Always Low Wages Always

[Lyion]

This correlates to our GM Discussions and even more to whats happening to our countrys living wage. For the record, I disagree with Krugman about 75% of the time, but he makes very good points here. I dont agree with his Social Security points, but the average Wal Mart Salary and the fact they are our nations largest employer should send up warning flags to many people.


By PAUL KRUGMAN
Published: May 13, 2005

Last week Standard and Poor's, a bond rating agency, downgraded both Ford and General Motors bonds to junk status. That is, it sees a significant risk that the companies won't be able to pay their debts.
Fred R. Conrad/The New York Times

Don't cry for the bondholders, but do cry for the workers.

Standard and Poor's downgraded GM and Ford sooner rather than later because it believes that the public is losing interest in S.U.V.'s. But the companies were vulnerable because they still pay decent wages and offer good benefits, in an age when taking care of employees has gone out of style. In particular, they are weighed down by health care costs for current and retired workers, which run to about $1,500 per vehicle at G.M.

So the downgrade was a reminder of how far we have come from the days when hard-working Americans could count on a reasonable degree of economic security.

In 1968, when General Motors was a widely emulated icon of American business, many of its workers were lifetime employees. On average, they earned about $29,000 a year in today's dollars, a solidly middle-class income at the time. They also had generous health and retirement benefits.

Since then, America has grown much richer, but American workers have become far less secure.

Today, Wal-Mart is America's largest corporation. Like G.M. in its prime, it has become a widely emulated business icon. But there the resemblance ends.

The average full-time Wal-Mart employee is paid only about $17,000 a year. The company's health care plan covers fewer than half of its workers.

True, not everyone is badly paid. In 1968, the head of General Motors received about $4 million in today's dollars - and that was considered extravagant. But last year Scott Lee Jr., Wal-Mart's chief executive, was paid $17.5 million. That is, every two weeks Mr. Lee was paid about as much as his average employee will earn in a lifetime.

Not that many of them will actually spend a lifetime at Wal-Mart: more than 40 percent of the company's workers leave every year.

I'm not trying either to romanticize the General Motors of yore or to portray Wal-Mart as the root of all evil. GM was , and Wal-Mart is, a product of its time. And there's no easy way to reverse the changes.

What should be clear, however, is that the public safety net F.D.R. and L.B.J. created is more important than ever, now that workers in the world's richest nation can no longer count on the private sector to provide them with economic security.

When they reach 65, most Wal-Mart employees will rely heavily on Social Security - if the privatizers don't kill it. And many Wal-Mart employees already rely on Medicaid to pay for health care, especially for their children.

Indeed, a growing number of working Americans have turned to Medicaid. As the Kaiser Family Foundation points out, that's why children have for the most part have retained health coverage, despite a sharp decline in employer-based health insurance since 2000.

Yet our current political leaders are trying to privatize Social Security and reduce benefits. And they are slashing funds for Medicaid even as they give big tax cuts to people like Mr. Lee.

The attack on the safety net is motivated by ideology, not popular demand. The public isn't taken with the vision of an "ownership society"; it seems to want more, not less, social insurance. According to a poll cited in a recent Business Week article titled "Safety Net Nation," 67 percent of Americans think we should guarantee health care to all citizens; just 27 percent disagree.

The question is whether the public's desire for a stronger safety net will finally be seconded by corporations that haven't yet adopted the Wal-Mart model of minimal benefits and always low wages.

Last year Richard Wagoner Jr., G.M.'s chief executive, gave a speech about the costs of America's "Kafkaesque" health care system that sounded a lot like my recent columns. And his company has made it clear that it likes Canada's system: in 2002 the president of General Motors of Canada and the head of the Canadian Auto Workers signed a joint letter declaring that "it is vitally important that the publicly funded health care system be preserved and renewed."

But according to The Journal Register News Service, which covered Mr. Wagoner's speech, he "stressed later to reporters that he was not proposing a national health care plan." Why not?

[Tikker]

So, you're comparing working at a manufacturing plant to working at a retail warehouse


Don't you think the problem is more that people are lazy, and greedy at the same time?
they're working throw away jobs, and expect to be able to support a family, and get good benefits?

I don't think so chester

Get an education, a real job, and quit whining (this is aimed at people in general)



I dunno, but comparing working for GM to walmart, is apples to oranges for me

[Narrock]

People will always complain about not making enough money. The typical blue collar mentality is, "overworked and underpaid." If you want to make more money go back to school and learn some new skills. Wal-Mart or any other employer doesn't owe you a dime more than they're already paying you. You are getting paid commensurate to your skill and/or education level.

