Labor Pains

 With Labor Day just around the corner, lets see how US corporations are helping workers get back on their feet in this deep recession.

First, there is General Electric (GE) whose CEO Jeff Immelt is the chair of President Barack Obama’s Council of Jobs and Competitiveness.  He sets a good example as he has outsourced thousands of US jobs and also used tax loopholes to pay no corporate taxes on profits of $14 billion in 2011. For this record of national commitment he has been rewarded by the president.

But wait! There is now a move by GE to start creating manufacturing jobs again in the US.  What has produced this change in policy? Could it be a concern for the national economy or the American worker?

No, not really. It is based on the fact that wages in manufacturing have sunk so low, they are now “competitive” with China. More specifically, investment in a new facility in the US was contingent on the union accepting the “competitive wage” (in the language of GE) of $13-$14 per hour.  This is down about 40% from previous manufacturing pay scales for GE workers, but GE knows high unemployment has a way of convincing workers to take whatever they can get.

Then there is Caterpillar Corporation, a notorious bulldozer of workers and unions. As reported in the New York Times: “Despite earning a record $4.9 billion profit last year and projecting even better results for 2012, the company is insisting on a six-year wage freeze and a pension freeze for most of the 780 production workers at its factory here. Caterpillar says it needs to keep its labor costs down to ensure its future competitiveness. …”

This prompted a strike at the Joliet, Ill plant which was only recently settled.  It was settled because the workers gave Caterpillar essentially everything they wanted. As reported “the six-year contract that contained almost all of the concessions the company had demanded.”

The corporations in the US understand very well that a crisis is a terrible thing to waste.