Labor Day: Lost decade for the middle class
For 35 years, Martha Fowler’s life was anchored solidly in America’s middle class. She had a good job, earning $21 an hour with good benefits as an operator and technician for Western Union.
“I liked the work,” she told us. “I guess you’d have to if you stay in the same place for 35 years.” Her paychecks helped the single mom from Ferguson provide for her two children.
“I have a beautiful home. I’ve had nice cars. My oldest daughter went to Washington University.”
Ms. Fowler’s membership in the middle class was revoked last month. Western Union is laying off nearly 700 workers in the St. Louis region, Ms. Fowler among them. Most of the work they did for the company here will be done, instead, by people in Costa Rica, the Philippines, Mexico and the Dominican Republic.
“I don’t have the slightest idea what I’ll do,” Ms. Fowler said. “I’m as lost as I can be.” Financially, she says she’s can’t afford to retire. “Can you imagine applying for a job at 62 years old?” she asked. “I think the system sucks.”
Labor Day 2008 finds working men and women in a serious bind. Prices are rising faster than paychecks, jobs are disappearing and our nation teeters on the edge of a recession.
Unemployment in St. Louis is at 7.2 percent, a 16-year hear high, higher than the national average of 6 percent. About 20 families a day are losing their homes to foreclosure here.
But families were stuck in a financial rut even before the current economic slump. This has been a lost decade for the American middle class. Eight years in, the average American family is worse off than it was in 2000.
Median income among working-age households was $58,721 in 2000. Last year, it was $56,545, adjusted for inflation. There’s no evidence that the downward trend has reversed since then, as paychecks have fallen behind climbing gasoline and food prices.
In 2000, 11.3 percent of Americans lived in poverty. Last year, it was 13 percent in Missouri and nationwide; 11.9 percent in Illinois.
In the past, the American standard of living almost always has improved over the course of a decade. This decade, it may not.
Other pillars of family security have been weakening, too. In the 1970s, nearly 70 percent of us could count on health insurance that was provided by our employers. In 2000, it was 64 percent. Today, that’s down to 59 percent. One out of every seven Americans has no health insurance at all, and 80 percent of those people are in families in which people are employed, according to the Kaiser Family Foundation.
Rosemary Gonzalez may be about to join that group. She lost her $35,000-per-year job at a packaging company last month. In a working life of more than 30 years, she never had lost a job.
“I came home that day, and I was probably white as a sheet. I didn’t talk. I was so numb,” said the single woman from Arnold.
In the month since, hundreds of phone calls and dozens of resumes later, she’s learned that it’s hard to find work at age 55. “I got zero. I didn’t get a phone call back. I didn’t get an e-mail. I may never work again,” Ms. Gonzalez told us.
Her health coverage ends in December. “I can’t afford medical coverage because it’s so high,” she says. “Everything I saved is going to be gone. Then what do you do?”
Even those who have insurance are finding their coverage shrinking as deductibles and copays rise. One of the results is a sicker population. The Center for Studying Health System Change recently reported that one in five Americans scrimps on health care for cost reasons, either by delaying care or going without.
It would be difficult to lay the blame for these developments at the feet of the American worker. The fact is, Americans work hard, devoting a greater percentage of their time to working than people in any other advanced industrial nation. In a typical year,
Americans work the equivalent of a week more than the Japanese, three weeks more than the British, six weeks more than the French and nine weeks more than the Germans.
Americans work smarter, too. Productivity — output per hour worked — is up 19 percent since 2000. That’s one reason jobs are harder to find: Employers can produce the same amount of goods and services with fewer people than before.
Because we work hard and work smart, the American economy grew by 18 percent from 2000 to 2007, before the current slump began. But little of that growth found its way into middle-class paychecks.
What grew, instead, were corporate profits and the wealth of the already wealthy: The economic divide between the very well off and everyone else has become a chasm.
The 1 percent of Americans at the top of the income scale now take in a whopping 23 percent of the nation’s total income, according to figures from the Economic Policy Institute’s new report, “The State of Working America.” That’s the largest income disparity since 1928 — just before the Great Depression.
