Weather hot, economy not

63,000 jobs lost in June alone

Sitting around talking, women can sometimes be heard to say, “Is it hot, or is it me?” Same question applied to U.S. jobs, “Is the economy lousy or is it me?” results in the same answer: “It’s lousy.”

General Motors grabbed headlines in June when the corporation announced it was axing 25,000 jobs, 22 percent of its workforce. Winn-Dixie, a major supermarket chain in the South, followed suit, closing 326 stores and putting 22,000 people in the street. Auto interior supplier Lear jumped in, cutting 7,700 jobs from its 110,000. The largest aluminum corporation in the world, Alcoa, said an additional 6,500 workers would lose their jobs on top of the 1,800 already laid off. In a refreshing moment of candor, Alcoa added that the layoffs would increase its profits to $276 million for the second quarter. That’s 63,000 jobs down the tubes in June alone. It’s lousy hot.

The Bush administration, facing declining support for its foreign policy, especially the Iraq war, seized on an optimistic prognosis by one business group as a sign its domestic policies are working. The Conference Board, an international group of banks and corporations, announced that consumer confidence in the U.S. grew to its highest level in three years. But many workers aren’t buying it.

Donald Boggs, president of the Detroit Metro AFL-CIO, described the impact of layoffs and plant closings. “One job, like at the Cadillac plant on Clark St. creates three to seven more jobs,” said Boggs. “When GM shut that plant down, the guy who sold gasoline is gone, the guy who sold sandwiches, he’s gone, and on it goes until there is nothing left. It decimates a community. It’s NAFTA and all those trade agreements — we lost 200,000 jobs in Michigan alone — that is destroying families, destroying Detroit.”

In a related development, Ron Gettelfinger, president of the United Auto Workers, challenged General Motors’ claim that it needs “relief” in the form of workers and retirees opening their contract to take cuts in their medical benefits. Gettelfinger pointed to the nearly $20 billion GM has on hand, $1.1 billion in dividends paid out in 2004, and the $410 million salary paid to GM CEO Rick Wagoner. “We’re not going to go out here and jump off a cliff and UAW retirees and active workers be the ones to make a huge sacrifice,” he told The New York Times.

Boggs laughed at the claim that we are in an economic recovery. “It might be recovery for the affluent. But the middle class, there is no recovery in that part of the economy. These corporations just go anywhere and impoverish everyone, here and overseas. There has to be labor standards in these trade agreements.”

Turning to solutions, Boggs took an optimistic view: “This is an interesting time — people moving around, talking about new ideas. One in six families living in poverty, no health care, I think it’s time to take a look at nationalization.”

To the south, Alabama heat and humidity tinged the thoughtful voice of D. Stewart Buckhalter, president of that state’s AFL-CIO. In recent years, Alabama lost 30,000 union members, leaving 60,000 workers carrying union cards. With nonunion Winn-Dixie closing 35 of 110 Alabama stores, 12 in Birmingham alone, even nonunion service-sector jobs are at a premium.

“Wal-Mart is the reason Winn-Dixie is going down,” said Buckhalter. “It’s tough, very tough, Alabama is a ‘right to work’ state, but I would say in the past few days, there is more talk of union at Wal-Mart. Something’s got to be done.”

Buckhalter sees political action and change as key to stemming the job hemorrhage. “There is no magic bullet, but the Democrats have to get back to what brought us to the dance. Bread and butter issues — that is what got us the middle class. They have to put out a message for jobs, for health care. Democrats, politicians, have got to stop rewarding companies who send our jobs to other countries and start getting the government to create jobs here. Right now.”

The Financial Times of London reported that between 2003 and 2004, the Bush administration’s “free trade” policies doubled U.S. corporate investment everywhere in the world but the United States. In 2003, U.S. corporations invested $141 billion in other countries. In 2004, that number skyrocketed to $252 billion.

In the same period, corporate CEOs saw their income increase by 12 percent to an average of $9.8 million a year, according to Corporate Pay Watch. The average worker saw his or her pay increase by only 2.2 percent to $27,485 for the same time period.

Whose economic recovery?