Jenifer Riddagh

Since mid-October, Riddagh, a 52-year-old single mother of two, has been on strike along with 70,000 California grocery workers who are holding the line against demands by Safeway and other grocers that would decimate the middle-class life these workers have carved out. Although Safeway generated more than $10 billion in profits in 2002, the company is proposing freezing wages for two years and requiring workers who make an average $19,176 a year pay an average $4,944 a year per family to maintain their current health care benefits.

Losing affordable health care isn’t Riddagh’s only fear. Safeway’s insistence on a two-tier wage scale in which new workers would never earn as much as current workers, ultimately threatens her job.

“If a co-worker suddenly makes much less than I do, workers like me will have targets on our heads as managers are ordered to do all they can to make us quit or be fired.”

Today, hardworking Americans such as Riddagh risk being dragged down in a domestic race to the bottom driven by policies pursued by the Bush administration and its Big Business backers. Corporations are freely sending good jobs abroad while cutting the wages and benefits of jobs that can’t be shipped out. And many of the few new jobs they are creating in the United States—temporary jobs and lower-wage jobs in health care, social assistance, food services and accommodations—cannot sustain working families.

Short term, such tactics may increase corporate profits and drive up share prices on Wall Street. But ultimately, analysts say, these tactics will undermine middle-class workers’ economic stability, making it harder for them to protect against attacks on overtime, unemployment insurance and health insurance. And middle-class workers and the working poor could wind up competing for public resources while the rich withdraw into their gated communities and private schools. Seeking to reverse these trends, unions and their allies, including faith-based and community groups, are speaking out for workers’ freedom to form unions and plan to make the freedom to form unions a top election-year issue. Union members also are getting set for tough contract negotiations this year, with health care, job security and a secure retirement as the top bargaining goals (see story).

“Employers want workers to become transients for whom no one has any responsibility or obligation to care about,” says Harvard law professor and bankruptcy expert Elizabeth Warren. Warren recently co-authored, with her daughter, management consultant Amelia Warren Tyagi, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.

Corporations are “asking steelworkers who used to make $26 an hour with good benefits to get by on $8 an hour with no benefits,” Warren says. “The middle class is up against the wall while large corporations and the wealthy reap the benefits. They want everyone to be self-employed, which doesn’t mean having an opportunity to strike it rich but to be a contractor with health and unemployment insurance stripped away. This is a matter of patriotism—our country will not be strong without a strong middle class, and our middle class will not be strong without good jobs.”

New jobs are low-wage jobs

After six consecutive months of losing jobs, the economy began creating jobs last August. With more than 10 million workers currently unemployed—2 million of them for more than six months—“creating 50,000 jobs or so a month is better than losing them as we did for two and a half years,” says Larry Mishel, economist and president of the nonprofit Economic Policy Institute (EPI). “However, it takes at least 150,000 new jobs a month just to absorb new workers, and this president promised us over 300,000 jobs monthly if we passed his tax cut, which we did.”

	Low-wage economy: Laid off from LTV Steel in 2001, Ronald Ribinskas has tried to support his family with a series of low-wage jobs that offered no health or pension coverage.

While our workforce contends with an ongoing net job loss, many of the too-few jobs being created, especially those available to the 75 percent of U.S. workers without college degrees, are low-wage, service-sector jobs paying far less than the 2.7 million manufacturing jobs lost since President George W. Bush took office. In fact, the top three job-creating sectors in October 2003—retail, temporary help service firms and food and drinking establishments—provide wages that are 30 percent to 57 percent below the $521 national weekly average for all industries, according to the outplacement firm Challenger, Gray & Christmas.

Worse, many of these new low-wage jobs won’t last, because consumer spending likely will decrease this year, warns economist James Galbraith, a public policy professor at the University of Texas at Austin. The higher consumer spending that accounted for an 8.2 percent spike in the third quarter 2003 gross domestic product resulted largely from working families spending one-time tax credits and home refinancing dollars to replace worn-out necessities such as automobiles and computers, he says.

Businesses are hiring workers to help service those orders. But after the spending subsides, the need for the new workers will decrease and the number of workers without jobs will increase, Galbraith says. Many of the new jobs are helping working families “push their financial difficulties back for a year or so, perhaps as long as the November presidential elections,” he says.