There are plenty of reasons for this. Globalization, as workers at Western Union can testify, is one of them.
“They’re paying something like $10 an hour in Costa Rica for work that was $22 and $23 an hour here,” explained Earline Jones, president of the Communications Workers of America local that represented the Western Union workers who lost their jobs.
“We’re moving jobs outside the U.S., and nobody cares,” she said.
The economic benefits of free trade are lower prices of imported goods here and new overseas markets for products produced in America. But it plays hell with the lives of lesser-skilled Americans who end up competing with impoverished workers abroad.
The diminished power of unions is another reason for the decline of America’s middle class. The purpose of organized labor in the first place is to strengthen the ability of workers to deal collectively with employers who otherwise would hold all the leverage in negotiations. Half a century ago, unions represented a third of all American workers, and their existence kept wages up even in non-union shops. Today, unions represent only 12 percent of all American workers — just 7.5 percent among workers in private industry.
The fortunes of the middle class parallel that decline.
American families clearly need some help from Washington, something beyond a one-time stimulus check.
Congress should restore the vitality of collective bargaining, which steadily has been eroded by relentless attacks from well-connected industry trade associations, toothless labor laws and a corporate-friendly National Labor Relations Board. One avenue for that would be passage of the Employee Free Choice Act, which would make it easier for workers to organize unions once a majority of workers have signed up.
American trade negotiators — whoever becomes president — should insist on fair environmental and labor standards in all agreements so that Americans don’t lose jobs unfairly to foreign companies that pollute land, air and water and exploit their workers.
We should subsidize job training for laid-off workers and protect people and the economy by ensuring that everyone has affordable health insurance that provides meaningful coverage.
And because better jobs require better-educated workers, we must acknowledge the long-term benefits of increased funding of our public colleges and universities and hold tuition down. Working families can’t afford $19,000 a year to send a child to the University of Missouri at Columbia.
When America does these things, there will fewer people like Martha Fowler and Rosemary Gonzalez, rewarded for a lifetime of hard work by being coldly cast aside.
All I can say about Martha Fowler is, “Pathetic.” She pulled down union wages for 35 years, and is making $21 an hour right now. She bought her house in 1984, for less than $40,000, so she isn’t making a $1,400 house payment like so many people are. She lives in Ferguson, so it isn’t like she needs a Mercedes to fit in with the neighbors. And she can’t afford to retire at 62? It really makes me wonder …
witless, you really suck at being a compassionate conservative!
What’s pathetic is you continue to support a party that says moving Ms. Fowler’s job overseas “is good!”
What’s pathetic is you continue to support a party that puts people out of work, punishes workers and rewards outsourcing employers with more and more tax breaks on their already disgustingly high profits at the expense of the middle class!
What’s pathetic is you still support a party that has no place for you, and who nominates a candidate who is too friggin’ senile or stupid to know there’s no such thing as czechoslovakia anymore, what Sunnis, and Shiites and al Qeada are up to in Iraq, and admits he knows nothing about the economy!
John McCain is STill too ignorant to be President!
http://dangerousintersection.org/2008/08/04/15-reasons-john-mccain-is-too-ignorant-to-be-president/
Mr. Hogan, I never claimed to have compassion without limits. A person who loses her job at 40 is in a jam. Somebody who loses her job at 62 ought to be reasonably well prepared, particularly if she has been living in a $40,000 house for the last 24 years while pulling down a union paycheck. Our family sacrifices and saves so that we won’t be broke when we retire. We buy used cars, we get our groceries at Aldi’s, and we take inexpensive holidays. Obviously, some people choose to do otherwise. Why should I feel sorry for them when things don’t work out quite like they planned?
As far as your rail against the Republican party … low skilled jobs have been moving overseas for decades. Neither political party can do anything about it, and neither of them have. In fact, according to Wikipedia, “NAFTA was able to secure passage after Bill Clinton made its passage a major legislative priority in 1993.” When it passed the Senate, the ayes included 27 Democrats.
