Two-tier wages: a community-killing virus

Workers’ Correspondence

Lockport, N.Y., was once a seemingly growing, family oriented, peaceful community. The historic homes were beautifully maintained and added to the small city’s culture. Original buildings and its lock system along the Erie Canal were preserved for historical value.

Lockport was the type of small city you wanted to live in: growing old with your children and grandchildren, all close by for family reunions and the Fall Corn or Apple Festivals. That is, until a major workforce was slashed by numbers and by viral pay cuts at two different auto parts plants, Delphi and American Axle.

In 2003 and 2004, new contracts were negotiated to implement the two-tier wage system, the same two-tier system recently implemented in the new Big Three auto contracts. New hires were to receive the second-tier wage, $14.50 an hour, approximately $10 to $14 less than the first tier.

Incentives (buyouts) were offered to those close to retirement, enabling the companies to cut their workforce. In Delphi’s case, the workers, when asked to ratify the contract, were told that it would keep Delphi from having to file for bankruptcy. American Axle workers were told it would keep their plant open and viable.

Just two years later, Delphi filed for bankruptcy, and American Axle has all but shut its doors, with only a handful of workers and a few security staff remaining as of August. Within four years of the original contract with Delphi, two supplemental, unratified (by UAW members) contracts were signed and implemented, bringing the first-tier pay scale down to the second-tier $14.50-an-hour level. These pay cuts have taken the working-class family into an even lower class position, just above poverty level.

Since the two-tier wage system went into effect, this once beautiful, small, historical American city has become a crumbled, dilapidated and sad community. Historical homes have been left to rot and to be foreclosed upon in large numbers. Local businesses are slowly either leaving or have just plain closed.

According to U.S. Census Bureau reports in 1997 and 2002 (the next census report is due to be released early 2008), in 1997, manufacturing companies in Lockport totaled 71; in 2002 the number was 43. Accommodation and food service establishments in 1997 totaled 133; in 2002 there were 57. Retail trade companies in 1997 were numbered at 210; in 2002 only 81 were left. The shrinking of a working-class wage in this wonderful city has cut it deeply, leaving it to continue its bleeding to this day.

Families have been hard hit in this area. The cost of living hasn’t gone down; however, the average wage has. In 2005 the median household income of Lockport, N.Y., was $47,000. The median house value was $93,000. Now, after the two-tier virus has taken full control, the 2007 median household wage is $35,000, and median house values have dropped to $63,000.

This same virus is spreading across all of America, taking with it the important working middle class of America and its values. The new contracts with the top three U.S. auto companies include the exact same viral two-tier wage system that has all but killed one small city, and probably many others just like Lockport.

At what point does America wake up and realize globalization does not mean we have to lower our values and quality of life, becoming a two-tier nation. Once that happens, the constitutional right of “the pursuit of happiness” will become one for the first-tier wage earners only, leaving the remaining Americans to become crumbled and dilapidated much like my old home in Lockport, N.Y.

Robin Bouchard-Little ia a freelance writer, wife of a GM/UAW worker, and mother of two, living in Parma, Ohio.