“The Republicans front-loaded the middle-class tax cuts, keeping the acceleration of tax cuts for the rich until after the 2004 presidential election. The parts of the tax cut still to come won’t be nearly as effective in keeping the economy growing because the rich spend less out of every tax-cut dollar.”

In The Two-Income Trap, Warren and Tyagi point to the cataclysmic shifts that have undermined working families’ financial stability over the past three decades, requiring both spouses to work to afford such basics as health coverage and tuition for their children. “They’re unlikely to have savings, which are zero for the average family, down from 11 percent just 25 years ago,” says Tyagi. “If one income disappears or is simply reduced, they may lose everything.”

Community—Union Alliances     Alex Cañez  More and more union leaders are joining with community allies to enable workers to win a voice on the job—partners such as the Valley Interfaith Project, a Phoenix-based coalition of religious and community organizations Massachusetts Institute of Technology Professor Paul Osterman profiles in his recent book, Gathering Power: The Future of Progressive Politics in America. In the past three years, Valley Interfaith and a related group, the Tucson, Ariz.–based Pima County Interfaith Council, have worked with more than 400 mostly Latino immigrant workers to win representation with the United Union of Roofers and Waterpoofers Local 135. The group talked with developers to explain that their contractors typically offered workers no overtime or sick pay while verbally abusing workers, denying them water breaks and cheating them out of pay. The interfaith project’s activity “greatly enhances our credibility, because then it’s not a union or nonunion issue, it’s a justice issue,” says Roofers President John Martini. The Roofers have filed unfair labor practice charges against one contractor, Metric Roofing, which the union says fires workers who seek to join a union. The interfaith groups organized community-supported picket lines and joined with influential Tucson construction business owner and land developer Bill Estes, who helped them meet with representatives of Pulte Homes, a developer that provides business to Metric. “These groups help us talk...with politicians and others,” says Alex Cañez, 32, a Tucson roofer and father of three who was fired from Metric last fall after he sought to join a union. “We’d also like to give many thanks to them for the support we have received.”

Holding the line for middle-class jobs

Annual wages in the top three sectors of job growth in 2004 and 2005—administration and support, health care and social assistance and accommodations and food—will average $35,855, according to a U.S. Conference of Mayors study released Nov. 12. From 2001 to 2003, the wage in the three sectors that saw the most job loss—durable manufacturing, nondurable manufacturing and information technology—averaged $43,629. The gap is a whopping 18 percent wage decline, the study found.

Yet the low wages in many new service-sector jobs don’t completely reflect the real decline in earnings. “Most new jobs are far worse, because they’re likely to come without a good pension plan and health insurance,” says Barry Bluestone, director of the Center for Urban and Regional Policy at Northeastern University in Boston. “Unfortunately, the government doesn’t keep good track of that data.”

Economist Jim Diffley, who authored the mayors’ study, agrees. “We do know, for instance, that about 92 percent of manufacturing workers are offered health coverage, while in retail it’s only about 62 percent.”

Workers need health coverage, but it also must be affordable. “There’s a big difference between a plan requiring a $300 co-payment for a child’s $30,000 operation and one with a $10,000 co-payment,” says David Blitzstein, UFCW director of negotiated benefits. “Catastrophic medical costs are devastating people, causing over 50 percent of personal bankruptcies today,” he says.

Hold the Line for Health Care, the union-movement-wide campaign to support the striking and locked-out grocery workers—including UFCW, Bakery, Confectionery, Tobacco Workers and Grain Millers and SEIU members, and the Teamsters who refused to cross picket lines—recognizes the critical importance of protecting good health care for service workers “who otherwise wouldn’t have anything like it if they were not organized,” according to Blitzstein. The outcome of the strike and lock-out, he adds, will influence the actions of other employers of lower-wage workers—members of Hotel Employees and Restaurant Employees, SEIU and UNITE, for example—who can support their families today because they have good health benefits.

With union contracts, service-sector workers have access to health coverage and retirement plans. Those benefits provide them substantially more economic security than workers without a voice on the job, such as those at Wal-Mart, where wages are so low many cannot afford health coverage.

Job retraining requires jobs

	Retraining requires jobs: Many workers, such as laid-off Maytag employee Heather Paul, find that retraining for a new career doesn’t solve their need for a family-supportive job.