For personal economic security, people need to choose a career that can’t easily be done by somebody 5,000 miles away. There are plenty of jobs for auto mechanics, heating and cooling technicians, plumbers, electricians, teachers, lawyers, and a host of other things which can’t be moved overseas.
In fact, today’s great new economic threat to the middle class - and of course, one which neither the ignorant Mr. Hogan nor the good folks at the Post-Dispatch will mention - is not overseas outsourcing, but illegal immigrant labor. The illegal immigrant population of the United States is estimated at 12 million. How many Americans are being priced out of unskilled jobs because they are competing with people who will work for half of minimum wage? Yet the compassionate idiots in the Democratic party won’t close the floodgates or deport the ones already here.
If law matched reality in our nation’s immigration policy, chickens would still get boned, grass would get cut, trees would get trimmed, shingles would get nailed onto roofs, and vegetables would still get picked. But it would cost us more money to pay American citizens to do those things. Your party stands firm and alone against making that happen, and as a result, millions of Americans are out of work and millions more are working for starvation wages. Thanks, Hogan. It’s really YOU and your party that suck at being compassionate.
Nick,
I doubt that this lady has been making 21 per hr. the entire 35 years. A single mother making $21 per/hr., raising two children, plus their college education will not be prepared to retire at 62. That’s even if she was making the $21 per/hr the entire 35 years.
What planet are you living on?
It is not like this woman is a government worker being able to retire with guaranteed retirement income after 20 years. She just lost her job, no guarantee retirement income there and her income was not large enough to invest enough to guarantee her a cozy retirement income, she had to live off it and support two children.
Globalization (NAFTA), sending jobs overseas have been disastrous for Americans and the U.S. economy. A country cannot survive only on highly skilled jobs, we need both for a healthy society.
In fact, if every working abled body in the U.S. were highly skilled, college educated and trained, we would still suffer from great unemployment and poor people of working age in our society because there will never be enough of these jobs for everyone.
Nick American society has made it impossible to live on low wages, zoning laws etc.. are not low wage friendly. But I have noticed that immagrants can get away legally with piling people into one home or apartments against zoning laws, why is that? I think that they have the right connections through some Republican businessman taking advandtage of their labor while paying them lower wages than American citizens. What do you think?
Your little world will too be pulled from under your feet, to knock you down a few notches and the sad thing is that you can’t imagine it happening to you because you falsely believe that somehow you have been so smart that nothing like this can touch you.
You don’t know what kind of life-style that this lady had or what kind of cars she drove or purchased, you are assuming a whole lot. You don’t know if she has had or have medical issues, you know NOTHING and fail to realize that you are a FOOL for continuously being so uncompassionate and judgmental.
FALSE SECURITY and arrogance is what you suffer from Nick. The rug will be pulled from under your feet too, and many other arrogant ones like yourself. That, you can look forward to and remember when it happens and it will, that you were told this.
In 1992, Bill Clinton was running on his record of “creatiing new jobs” in Arkansas. I remember sending a letter to somebody in the Bush I White House with a picture of a factory in South County that had a chained gate because the plant relocted to Arkansas where wages were cheaper. I suggested they come up with an ad saying Clinton really didn’t create those jobs, he just stole them from us. Now, the Arkansas jobs go to China or Mexico. Companies just play by the rules. The current rules say make as much as you can per share every quarter. So, that is what they do. There are other reasons companies leave America. Litigation abuse. Over Regulation. High Taxes. In the case of this woman, how did the Internet impact the business of Western Union? Probably the same way cell phones impacted pay phones. My heart goes out to this woman. What is she supposed to retrain at 62 and work for two more years? Face it, she’s like the rest of us over 50, we are unemployable and have been so for the last twenty years. The answer isn’t “not giving tax breaks to companies who send jobs overseas”. The answer lies in fundementally changing the way we judge companies so CEO’s can take a long range view instead of one lasting only 90 days. While China plans decades out, we are chasing our tails to make short term investors happy.
