Image: The Brookings Institution with help from Charlie Chaplin
A black woman lounges in an open window, framed by the glow of a street light penetrating the darkness. With the look of someone who knows the roots of the blues, she sings, “Remember my forgotten man.” It is 1933, but it could just as well be the day before tomorrow.
Remember my forgotten man,
You had him cultivate the land;
He walked behind the plow,
The sweat fell from his brow,
But look at him right now!
By March 13, workers at Ford will have to decide whether to accept a “buyout” that runs from $100,000 for first year workers (although, surprise, surprise, they lose their health benefits) to $140,000 for skilled workers over 55 and ten years seniority. Call it the dirty oil parachute. Any idiot can do the math. First, a chunk of that “buyout” will go to Uncle Sam, so it won’t be $100,000 or $140,000 but a bit less depending on the worker’s tax bracket. Then there’s the dollar amount itself–an insult to people who have worked their entire lives for Ford.
In Michigan, in this economy, a buyout means you’re done. You walk away from twenty years on the line with enough money to get you through a few years, and then where are you? The whole idea is–dare I say it–Un-American. We are actually going to pay people not to work. Why? so we can replace them with cheaper workers. Let’s get to the bottom line, for every buyout, Ford can hire in another worker at considerably less and make back that buyout in a year or two. The New York Times reports Ford needs to:
Pave the way for new hires at wages of $14 an hour — roughly half of current pay scales.
This story has not received the attention it deserves because it signals an ominous trend in American society: the well-paid, skilled worker is becoming extinct. These are the people who built the American Century one bolt at a time, who made the phrase “Made in America” a synonym for excellence. Through years of struggle, some of which cost people their lives, they made it possible for someone who worked hard and stayed loyal to make a decent living and grab a piece of the American Dream.
Now Detroit is saying they don’t want these people any more. It is showing them the door and giving them a good kick in the rear end to make sure they get the message. Like it or not, there is a widespread movement underway in America’s factories and workplaces to essentially lower the salaries of those who work for a living. When Ford and other companies in trouble complete their “buyouts,” it will mean that no one ever again will earn what those people earned.
As usual the workers get the shaft for bad decisions by management. It wasn’t the workers who got Ford into this mess; it was the 20th highest paid person in America, according to Fortune, Ford CEO Alan Mulally, whose 2006 compensation was $40.5 million. Meanwhile Ford has the gall to pitch the buyouts as “Be Your Own Boss.” If the buyouts made what Mulally raked in, they might just take the offer. Figuring a 40-hour work week with two weeks’ vacation, Mulally’s salary amounts to a tidy $20,250 an hour, or $810,000 per week.
Now suppose Mr. Mulally was told to take a week or two off without pay, as mine workers near where my parents are buried used to have to do, and suppose that money were used to offset those “buyouts?” In fact given Ford’s dismal performance let’s give Mr. Mulally a ten percent pay cut or even twenty percent. Then lets take that money and invest it in Warren Buffet’s Berkshire Hathaway at ten-year return on investment of 5.7% where it could be used to help workers rather that screw them.
Here is what the “Mulally Foundation” would yield. The 10% pay cut would grow to close to $13.5 million in three years and almost $24 million in five. The 20% pay cut, which would reduce poor Mr. Mulally’s weekly earnings from $810,000 to a measly $648,000, would yield almost $27 million in three years and $47 million in five. Think what the “buyouts” could do with that.
Curiously, at the same time Ford and the other automakers are shutting the door on high-paid, skilled workers, another less-noticed development is shutting the door on their children. Julia B. Isaacs, Isabel V. Sawhill and Ron Haskins of the Brookings Institution recently published, “Getting Ahead or Losing Ground: Economic Mobility In America,” yet another study showing that while Mr. Mulally and his colleagues are doing quite well, the rest of us are in big trouble.
Funded by the Pew Charitable Trusts, “Getting Ahead or Losing Ground” observes:
The American Dream is alive if somewhat frayed.
What the study found is that just as the door is being slammed shut on skilled workers by the likes of Mr. Mullaly, so the rest of the rich are slamming it on Americans. We are in danger of becoming the wealthy aristocracy that the American Revolution sought to eliminate.
For example, 42 percent of children born to parents in the bottom fifth of the income distribution remain in the bottom, while 39 percent born to parents in the top fifth remain at the top.
Even more troubling, a child growing up in Canada, Norway, Finland, Denmark, France, Germany, or Sweden stands a better chance of getting ahead than an American child. The country of the Horatio Alger myth has come to resemble a Dickens’ novel.