[Ironfang]

GM only wants a national healthcare plan that will not raise the personal and corporate tax rates by 10% each.

Hell, if we could get rid of national healthcare in Canada (or the crappy CPP - Social Security) I would be all for it. Of course, I am not the average person as I make way more money than the average Canadian.

[Yamori]

If I were the CEO of Ford or GM I'd be hiring lots of imaginative people, to try and come up with some actually interesting and different new models that are of high quality. Thats Ford/GM's major problem really. Stagnation and poor quality compared to Asian cars.

As for health care... ugh, just what we need.
More Freaking Taxes.
More Socialist Policies.

Hey, the fact that the government forcefully takes a huge chunk of your income... and then forcefully takes 15% more for social security. Hey, whats another unoptional 10% going to hurt, right?

[Lyion]

GM has some of the best and innovative cars out there.

The problem is each car they sell has an extra 1500 to pay for benefits, so they lose ground against the cheap foreign cars.

[veeneedefeesh]

I have owned a grand total of two cars made by GM, both were "marvels of modern technology" ie they broke down constantly and were designed so that they were almost impossible to work on unless you had "GM specific proprietary tools" On one of those, in order to change a tire you had to have a special tool to remove the hubcaps which meant you had to pay exhorbant prices just to change a freaking tire or you could of course break the hubcaps to get them off in which case you could either drive around looking ghetto or you could pay for a piece of hardware you shouldnt have needed to pay for if the vehicle was designed properly in the first place. In order to change the battery you had to remove a "support bar", the windshield wiper water reservior, and a "restraining bar" that required ...yep you guessed it a tool that only GM service centers had. Sorry Lyion I dont call that innovative I call it corporate greed. I will start buying American cars when they start producing something that isnt crap.

Dont you think that Nissan (who has a manufacturing plant in Mississippi) is paying the same costs for health care of it's employees that GM is paying? This sounds like another case of some greedy fucker who makes way more than is reasonable wanting to jsutify why his company is doing badly...could it be the 17.5 million dollar salaries? naaa couldnt be that....If you were to fire one fucker making 17.5 Million you could remove the $1500 health care costs for 11,666 cars sold. No thanks I would rather buy Japanese. Maybe the American car companies will crash altogether and the next time they build it up they will recognize that the greed of a few are effecting many.

The American dream has become to step on as many people as possible in order to get another Mercedes Benz and a house in the Hamptons.

[Phlegm]

GM has some of the best and innovative cars out there.

The problem is each car they sell has an extra 1500 to pay for benefits, so they lose ground against the cheap foreign cars.

The problem with GM, in my opinion, is that they have too many brands competing with each other. They should have a luxury brand, Cadillac, and a lower price brand, Chevrolet. They should get rid off all the others.

[Tikker]

GM has some of the best and innovative cars out there.

The problem is each car they sell has an extra 1500 to pay for benefits, so they lose ground against the cheap foreign cars.

most american vehicles are poor quality compared to the same priced foreign equivalent


that's why they're losing

[Lyion]

You have your opinion, I have mine and J.D. Powers.

[mofish]

J.D. Powers is a biased creation of the American automotive industry. Are you trying to argue that American cars are higher quality, more reliable, more efficient, more durable than asian or european cars?

[Jimmy Durante]

General Motors Corp. and Japanese rival Toyota Motor Corp. are discussing a possible technology-sharing deal that could enable the two companies to offer a wider range of gasoline-electric hybrid vehicles sooner than if they worked alone, according to individuals familiar with the talks.

Details of the discussions remain sketchy. GM Chairman and Chief Executive Rick Wagoner is expected to travel to Japan soon to meet with top officials from Toyota. Mr. Wagoner is scheduled to attend the 2005 World Expo in Japan's Aichi prefecture, where Toyota has its headquarters.

The discussions come at as GM faces its worst crisis since the early 1990s, in part because it has lost U.S. sales to Toyota and other foreign auto makers. Toyota Chairman Hiroshi Okuda recently told reporters in Tokyo that Detroit's troubled car companies needed "breathing room," adding that Toyota may try to help by sharing technology with its U.S. rivals.

[xaoshaen]

GM has some of the best and innovative cars out there.

The problem is each car they sell has an extra 1500 to pay for benefits, so they lose ground against the cheap foreign cars.

most american vehicles are poor quality compared to the same priced Japanese or Korean equivalent


that's why they're losing

Fixed that for ya.