35 years in one company and didn’t think once about getting some more education in another field? How is that the company’s fault? The PD points to it right here;
“But it plays hell with the lives of lesser-skilled Americans who end up competing with impoverished workers abroad”
“And because better jobs require better-educated workers, we must acknowledge the long-term benefits of increased funding of our public colleges and universities and hold tuition down. Working families can’t afford $19,000 a year to send a child to the University of Missouri at Columbia”
No, working families could afford it if they would stop spending their money on flat screens, overpriced SUV gas hogs, and other junk I see people collecting these days. Ever heard of a scholarship? One way to get money for college is the GI bill. Join the active military, guard, or reserve. My stepson is doing that now and they are covering the tuition at Mizzou.
Americans have no one to blame but themselves.
The question my company asks me every year is this: what are you doing to prepare for your NEXT job? What skills do you need to move to your next position should this job end or you choose to leave? Unfortunately it sounds like no one asked these two ladies these questions, as they sound relatively unprepared for this transition.
The root of the problem in my view is the breakdown of the family. Government simply cannot grow indefinitely to meet all these needs; labor unions exist to fix yesteryears’ problems.
D. Walker - Obviously, she hasn’t been making $21 an hour the entire time. So what? Her house payment is $266 PI + $100 taxes + $50 insurance = $416 a month. And actually, her house is absurdly over-assessed - if she had taken the time to appeal it, her taxes would be half that amount. If she is smart, and is driving a car she paid cash for with just liability insurance, she could easily be living on $1,000 a month - which is less than most people’s house payment.
You say that “if every working abled body in the U.S. were highly skilled, college educated and trained, we would still suffer from great unemployment and poor people of working age in our society because there will never be enough of these jobs for everyone.” But you’re wrong. Examples:
* The heating and cooling industry faces a labor shortage. A recent story reported the need for 27,000 a year to replace retiring workers, and an additional 38,000 in the next six years.
* According to a recent report from the National Foundation for American Policy, the labor pool for skilled technology workers is stagnant while demand continues to rise. As a result, we rely increasingly in immigrant labor in high skill positions.
* The shortage of skilled healthcare workers is expected to exceed 30 million people by 2030, according to one study. This study found that “lives are being lost due to inadequate staffing.”
As to the overall unemployment rate, the 2007 average was 4.6%, lower than it was for 5 of the 8 years of the Clinton boom.
D. Walker, you speak with the tone of a prophet, but you are just a fool. Your facts are wrong, your opinions are nonsense, and your attitude is self-righteous. You make accusations and call people names, and the word evil is never far from your lips. But what is evil is the doctrine which has been accepted by many a liberal in America, that everyone is entitled to a life of luxury, that struggle and sacrifice are not virtuous things, and that those who have achieved much do not deserve what they have. Yours is a doctrine that drives a slothful people to a useless existence, and a nation to ruin. Your doctrine is truly evil, coated with a thin veneer of compassion. Those of us who profit by hard work and sacrifice must pray that Americans see your doctrine, as put forth by your false messiah Mr. Obama, for the truly evil thing that it is.
This topic is nothing more than the ad vocation for communism. For Gawds sake I was in abject poverty until the age of 8. I am Shawnee Indian, if that makes any difference to anyone. I retired when I was 37 when I sold the many companies that I created and owned.
i don’t feel sorrow for that woman, at all. If she didn’t prepare herself to have options if she was fired. That is not my problem. It’s her problem.
one must understand that we now live in a Global economy. After retiring, I have invented two different appliances that will be manufacture in China, distributed by Sanyo…a Japanese company.
I have no sorry for her predicament,she brought in on herself.
If labor unions are to be effective in the future they will work to train their members for the jobs of the future, not work to maintain a stranglehold on the jobs of yesterday. The role of Western Union was pretty much over when the Internet took hold. I’m sure the union kept saying “we will always be needed” I wonder if the union leaders will still have their jobs? Those at the top seem to protect themselves at the expense of others. Something I’ve never understood about a union.
““They’re paying something like $10 an hour in Costa Rica for work that was $22 and $23 an hour here,””
The real price for the labor must be $10 then, not $23.