Special Report: Blue-collar, unemployed and seeing red
Reuters – Scott Stevenson stands outside the locked gate of a shuttered small manufacturing plant he once worked … .By James B. Kelleher James B. Kelleher – Wed Sep 15, 8:09 am EThttp://www.freerepublic.com/focus/f-news/2590915/posts________________________
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FERNDALE, Michigan (Reuters) – Scott Stevenson was only 10 years old when he first heard grown-ups voice the gloomy words that, in retrospect, predicted the disappointing arc his life has taken.
"I remember them actually telling us that our generation would be the first not to be better off than our parents," said the 39-year-old Stevenson. "It was fifth grade and I remember thinking, 'How do you know?'"
Three decades later, the pessimistic prognostication he was so quick to dismiss as a boy now seems, as he put it, "like a prophecy."
Stevenson is one of the 14.9 million U.S. workers who are officially jobless, according to the latest statistics from the U.S. Department of Labor. More depressingly, he is also among the 6.2 million unfortunate enough to have been that way for 27 weeks or more -- a beleaguered cohort that the government dubs the "long-term unemployed."
Over the past four years, Stevenson has lost almost everything. His $38,000-a-year factory job as well as the three-bedroom home it helped him buy are gone. Two years ago, when his mortgage company finally foreclosed on him, he moved into the basement of his parents' home.
"I hate it," he said. "It's driving me nuts. I'm almost 40 years old and I'm not able to take care of myself. But I don't have any other option."
In June, after 99 weeks on the dole, his unemployment benefits ran out. He hasn't had to sell his truck and work tools -- yet -- and he recently picked up some temporary contract work that put a little cash in his pocket. But he spends most of his days at his parents' home, trawling the Internet for jobs that don't pan out or playing computer games -- "anything," he said, "that doesn't cost money."
On warm days, he takes his bike out for a ride around the neighborhood. It's an older subdivision than where he lived, filled with solid-looking but modestly sized brick homes.
It sits alongside I-696, a highway dedicated to Walter Reuther, the union organizer whose strikes against Ford Motor Co and General Motors in the early 1940s forced the U.S. car industry to recognize the United Auto Workers union. In the process, Reuther helped produce this country's blue-collar, middle class, a group whose prosperity helped shape the post-war U.S. economy and was, for decades, the envy of workers worldwide.
Reuther died in 1970 and the dream he helped create began unraveling soon thereafter as employment in manufacturing -- the sector that, together with construction, reliably sustained the blue-collar middle class -- steadily shrank.
But the U.S. recession and the nearly simultaneous restructuring of the auto industry have delivered the most savage one-two punch that class has absorbed in a generation. Of the more than 8 million U.S. jobs lost in the downturn, nearly half were in either manufacturing or construction -- higher-wage sectors that traditionally provided entry-level jobs that turned into well-paying careers jobs for people like Stevenson, whose formal education stopped after high school.
In a midterm election year, where the economy is issue No. 1, his plight and that of millions of men and women like him helps explain the sagging support for President Barack Obama's Democratic party, which is expected to see its majorities in the House of Representatives and Senate eroded in the November 2 vote.
One of the people voting Republican that day will be Stevenson's mom, 63-year-old Joan Stevenson. The daughter of a machinist and a self-described "Jack Kennedy Democrat," she voted for Obama in 2008 but has been disappointed by how little his administration's polices have helped unemployed workers like her son.
"The Democratic Party isn't what it used to be for us," she said. "The philosophy used to be if the Democratic Party was in power everybody got a piece of the pie, and if the Republicans were in power the rich got a piece of the pie. Now, nobody is getting a piece of the pie."
'TOUGH TIME FOR SOME TIME TO COME'
Unfortunately, economists, executives and other labor-market watchers say many of the jobs lost in the downturn, particularly in manufacturing, are never coming back.
That's because in spite of the downturn, and in some cases because of it, companies have continued to invest in labor-saving, productivity-enhancing technology here in the United States as well as offshore high volume, low-margin and labor-intensive work abroad.
"It's competitive forces and technology that (are) taking those jobs and reducing them in both quantity and complexity," said Jeff Joerres, the chief executive of global employment services company Manpower Inc.
And while the construction market will eventually rebound, employment in the sector is unlikely to ever return to the record levels seen at the height of the housing bubble. "What seems very likely," said Gary Burtless, an economist at the Brookings Institution in Washington, D.C., "is that those people who made their living in construction and in manufacturing are going to have a tough time for some time to come."
Prospects for workers like Stevenson will be "much, much worse," according to Burtless. That's because the anemic labor market is forcing unemployed workers with college educations to settle for jobs that don't require their degrees.
Right now, those are just about the only kinds of jobs that seem to be out there, according to a recent analysis of Bureau of Labor Statistics data by the National Employment Law Project. The study, released just before Labor Day, found that while jobs paying $17.43 an hour or more accounted for nearly half the positions lost in the downturn, they have accounted for just 5 percent of those created in the recovery.
Most of the new jobs are concentrated below $15 an hour and in service industries like retail sales, food preparation, waste removal, or health-care.