While UFCW members and others are holding the line for wages and benefits, workers such as Steelworkers and Machinists members are struggling to retrain for new jobs after multinational corporations shipped their jobs to low-wage nations that lack environmental and worker protections. Such workers are among the likeliest to qualify for retraining because of the efforts of union activists and worker-friendly legislators who secured the 1974 Trade Adjustment Assistance (TAA) program—which provides support for workers who lose their jobs because of trade—and pressed for its renewal and expansion in 2002. Workers who qualify for TAA are entitled to Trade Readjustment Allowances (TRA), income support that extends unemployment insurance benefits and provides a small health care tax credit.

Historically, retraining is TAA’s centerpiece. “But without well-paying jobs on the other end, you’re training for nothing,” says Paul Osterman, Massachusetts Institute of Technology professor of management and urban studies.

Steelworkers member Ronald Ribinskas worked nearly 14 years for LTV Steel in Cleveland before the company filed for bankruptcy and closed its doors in December 2001. Ribinskas then participated in an eight-month job training program funded through the TAA. But his new role as a webmaster came as the U.S. high-tech service industry crashed along with the so-called New Economy—and Ribinskas remained unemployed. “Experienced IT people were out of a job,” says Ribinskas. “It was tough to break into it without any experience.”

Ribinskas, who with his wife Mary has four children under age 9, took whatever work he could, primarily low-wage jobs through a temporary agency. Those jobs offered no health coverge or pension benefits, while paying $5 less an hour than he earned at LTV—an all-too-common experience for laid-off manufacturing workers. A study by the Institute for International Economics examining manufacturing job losses from 1979 to 1999 found one-fourth of factory workers who were re-employed took pay cuts of 25 percent or more.

Looking at the current U.S. economy Ribinskas observes, “Seems there’s just low-paying jobs out there now.”

In Galesburg, Ill., Maytag laid off 380 IAM Local 2063 members in September. They are the first of 1,400 Machinists who will be out of work by December 2004 when Maytag closes the plant and moves the work to Mexico. Job counselors have encouraged many Maytag workers to retrain for the health care field.

With some college credits under her belt and unemployment benefits coming in, 34-year-old Heather Paul, a single mother of three, plans to train as a nurse, but the two-year nurse program at the local community college doesn’t begin until August 2004.

Many of Paul’s co-workers face even more uncertain futures. Needing to return to work as soon as possible, many are training to become X-ray technicians, a job that currently pays a $14.66 hourly top wage at the two local Galesburg hospitals.

That salary approaches the average $15.50 hourly wage a Machinist earned at Maytag. But “it’s a phony wage,” says Local 2063 President David Bevard, “because the hospitals’ health insurance isn’t near as good as the plan that we have.”

What’s more, Galesburg’s two hospitals are fully staffed right now. Says Bevard: “We’ll have to sell our homes in a community where housing prices have already tanked, taking our spouses and children away from friends and family members, including grandparents.”

To get full employment: Vote

Unless Congress intervenes, the U.S. budget deficit, on course to reach a record $500 billion, will explode even more next year when the Bush tax cuts for the rich accelerate, according to Galbraith. “Then you’re going to have people saying we must deal with this huge budget deficit by cutting spending and privatizing Social Security and Medicare. And these actions always tend to depress an economy.”

Ultimately, says Galbraith, the Bush administration’s long-term strategy is not full employment because “its Big Business constituency prefers 5.5 percent to 4 percent unemployment.”

“At 4 percent unemployment, you have trouble finding workers and have to pay them more, unions get stronger and your political opposition strengthens.”

To stop the multinational corporations’ assault on good jobs, working families must defeat Bush and his elected allies, Galbraith says. “If you want full employment, you have to vote for it.”

Yet tragically, Osterman says research shows workers who have the least household income—those most imperiled by a low-wage service job economy—vote at much lower rates than those with substantial financial resources. “In conjunction with community and religious allies, unions are on the right track, reaching out to these workers by continuing to organize around issues including the economy and the importance of voting.”

At the same time, says Blitzstein, workers “are fighting back, because they don’t want to become the working poor.

“Nobody wants strikes. But the grocery workers’ strike is a new defining point for all workers, both union and nonunion, faced with employers trying to establish a low-road to minimum wages and ineffective benefit programs. Part of our message to the community is this: ‘We are you—if our wages and benefits can be slashed, and we have a union, what hope do you have?’ ” @