a wealth of information to be sure, but far too much of it is presented with a bias I find disturbing. Information about labor and the economy especially. Of course, the process of turning data into information can be influenced by the bias of the people doing it. That’s just human nature, and something that should be kept in mind for all of us. No one has ever written anything that has been 100% objective. But the blatant disregard for objectivity, or even an honest attempt at objectivity, is distressing. It is getting harder and harder to get really solid information. Even going to the source of the information, the data, needs to be looked at with a jaundiced eye. It seems many have an agenda they are willing to push at the expense of objectivity and the truth.

There has been no change in the way unemployment figures are calculated. The ones who have drawn the maximum benefit without finding a job have dropped off the edge, are no longer counted. The new jobs information only counts the number of 'new' jobs, but does not say anything about the pay of those jobs, or the number of jobs that have been lost. Is there an actual positive overall gain with these new jobs, or compared with the number of jobs lost within the last six years are new jobs merely replacing the lost ones, or not equaling the number of jobs already lost? How can a true determination of the labor situation be made by gathering only a portion of the data? The answer to that is, it can't. There is no incentive politically or economically for changing economic and labor data collecting. What it all amounts to, in my opinion, is data and information manipulation.

The steel mill I worked in for thirty years closed six years ago. The repercussions of that are still being felt by the community I live in. The mill accounted for 1,400 jobs, plus many other jobs held by support suppliers. It is never just one isolated group of workers affected by a plant closure. The mill I worked at closed ostensibly because of foreign imports. That's the 'official' line the news release said, and what the local paper printed. The truth is much more complex than that, but I'll leave that for another time.

After two years of sitting idle, the electric furnaces and rod mill were sold to a company for practically dimes on the dollar. Leggett and Platt bought these portions of the old mill, the electric furnaces,caster and rod mill, for a couple million dollars. The electric furnace alone cost over $11 million two years previous. The same CEO that shut down the old mill was hired by the new owners to run the reopened portion of the mill, along with many other management personnel.

The new mill is running, and has around 200 hand-picked employees. When the old mill shut down, health insurance was immediately lost, and the pension plan had to be taken up by the PBGC, the Pension Benefit Guaranty Corporation. Many of the former employees had their pension reduced, and some got nothing but a small vested pension that cannot be collected until the age of 65.

The plant in Newton, Iowa is being closed with the work that used to be done there being shipped to Mexico, and Maytag's non-union plant in Ohio. The workers in Newton will be cast off, like the workers in the old Northwestern Steel and Wire Company of Sterling Illinois were. These are but two examples. The Midwest is indeed the rust belt. And outside of a few reporters and some other folks who are asking questions, no one else seems to mind or care that the Midwest is rusting away. Just a result in the changing world economy, some say. Oh, things will even out in the long run, say others. The middle class is actually growing anyway, didn't you know? But all of that palaver does nothing to help the here and now. The role the United States is playing in this vast world market is being played out in part on the rusting-out backs of an economically strapped Midwest. At least for the moment.

But this will not stop in the Midwest. Whatever areas of the country that are booming now will suffer the same fate eventually. The scenario is self-perpetuating. World trade, 'free' trade (which so often is not really free because it costs this country way too much) is fueling this scenario. It will not restrict itself to blue-collar labor. It has already begun to play out the same in more and more white-collar jobs. The further erosion of the backbone of this country, the middle class, will result. An ever-widening gulf between the haves and the have-nots.

What will stop it? A re-examination of our role in the world economy, with the focus shifting to 'fair' trade instead of 'free' trade would help. Perhaps. Or is it already too late?

1 comment:

Teri said...

It's already too late. How can we possibly compete with wages so low in China and India? They will continue to shift those jobs elsewhere. And what you are witnessing is the way that they change employees from decent pay to just above minimum wage. Things are getting squeezed. They increase the minimum wage to prop up those on the bottom. But you wind up with skilled laborers who are being pushed down towards that minimum wage. They displace the folks just starting out. I'm not optimistic about it at all.

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