Labor Pains, Part 2

(...a continuation of a blog topic I started earlier in 2006)

It was the summer of 1979. Thanks to a little help from my father, I had landed a summer job at the Electro-Motive Division of General Motors in suburban Chicago. EMD made locomotives there back in those days, meeting the needs of not only US railroads, but virtually every nation around the world.

I worked the second shift in the Parts Department. Known as "the country club" among other less fortunate workers, it was the least stressful and most comfortable building to work in (even though there was no air conditioning). I would pack parts orders, and then just hang out until quitting time.

Of course, the foreman always came by to offer overtime, which amounted to three hours at time-and-a-half (not to mention shift premiums). I didn't care that I got home at 4:30 in the morning, about the time the sky was turning orange. I was making money hand over fist.

Thanks to union rules (it was a "closed shop" in Illinois, meaning all hourly workers had to join the UAW), the foreman could not enter the workers' lockerroom. When I was done with my tasks, I would go sit on a bench in front of my locker, and work on a massive 5-credit hour independent study I was doing that summer on the Apostle Paul. I was untouchable (and receiving college credit at the same time).

And when I really got bored (like during those "overtime" hours, I would hop on a forklift and drive around aimlessly, picking up a pallet, dropping it somewhere, and repeating the process until about 30 minutes before quitting time (which was the unofficial quitting time for employees, because everyone simply quit working).

I made about $6000 that summer in 11 weeks. I know a lot of students who would like to earn money at that rate in 2006. That General Motors plant is now demolished, the jobs having vaporized and moved elsewhere. And we sit and scratch our heads, wondering why General Motors in teetering on the verge of bankruptcy.

Fast-forward to 2006: The exodus of US manufacturing facilities continues unabated. A story making the rounds from the Associated Press (and appearing here at MSNBC) tells the tale of Electrolux, the Swedish conglomerate who has closed up shop in Greenville, Michigan, and moved to Juarez Mexico.

Electrolux makes far more than their fabled vacuum cleaners ("Nothing sucks like an Electrolux" was their storied tagline in the early-1970s): they make everything from Frigidaire refrigerators, washers, and dryers to Weed Eater lawnmowers.

And the town of Juarez loves them.

It was only a few years ago that Juarez, the seedy border town across the river from El Paso, had lost many of its jobs manufacturing clothing and other cheap items to the Chinese. Shipping costs for these inexpensive, lightweight items was a moot point, so low-cost labor won out. Unemployment was rampant.

But a long list of US companies has set up shop in this arid desert oasis, where labor costs run about one-tenth that of US factories. Consumer durables become an obvious target, because they can be easily (and more cheaply) shipped back to the US for retail distribution. Mexican workers, who might be toiling for what we would call slave wages, are gleeful in their new prosperity, buying houses and enjoying an American lifestyle.

Remember, $20,000 will still buy a lot of house in Mexico. In the US, it will get you a late-model used car.

So the outflow of US jobs continues. It was predictable, given what I experienced 27 years ago. Back then the unions were strong and could negotiate enormous salary and benefits packages for workers. But in recent years firms have wised up and outsourced or offshored much of their manufacturing, dealing the unions a crippling blow.

Of course, this leaves many displaced American workers. Imagine having grown up in Greenville, Michigan, and being the third generation in your family to work at the refrigerator factory. And then one day you get a pink slip announcing that your job has been permanently terminated. ¿Se habla Español?

No doubt it is a blow straight to the estómago.

But this is the reality of a global economy. As Thomas Friedman so direly reported in The World Is Flat, there are no more guarantees in the employment sector. Jobs are not an entitlement, and if you think you can hang on to yours for 30-40 years, think again.

As Friedman continues, jobs will always gravitate toward the low-cost provider. Unions can say goodbye, because it is a buyer's market for labor. Workers (and students) must realize that it is incumbent upon them to continually be in a state of retraining, because if you cannot stay one step ahead of your cheaper peers, you'll be on food stamps before the week is over.

Even accountants must stay ahead of the curve, because over 100,000 US tax returns were filed from India in 2005. And X-ray readers are also being outsourced: US hospitals can simply email an X-ray to India in the evening, and have a reading back in the US by morning.

The sun never sets on the new economy.

On this Labor Day we must be ever thankful for what employment we have, but also ever vigilant to protect it. We must continue to study, acquire new skills, and keep our value-added contribution better than eager workers located elsewhere. If we don't, we stand to lose everything...our jobs, our homes, our dignity.

And that's something worth working for.

Dr "Keep Studying" Gerlich