The economy: Things fall apart

They closed the Electrolux refrigerator plant in Greenville last week. That's a little town not far from Grand Rapids. Another plant closed there last year, and Tower Automotive just announced it was shutting down its factory there. And, oh, yes, the Federal Mogul factory is shaky too.

Take a good look at the future, coming to businesses in your town soon. For Greenville, this has meant a total loss of something more than 3,000 jobs in a town of something fewer than 8,000 people. In other words, an economic holocaust. I talked to a young reporter for the local paper last week. Like the mayor and city manager, he seemed to lack a grip on reality.

Well, he said, people in town aren't too worried. After all, they're expanding the hospital, and building a big new residential housing development. And he added that they're talking about giving new businesses a break on any taxes, and a lower rate on their water bills.

Hello, I wanted to yell at him. No, you usually don't drop dead the day the doctor tells you're terminally ill. The situation is going to get worse before it gets better. The closings are bound to have ripple effects.

More small businesses are sure to follow. And as for attracting new businesses — Electrolux sneered at a $119 million package the state put together to try to keep the plant in Greenville. Does anyone really think that a water bill discount is going to attract, say, a new Mercedes plant?

Do the local folks realize that the hospital was being expanded to service people who soon will have no health insurance? And who will buy the gleaming new houses now under construction?

That same day I read a story by the Associated Press' Lansing bureau chief, Kathy Barks Hoffman. She had interviewed a middle-aged woman in the Electrolux plant who made $16 an hour inspecting refrigerators. The worker blandly said she was hoping someone else would build another factory there and give her a similar job.

I wondered whether that lady realizes her chances of hitting the Powerball lottery are somewhat greater. The days of manufacturing and relative prosperity in Greenville are over, in any future that I can see.

Here's why. Here's what's happening, in Greenville, as throughout the manufacturing Midwest. Most of the Electrolux jobs are being sent to Mexico, where the company will be paying its workers $7 a day. Not an hour — a day. Oh, yes, they'll also give them bus fare and lunch.

That's what's going on, all over this country, all over the world. Bizarrely, globalization may be the thing that finally validates the predictions of classic Marxism-Leninism. Capitalism as we know it was saved roughly a century ago, starting when Henry Ford decided to pay his workers enough so they could afford to buy his products.

That's a gross oversimplification of labor history, but that's essentially what happened. Later, capitalism was again saved and further strengthened when Franklin D. Roosevelt sold the nation on a social safety net. We thought of ourselves as Americans then.

Today, too many of us, especially those running large corporations, pledge allegiance to the spirit of "I'm getting mine, and to hell with you." Of course, Electrolux doesn't hope to sell many expensive refrigerators to its $35-a-week Mexican employees.

You know they intend to ship them back here — and try to sell them to some other comparatively well-paid American workers whose bosses haven't done them in yet. However, there are steadily fewer of these.

Vladimir Lenin thought capitalists turned to imperialism because they needed more and more markets to sell their products. Instead, these days they go abroad for cheap labor.

You don't have to be an accountant to see that something eventually has to give, and if present trends continue, someday the whole house of cards is going to come smashing down. Enron on a world scale, you might say. The question is, what do we do about it?

For years, we've been taught to believe in the mantra of "free trade" as the economic force that would eventually make this truly one world. But how can you really have "free trade" without something that resembles "fair trade"? How can a business that has to pay people $20 an hour compete with one that pays $1 an hour, and also manages to avoid all sorts of domestic taxes by moving across the border?

For years, we've been taught that "protectionism" doesn't work. Well, what would? We know that plenty of employers, and the vast majority of the Republican Party, think the way to compete is by lowering taxes, wages, benefits and the standard of living for workers here.

Ebenezer Scrooge thought just the same way. Years ago, socialists thought the way to solve this problem was to fight internationally, to convince all workers everywhere that they had common interests.

That ended when World War I was declared and members of various European socialist parties happily and immediately supported the war, forgot all the international brotherhood they'd been preaching and went about vigorously killing their fellow workers and socialists.

That drove the few who rejected the war to a cynical bitterness. Their leaders then dropped the idea of workers' democracy, and instead supported a centrally controlled "dictatorship of the proletariat."

That's what we ended up calling communism. Today, we mostly think left-wing extremism is as hopelessly out-of-date as plumed hats.

But what happens when all the jobs have gone to Mexico or China or call centers in India? How will the good people of Greenville feel a year from now, those who haven't moved to North Carolina? What happens here if Delphi succeeds in cutting its workers' pay by close to half, or goes out of business?

We are, failing some new economic revolution we can't foresee, on the edge of a spreading economic catastrophe. We can largely ignore it for a little while, those of us who can still afford the cable bill.

But that bell is tolling steadily louder. We need to come up with answers, and I see no one — other than those who couldn't care less about average people's standard of living — who is offering more than slogans.

"The best lack all conviction and the worst are filled with passionate intensity," William Butler Yeats wrote in 1921. That line probably gets quoted too much. But looking at Michigan, it seems very appropriate now.

Minimum Wage: Ever since our Legislature stopped doing its job, people have turned to a statewide vote as the only way to get anything significant passed. Currently, there's a drive to put an amendment on the November ballot to raise the minimum wage from $5.15 to $6.85 an hour. (It would not apply to students, prisoners and restaurant servers.)

There are actually corporate greedheads who oppose this, and who will spend a lot of money to try to stop raising the poorest workers' pay.

Consider this: If you worked a whole year at the proposed new higher minimum wage, you'd make $14,248. How well do you suppose you could live on that? Anyone against this proposal thinks full-time workers in America deserve less money than that. There are names for such people, and you can select the one you like best.

Jack Lessenberry opines weekly for Metro Times. Send comments to [email protected]
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