When the Milwaukee-area employees of Harley-Davidson Inc. rejected a series of contract concessions sought by the company Monday, the common reaction among many business people I know was to say, "What were they thinking? Can't they see the way things are going?"
Indeed.
Allow me to shed some light on what was going through the minds of those Harley employees. The first thing to realize is that many of the United Steelworkers among Harley's Milwaukee workforce are graying around the temples. They have been employed at the company for years, and for them, retirement is not too far around the corner.
These vested Harley employees know that their company last week posted record quarterly revenue of $1.64 billion and net income of $312.7 million. They know that the company's brand is "American made." They do not fear losing their jobs anytime soon, or at least not before their retirements come along.
So, why would they voluntarily agree to pay thousands of dollars more each year for their health care benefits?
Ultimately, their decision to reject the company's proposal to create new jobs paying lower wages will force the motorcycle manufacturer to shift that work -- and those jobs -- out of Wisconsin.
That is unfortunate. Necessary, but unfortunate.
The truth is, these Harley workers know the way things are going. They know that the next generation of Harley workers will not be paid the living wages and enjoy the fringe benefits they have come to appreciate in a corporate/labor template that is dying, right along with the American organized labor movement.
These Harley workers are just hanging on to what they have for as long as they can. And who could blame them?
At the same time, no one can blame Harley for shifting its work to a region with cheaper labor costs. After all, why would the company pay someone $28 per hour to install a kickstand on a motorcycle in Wisconsin, when it could pay someone much less in a state down in Dixie?
So, that's where we stand.
It's a brave new world our children are inheriting. As American wages drop closer to those of Third World countries, one has to wonder if the American middle class will even exist in 20 years.
Some corporate leaders applaud when they see union jobs eliminated and wages slashed for American workers. Those leaders are missing the big picture. If Americans cannot afford to buy their goods and services, who will? Who will be their customers?
Now is the time for some bold new American political leadership and diplomacy. In this global economy, Third World countries are either going to rise up to be closer to our standard of living, or we are going to sink to their standards of living.
And the latter is not an acceptable option for our people or our businesses.
The news that Delphi Corp. intends to close its two Oak Creek plants and eliminate about 1,000 United Auto Workers jobs isn't exactly a wake-up call. After all, America has been hitting the snooze alarm for some time now.
We all know the up side to free markets and global trading: We get to buy $45 bicycles and the like at Wal-Mart.
However, this equation also has an ever-expanding dark side, and Oak Creek's predicament is a microcosm of that dark side. Gone will be hundreds of family-supporting jobs. Jobs that not only paid living wages, but provided health care benefits and vacations. In turn, those workers went out and spent their hard-earned money, buying vehicles, boats, televisions, computers and myriad other items. In effect, that money supported other jobs and businesses in the region.
What came around went around.
When I was growing up in Oak Creek, I knew dozens of friends whose parents worked at the Delphi plant. Those parents got up every morning and went to work. In return, they were able to make a living that enabled them to send their children to college or maybe buy a cottage up north.
They were living the middle class American dream. If they worked hard, they were rewarded for it, and they could even afford a comfortable retirement with a pension.
Today, that dream is eroding from the outside in.
Just beyond the gates of the Delphi plant, Oak Creek's Howell Avenue has become a generic, neon, retail strip mall. Most of the stores and restaurants pay wages that do not support families. Most do not provide health benefits to their employees.
Consider this: More than 40 percent of the enrollees in Badger Care, Wisconsin's health care benefits program for the working poor, are employees of Wal-Mart. Think about that for a moment. Small businesses are paying taxes to cover the health care costs of Wal-Mart employees.
Many businesspeople have been throwing up their hands in resignation and saying, "Well, what are you going to do? We're for free trading."
Former President Ronald Reagan was in favor of free trading, too. However, Reagan understood that "free" trading doesn't really happen without "fair" trading. He demanded that foreign markets stop undercutting the American dollar. Before other countries could have access to American markets, he demanded concessions in return. Such concessions resulted in Toyota building several automotive plants in the United States, where they hired American workers.
In his weekly radio address on Sept. 7, 1985, Reagan said, "I'm committed to and will continue to fight for fair trade. American exporters and American workers deserve a fair shake abroad, and we intend to see they get it."
The laissez-faire, weak-kneed resignation that the United States is powerless to demand trade concessions from other countries seeking access to our lucrative society started en masse during the Clinton administration and accelerated during the Bush administration. These policies have resulted in a record national trading deficit.
When people question these policies, they're accused of being protectionist or isolationist.
Poppycock. This is not an either/or equation. Let us hope we're done hitting the snooze button. The future of the American middle class is at stake. In the end, we are all in this together. After all, if the middle class dies, who is going to buy your company's goods or services?
Indeed.
Allow me to shed some light on what was going through the minds of those Harley employees. The first thing to realize is that many of the United Steelworkers among Harley's Milwaukee workforce are graying around the temples. They have been employed at the company for years, and for them, retirement is not too far around the corner.
