The Oracle of Delphi...
When he ruminates on the dialectics of global capitalism, Miller calls to mind a famous, simplistic big thinker with prominent facial hair. No, not Tom Friedman - Karl Marx. Because what Miller is talking about - and the effort he’s been engaged in at companies in the steel and auto industries - is the re-proletarianization of industrial work.
Transforming masses of unskilled, insecure industrial workers into middle-class stakeholders was a key achievement of the U.S. economy in the 20th century. Henry Ford introduced the $5 day in 1914 as part of a larger effort to make his hourly workers - many of them immigrants and minorities - think and behave more like respectable middle-class Protestants. In the following decade, the spreading belief that better-cared-for workers would prove less susceptible to unionism, socialism and communism led to the advent of welfare capitalism. Through the New Deal and the Cold War, the grand bargain between government, industry and labor held fast. With pensions and paid vacations, factory work became a ticket to the middle class, providing home ownership and comfort, job and retirement security, health care and leisure.
In recent decades, however, this grand bargain has collapsed slowly - and in the case of Delphi, all at once. There’s plenty of blame to go around: clueless managers, atavistic unions and indifferent politicians. Broadly speaking, the United States has collectively decided that certain industries, like electronics, are not worth keeping. Other industries, like meatpacking and chicken processing, are worth keeping, but only if they’re staffed by a new proletariat - immigrants who labor for low hourly wages and without benefits or union representation. And now we’re being told that other industries like steel, coal, textiles and auto parts can survive only to the extent that middle-class stakeholders choose to become insecure industrial workers.
To be sure, Miller is right that broad forces like globalization, free trade, and the emergence of China as an economic power are making life difficult for U.S. manufacturers. But many of the wounds are self-inflicted. And our system has some perverse incentives that encourage smart executives like Miller to restructure at the expense of workers.
The beauty of Chapter 11 is that it allows companies to walk away from so many obligations to lenders and employees. If the UAW doesn’t come across, Miller can ask the court to impose salary changes. Or he can toy with the notion of kicking the underfunded pension onto the increasingly feeble shoulders of the Pension Benefit Guaranty Corp., which Miller did at Bethlehem Steel in 2002. Delphi says it may be able to save the pension plan, but only if workers accept a two-thirds pay cut - wages and benefits of $20 per hour.
Now, $160 per day in wages and benefits isn’t bad. That comes to about $41,600 per year. But is it enough to sustain a bourgeois lifestyle? Henry Ford instituted the $5 day because he wanted his employees to buy his cars. Back out $10,000 for benefits and insurance, and Delphi’s employees may make enough to buy a 2006 Buick Terraza. But they won’t have anything left over.
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