[Tikker]

GM has some of the best and innovative cars out there.

The problem is each car they sell has an extra 1500 to pay for benefits, so they lose ground against the cheap foreign cars.

most american vehicles are poor quality compared to the same priced Japanese or Korean equivalent


that's why they're losing

Fixed that for ya.

Not really

Compare almost any foreign car, in the same price range, same classification, and the american vehicles are generally poorer quality

It's not that they're shitty vehicles by any stretch, but the quality is just generally higher on the imports

[Darcler]

My dad works at WalMart. He was forced to retire from his other job and was going nuts at home all day, so he went to WalMart to work as a dairy stocker.


I didnt read this thread.

[Rust]

GM only wants a national healthcare plan that will not raise the personal and corporate tax rates by 10% each.

Hell, if we could get rid of national healthcare in Canada (or the crappy CPP - Social Security) I would be all for it. Of course, I am not the average person as I make way more money than the average Canadian.

You're also fiscally far to the right of the average Canadian. And on some social issues, you're more of a libertarian, I'd say.

--R.

[Rust]

You have your opinion, I have mine and J.D. Powers.

Yeah, JD Powers says the Big Three US car makers are lower quality than Japanese, and have more problems on average.

I posted that some time ago.

Here is the 2004 press release.

You seem to be having issues with reading again...

--R.

[Narrock]

My dad works at WalMart. He was forced to retire from his other job and was going nuts at home all day, so he went to WalMart to work as a dairy stocker.


I didnt read this thread.

When I retire I'm gonna gonna work at Wal-mart too. I wanna wear one of those blue smocks and greet people as they come in and hand them a cart.

[Lyion]

Nice personal insult there, Rust. I expect an apology from you, but given your arrogance and ignorance I don't expect it. Especially given the paradox of your statement in regards to reading comprehension.

Go to JD Power site and find out what Full Size Truck are the top 5 overall. Then do a comparison of the overall models. In most categories American Cars place well. In some they win, in some they lose.

I can understand you hating America, since you are Canadian and probably brainwashed by government enforced media, but its a shame that most of the Muricans here don't actually compare cars.

Then again, we live in the 'me' age, and it'll be a shame if the US ends up with ludicrous taxes, mediocre business', and piss poor health care like Canada. Unfortunately it may happen

The top American nameplate, Cadillac, cruised into second place among all branded lines with a score of 93.

You have your opinion, I have mine and J.D. Powers.

Yeah, JD Powers says the Big Three US car makers are lower quality than Japanese, and have more problems on average.

I posted that some time ago.

Here is the 2004 press release.

You seem to be having issues with reading again...

--R.

[Arlos]

Oh the horrors of Canada's "piss poor health care". What a crime it would be to have everyone covered by health insurance, and not have to worry about if they'll be out 10 grand they don't have if something should happen. Oh yeah, that would just SUCK, honest. Really. No, I mean it. For true.

-Arlos

[Lyion]

So move. Easy to get citzenship there. Nothing stopping you.

[Harrison]

*marks the imaginary chalk board*

One more communist gone!

[Diabolik]

I was a Wal-Martian last semester of high school first year of college. OMG bad. Bad, bad, bad. That company has a thinly veiled contemptuous attitude toward its workers.

People always ask me why I shop there if I hated working there so much. Economics is the answer.

[Harrison]

I'm going to make a T-shirt that says "I shop at Wal-Mart to piss off hippies"

Actually, I'm going to look and see if someone already hasn't thought of it.

[Rust]

Nice personal insult there, Rust. I expect an apology from you, but given your arrogance and ignorance I don't expect it. Especially given the paradox of your statement in regards to reading comprehension.

You keep saying that US car makers have equal quality to any. This is clearly wrong from the source you cite. The JD Power 2004 Initial Quality Survey (link given above) clearly and unambigiously says that Ford, GM and Chrysler place below industry average in manufacturing quality. Some of their cars are better, some are worse, obviously. Yet overall, they rate below average in the survey. Most notably they are much worse than Toyota Honda or Hyundai, and a bit worse than BMW.

You seem to insist on misrepresenting the survey results for some reason. Why is that?

As to my 'hating America' - stop being childish when someone points out you're misquoting. Better yet - stop misquoting sources, and people won't need to point it out, and then you can stop being childish when you get caught. When did your persistent habit of misuse of data become other people's fault, anyway?

--R.