These vested Harley employees know that their company last week posted record quarterly revenue of $1.64 billion and net income of $312.7 million. They know that the company's brand is "American made." They do not fear losing their jobs anytime soon, or at least not before their retirements come along.
So, why would they voluntarily agree to pay thousands of dollars more each year for their health care benefits?
Ultimately, their decision to reject the company's proposal to create new jobs paying lower wages will force the motorcycle manufacturer to shift that work -- and those jobs -- out of Wisconsin.
That is unfortunate. Necessary, but unfortunate.
The truth is, these Harley workers know the way things are going. They know that the next generation of Harley workers will not be paid the living wages and enjoy the fringe benefits they have come to appreciate in a corporate/labor template that is dying, right along with the American organized labor movement.
These Harley workers are just hanging on to what they have for as long as they can. And who could blame them?
At the same time, no one can blame Harley for shifting its work to a region with cheaper labor costs. After all, why would the company pay someone $28 per hour to install a kickstand on a motorcycle in Wisconsin, when it could pay someone much less in a state down in Dixie?
So, that's where we stand.
It's a brave new world our children are inheriting. As American wages drop closer to those of Third World countries, one has to wonder if the American middle class will even exist in 20 years.
Some corporate leaders applaud when they see union jobs eliminated and wages slashed for American workers. Those leaders are missing the big picture. If Americans cannot afford to buy their goods and services, who will? Who will be their customers?
Now is the time for some bold new American political leadership and diplomacy. In this global economy, Third World countries are either going to rise up to be closer to our standard of living, or we are going to sink to their standards of living.
And the latter is not an acceptable option for our people or our businesses.
The news that Delphi Corp. intends to close its two Oak Creek plants and eliminate about 1,000 United Auto Workers jobs isn't exactly a wake-up call. After all, America has been hitting the snooze alarm for some time now.
We all know the up side to free markets and global trading: We get to buy $45 bicycles and the like at Wal-Mart.
However, this equation also has an ever-expanding dark side, and Oak Creek's predicament is a microcosm of that dark side. Gone will be hundreds of family-supporting jobs. Jobs that not only paid living wages, but provided health care benefits and vacations. In turn, those workers went out and spent their hard-earned money, buying vehicles, boats, televisions, computers and myriad other items. In effect, that money supported other jobs and businesses in the region.
What came around went around.
When I was growing up in Oak Creek, I knew dozens of friends whose parents worked at the Delphi plant. Those parents got up every morning and went to work. In return, they were able to make a living that enabled them to send their children to college or maybe buy a cottage up north.
They were living the middle class American dream. If they worked hard, they were rewarded for it, and they could even afford a comfortable retirement with a pension.
Today, that dream is eroding from the outside in.
Just beyond the gates of the Delphi plant, Oak Creek's Howell Avenue has become a generic, neon, retail strip mall. Most of the stores and restaurants pay wages that do not support families. Most do not provide health benefits to their employees.
Consider this: More than 40 percent of the enrollees in Badger Care, Wisconsin's health care benefits program for the working poor, are employees of Wal-Mart. Think about that for a moment. Small businesses are paying taxes to cover the health care costs of Wal-Mart employees.
Many businesspeople have been throwing up their hands in resignation and saying, "Well, what are you going to do? We're for free trading."
Former President Ronald Reagan was in favor of free trading, too. However, Reagan understood that "free" trading doesn't really happen without "fair" trading. He demanded that foreign markets stop undercutting the American dollar. Before other countries could have access to American markets, he demanded concessions in return. Such concessions resulted in Toyota building several automotive plants in the United States, where they hired American workers.
In his weekly radio address on Sept. 7, 1985, Reagan said, "I'm committed to and will continue to fight for fair trade. American exporters and American workers deserve a fair shake abroad, and we intend to see they get it."
The laissez-faire, weak-kneed resignation that the United States is powerless to demand trade concessions from other countries seeking access to our lucrative society started en masse during the Clinton administration and accelerated during the Bush administration. These policies have resulted in a record national trading deficit.
When people question these policies, they're accused of being protectionist or isolationist.
Poppycock. This is not an either/or equation. Let us hope we're done hitting the snooze button. The future of the American middle class is at stake. In the end, we are all in this together. After all, if the middle class dies, who is going to buy your company's goods or services?
Steve Jagler is executive editor of BizTimes in Milwaukee and is past president of the Milwaukee Press Club. BizTimes provides news and operational insight for the owners and managers of privately held companies throughout southeastern Wisconsin.
Steve has won several journalism awards as a reporter, a columnist and an editor. He is a graduate of the University of Wisconsin-Milwaukee.
When he is not pursuing the news, Steve enjoys spending time with his wife, Kristi, and their two sons, Justin and James. Steve can be reached at steve.jagler@biztimes.com.