The study adds yet another voice to the growing chorus of studies that shows this country is becoming less equal as the have’s grab more than their fair share leaving the have nots believing their last, best hope is buyouts. The mantra that has been sung for at least a generation in this country is that as the need for skilled industrial workers diminished due to technology and production efficiencies, their children, who once hoped to join their fathers and mothers at the factory, could aspire to a better education as a way of coping with the loss of these skilled jobs.
If you’ve ever been on unemployment, you remember how the gospel preached by zombie-like government “counselors” was to improve your education. Since as far back as Thomas Jefferson, people viewed education as the foundation of our democracy and the main meal ticket to reaching the American Dream. While that is still true, what is not so well known is how the doors to a meaningful education are rapidly closing, making an ominous sound that echoes like the iron slam of a prison gate.
“Getting Ahead or Losing Ground,” points out:
An examination of preschool, -12, and undergraduate and graduate education in the United States reveals that the average effect of education at all levels is to reinforce rather than compensate for the differences associated with family background and the many home-based advantages and disadvantages that children and adolescents bring with them into the classroom.
Buried on page 95 of the study (yes, I read these, which is why you find things here you will find nowhere else) is perhaps the most startling sentence I have read this year:
In fact, if it were not for the nation’s education system, it might be more difficult for wealthy parents to pass along their income advantage to their children.
I had to read that sentence over several times, it so unnerved me. What it is saying is that our education system has become the equivalent of the priggish British prep schools that we Americans love to stick up our noses at (think Chariots of Fire or even Hogwarts Academy). As Harry Potter and his friends kept finding out, it’s the Malfoys of the world who are running things.
The report only gets more depressing.
As they now function, the nation’s K-12 school systems provide only a modest boost to poor and minority children’s chances of moving up the economic ladder.
I shudder to think what Thomas Jefferson would think if he were alive to read that sentence. His entire philosophy of education has been turned on its head. We’ve all known that the rich get into Harvard, but for most of us there was always good old state university. Unfortunately, the study says that ideal is becoming extinct:
A recent exhaustive review of the evidence showed that at every step in the process of preparing for, applying to, attending, and graduating from four-year universities, students from poor families are at a substantial disadvantage.
But then none of this is telling us anything we don’t already know. If you have tried to put a child through any college in the last ten or fifteen years you know that after running the exhausting gauntlet of forms that want to know what size socks you wear, your child will march down the aisle at graduation lugging a huge debt. The deck becomes even more stacked at the graduate and professional school level where it is not uncommon for students to emerge after four years with six figure loans to pay off.
Especially troubling are the study’s conclusions about people of color. There is a belief in the AfroSpear (thanks to Francis Holland for this link) that “white liberals” in what Field Negro termed the “whitosphere” don’t care about or want to care about issues concerning people of color. If that is true, “Getting Ahead or Losing Ground” should put that notion to rest, not because the “whitosphere” has changed, but because it better change or this country is headed down a path of no return.
People of color have had to contend with the one step forward, two steps back vacillations of American history before, but not since this nation turned its back on Reconstruction has there loomed the prospect of such a pronounced step backward. The report makes clear that for people of color, the future appears not a dream, but a nightmare.
For people of color employers like Ford and the promise of education have long helped to level the playing field. The exodus of African Americans from the land of strange fruit to the industrial North was fueled by wages and jobs that, while still discriminatory, beat picking cotton as a sharecropper on some plantation. As the American Century matured, people of color could do very well working for companies like Ford. The doors of higher education also opened wider making it possible for Clarence Thomas to oppose affirmative action. Now the study shows that era is in danger of ending.
The black-white gap in male earnings has declined historically, with a large decline from the 1960s to the mid 1970s, but there has been much less improvement over the past three decades.
A startling 45 percent of black children whose parents were solidly middle income end up falling to the bottom income quintile, while only 16percent of white children born to parents in the middle make this descent.
So think again of those Ford workers who must decide whether to take their $70,000. First, do you take the $70 grand at all? It’s a lose/lose proposition. There are broad hints that if you don’t take this half-a-loaf now you could end up with nothing when they lay you off. Then what if you do take the money? You probably have to choose between your children’s education and your retirement, after you pay taxes which Mr. Mullaly probably manages to avoid.
You may remember the old shell game where some quick-handed, fast-talking con man moved an object around under several walnut shells. The idea was for you to guess which shell held the prize. Bob Barker turned it into choosing which door held the prize. The buyouts and Brookings report open that door only to find an empty room and a game rigged against us.
An era has ended, throwing Americans out into the blizzard that characterizes a post-industrial world where winds of change can sweep in with enough force to knock you off your feet, the cold realities of technological change and a global economy numb even those insulated against them, and the shapeless drifts of too many media, corporate and political snow jobs bury those unable to escape.
Etta Moten sings the final lines:
Forgetting him, you see,
Means you’re forgetting me.
Print Posted by: liberalamerican
