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The Fall of General Motors and the Three Paths to the Middle Class

June 4th, 2009 | Amy Traub

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.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared in DMI Blog on June 2, 2009. Reprinted with permission by the author.

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