Amy Traub
The Fall of General Motors and the Three Paths to the Middle Class
“For decades, unionized manufacturing jobs have been considered the surest path to middle-class prosperity and realizing the vaunted dream for blue-collar workers,” writes Nick Carey in an eloquent analysis for Reuters. Yet today General Motors is in bankruptcy and the United Auto Workers has made a series of painful cutbacks from wages for future workers to retiree benefits to waiving the right to strike. That’s before we even get to the job cuts.
As Robert Reich points out in the Financial Times, “middle-class jobs that do not need a college degree are disappearing.” In the 1950s, high-wage GM was the nation’s largest employer and it supported car dealerships and parts suppliers many of which also provided a middle-class standard of living. Today, the biggest employer is low-wage, meager benefit Wal-Mart, squeezing its supply chain to provide similarly inadequate jobs. As GM and other islands of blue-collar prosperity succumb to the economic tide, we are left with a model that does not support a mass middle class.
Yet it is unacceptable to give up on the idea of job stability, health coverage, retirement security and wages that can support a family for the majority of Americans. So, after the dramatic retrenchment of the American auto industry, how do millions of Americans get to the middle class? And what policies can we pursue to help them get there?
It’s hard to see any single sector of the economy offering a way forward in the long term. Green jobs are great, but they alone won’t be enough to sustain a mass middle class. Jobs for college-educated workers are already amongst the highest quality positions out there. But no matter how accessible we make higher education, there is no future scenario in which every job in America requires a college degree. No matter what, we are left with those burger-flipping, shelf-stocking, grass-cutting, retail-counter positions in the service industry. Except that those jobs don’t have to be the low-wage, low benefits positions that make up today’s Wal-Mart economy. Just as it was unions that made the original GM jobs into what is today the last faltering bastion of the middle class, unionization could also make the service industry into another viable path to a middle-class standard of living.
In fact, both unionization and education are critical components of all three paths to the middle class. A revitalized manufacturing sector, exemplified by the enthusiasm for green jobs, will require skills training and union-level wages to produce genuinely middle-class employment. College education must be made more affordable and accessible to all Americans, yet the opportunity to organize and bargain collectively is also needed to ensure that professional employees don’t see their own working conditions degrade. Finally, the service sector jobs that so urgently need a union boost to wages and benefits would also benefit from education and training that can provide genuine career ladders.
GM may be a shadow of it’s former self for a long time to come, but if we can accomplish the overhaul of labor law and make the substantial public investment in education we need, the nation’s middle class doesn’t have to fail along with it.
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Posted at 2:09 PM, Jun 02, 2009 in Auto Bailout | Economic Opportunity | Economy | Education | Employment | Middle-class squeeze
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Comments
I can't disagree with the idea of organizing service workers, but the idea that "there is no future scenario in which every job in America requires a college degree" is just not true. A hundred years ago, with the economy dominated by farming and by textile jobs that could be done by immigrants who spoke no English, it seemed as if there were always going to be jobs for people who were illiterate and good jobs for people who were literate but had no education beyond the 8th grade. Progress means jobs are going to require more training and more education; already the best-paying jobs involve multiple degrees and internships that only end around age 30, whereas medieval apprenticeships started at 10 and ended at 17.
Also, although the US has gotten less egalitarian and less unionized since the 1950s and 60s, the difference isn't very big compared to that between the US and the rest of the world. At its lowest, the US Gini index was 39; using today's methodology, it would be 41. This would be higher than in every developed country today except Singapore and Hong Kong. Israel, whose current Gini is 39, has so many ethnic and social rifts and so much poverty that even neo-liberal papers like Haaretz and the Jerusalem Post decry its inequality. Similarly, at its highest, the US union density was 23%, in 1970, lower than in most other developed Western countries today, including post-Thatcher Britain at 29%. The culture created by GM offered a lot of opportunity to the high school-educated urban white male, but not to the rest of the country, and that was reflected in the already unacceptably high national Gini index.
Posted by: Alon Levy | June 3, 2009 01:27 AM
Your point about the role of race in maintaining inequality in the U.S. is well taken. That's a big reason why new organizing cannot just be a blast from the past -- we need to exceed the gains of the 1950s and 60s which too frequently raised the wages of white working men while excluding women and people of color from the most lucrative jobs or from membership entirely. The good news is that the labor movement has come a long way since then -- today, African American workers are *more* likely to belong to unions than whites (although Latinos are still less likely to be union members and the picture is mixed for Asian-Americans). There are still significant racial barriers to overcome -- especially in the construction unions, which I plan to address later this week -- but the image of unions today as continuing to serve an overwhelmingly white male membership is obsolete. Leadership (especially at the highest levels) is another question.
I stand by my point that "there is no future scenario in which every job in America requires a college degree." Reaching back a hundred years and more you point out that there were jobs for people who did not speak English, had no formal education, and were illiterate. The reality is that there are still people working at jobs in the U.S. today who do not speak English, have no formal education, and are illiterate. Certainly it's a smaller and more poorly paid sector of the economy -- that's the point I've made in my post. But people with that lack of skill are still going to work everyday, and I believe these jobs will also be around in another century, despite advances we will no doubt see in mechanization. The question is whether they will be jobs that offer a decent standard of living in exchange for often difficult labor.
Posted by: Amy Traub | June 3, 2009 10:23 AM
Will GM's bankruptcy affect a site like this for truck and auto parts ?
Posted by: Felix Chesterfield | July 28, 2009 03:32 PM