It's not that jobs aren't being created in manufacturing -- they are. But they are fewer in number and either pay far less than the jobs of old or require technical skills. Landing such work is often impossible without certifications from groups like the Manufacturing Skills Standards Council and the National Institute for Metalworking Skills, which can entail rigorous and lengthy course work.
The upshot, says Joerres, is that the relatively easy path blue-collar workers traveled for two generations to reach the middle class, a path that created millions of consumers with the purchasing power to buy the goods that U.S. companies produced, is narrowing if not altogether disappearing.
The changes are affecting U.S. corporate culture, where Joerres said "we're seeing a bifurcation between entry-level jobs and management." But the implications extend well beyond the manufacturing industry and the Midwest states of Michigan, Ohio, Indiana, Iowa and Illinois where it is concentrated.
'BROAD-BASED IMMISERATION'
In a speech in Michigan in August, Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, drew attention to one of the great ironies of the current recovery: While the number of job openings has risen by about 20 percent over the past year, the U.S. unemployment rate has gone up, not down. "Workers want to find work," he said, "but can't find appropriate jobs."
The reason, Kocherlakota went on to explain, is that there is a fundamental mismatch between employer needs and worker skills. "It is hard to see how the Fed can do much to cure this problem," he said. "Monetary stimulus has provided conditions so that manufacturing plants want to hire new workers. But the Fed does not have a means to transform construction workers into manufacturing workers."
But even if the Fed could perform that magic, those manufacturers that are hiring again aren't creating anywhere near enough jobs to re-employ the more than 2 million workers they laid off during the downturn, never mind the 2 million construction workers who have lost their jobs.
Sherle Schwenninger, an economist at the New America Foundation, a progressive policy group in Washington, worries that the prolonged joblessness for blue-collar workers that mismatch implies will swell the country's permanent underclass, disconnecting millions more Americans from the mainstream and making them more prone to a litany of social ills.
"That should be quite disturbing to Americans," he said. "They lose their social capital, they lose their skills, they lose their confidence and -- as we've seen with regard to black males in certain locales -- you have a coarsening of the social fabric, a breakdown of community and increasing resort to criminal and anomalous behavior simply because people aren't part of a healthy economic and social community."
Even workers lucky enough to have kept their jobs -- or found new ones -- are feeling the effects of these blue-collar blues in the form of suppressed wage growth, economists say. As a result, Lawrence Mishel, the president of the Economic Policy Institute, a liberal research group in Washington, D.C., predicts the coming years will be marked by what he calls "broad-based immiseration."
"The story isn't who is being left behind," he said. "The story is everybody is being screwed."
'IT WAS ALL HERE'
Stevenson was born in 1971 and grew up in the suburb of Ferndale, where I-75 and I-696 freeways cross just north of Detroit, a community that was chock-a-block with tool-and-die shops, iron works, coil makers and other small manufacturers tied to the region's all-powerful auto industry.
"Up to 10 years ago, you could have had anything made within 45 minutes of the intersection of I-75 and I-696," Stevenson said. "It was all here. It was booming."
The buildings that housed them are still there along commercial streets with names like 9 Mile and John R, reminders of those good old days. But most now sit vacant with FOR LEASE and FOR SALE signs.
Stevenson's father worked as a pipefitter at Ford; his mother was a clerk at the local office of the automobile club. Nearly every household in the neighborhood was connected to the car business. "I'm so Detroit I bleed motor oil," Stevenson said.
He attended high school in neighboring Hazel Park, where he worked on the yearbook and hung out in the school's new media lab, shooting short video sketches inspired by the TV program "Saturday Night Live" with friends.
After high school, Stevenson went to a trade school hoping to become a broadcaster. But entry-level opportunities in a big media market like Detroit were few and he quickly fell into the trades. Since then, he's done it all, from digging ditches and running blueprints to welding heavy equipment and repairing hydraulic and pneumatic equipment.
"If I'd grown up in California, it probably would have been completely different because of Silicon Valley," he said. "If I'd grown up in Washington, I definitely would have been looking at Microsoft as opposed to Ford, GM or Chrysler. Location kind of dictated where you went."
But instead of experiencing a rising standard of living over time like his dad, who worked at a number of smaller manufacturers before getting into Ford, Stevenson has suffered setback after setback in his career.
Gone was the security and stability his father knew. "When the work was there," Mike Stevenson, 66, remembered, "you could say, 'I don't want to work for you anymore,' walk out the door and have a job down the street."
In its place was a more cut-throat environment -- "They had their boot on your neck and were yelling, 'Get it done, get it done, get it done. Now get out,'" Scott Stevenson said -- with no benefits, few breaks and frequent layoffs.
Still, he managed to buy his first new vehicle when he was 29 -- the 2000 Ford Ranger pickup truck he continues to drive today. Five years later, he bought a house about 40 miles away from Ferndale for $130,000. And in 2006, he had his best year ever, earning $38,000 a year at a plant that built material handlers for GM. But he accomplished that by clocking 15 to 20 hours of overtime almost every week, a schedule that left him little personal time.
"One of the reasons I'm not married is I've always been working," he said. "Or not working. You're either 60 hours a week or not at all."
But beginning in 2007, "it went straight downhill." First the overtime disappeared. Then the job vanished, too. Stevenson was able to cobble together some temporary work but when the real estate bubble popped and pulled the world into a financial crisis, even that dried up.
