Barbara Ehrenreich writes that far removed from Wall Street, most Americans have been living in their own personal recession for years.
Read the entire Washington Post op ed.
Thursday, February 7, 2008
Wednesday, February 6, 2008
Johnson Controls' embrace of green markets: an alternative to low wage production!
Johnson Controls’ new contract to make lithium-ion batteries for hybrid cars demonstrates that manufacturing companies can successfully compete at the high end of the global economy by embracing green markets, high performance technologies, advanced manufacturing, quality and service.
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high volume. low cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
As David Haynes, Milwaukee Journal Sentinel deputy editorial page editor, wrote: "Johnson Controls' new contract …is another example of how a Milwaukee company with cutting-edge technology is competing globally with a portfolio of new ideas. Johnson Controls will make up to 5,000 battery packs a year for us in Mercedes-Benz S-class luxury hybrids, the Journal Sentinel's Thomas Content reports. It also proves again how much green there is in 'clean and green' technologies."
Johnson Controls' expansion into green markets contrasts with Briggs and Stratton's response to California's effort to increase clean air standards in 2006.
Rather than embrace enhanced regulations designed to tighten emission requirements for small engines, cutting 22 tons of smog-forming chemicals from the California air daily, or the equivalent of more than 800,000 cars a day, Briggs' management fought them.
Briggs, which dominants the small engine market, joined forces with a powerful Republican Senator, Christopher S. Bond, from Missouri where it has two plants employing almost over 1,750 employees. Together they opposed the measure that would have required small engines to have catalytic converters which pull smog-forming chemicals and carbon monoxide out of the exhaust.
Briggs argued that the converters could add a dangerous amount of heat to already hot engines, creating a fire hazard. It was an argument similar to one U.S. automakers made before the government required the devices three decades ago. But four small-engine makers said that their engineers have figured out how to meet the pollution standards safely, with or without the devices.
Briggs' failure to grasp the economic potential of California's clean air initiative was a byproduct of the firm's inflexible commitment to a high volume. low cost production strategy which led the firm to demand major concessions from its Milwaukee employees and eventually move almost 10,000 family supporting jobs from Southeastern Wisconsin over the past two decades.
The New York Times wrote: "Senator Bond and Briggs & Stratton are making an enormous mistake. Their resistance to California's new standards — and to the adoption of catalytic converters — makes them look troglodytic. What's worse is that they're missing an enormous opportunity. Americans do love their lawns. But at the moment, we're trapped in something of a paradox: to keep the grass trimmed we depend on heavily polluting engines. The manufacturer that offers an environmentally sound mower will almost certainly find a nation of willing buyers."
Unlike Briggs, Johnson Controls has recognized that emerging green markets have significant growth potential.
And instead of sourcing the production of hybrid batteries to low-wage China, this joint venture will sell them there- to the Chinese automaker Chery in China.
Unfortunately, the batteries won't be produced in Milwaukee. They will be produced in a new $22.2 million Johnson Controls-Saft factory in Nersac, France. French manufacturing compensation costs are $4 more an hour ($33.73) than in the US ($29.60), demonstrating that firms can pay family supporting wages and compete in the global economy.
Taxes are also significantly steeper, additional evidence that business location decisions are not determined by tax rates.
Johnson Controls' joint venture demonstrates that firms can sucessfully compete through high road strategies based on innovation, advanced technologies, quality, and service -that there is an alternative to reducing wages and benefits and outsourcing jobs and production!
Monday, February 4, 2008
BIG OIL COMPANIES ANNOUNCE RECORD PROFITS
Last week, Royal Dutch Shell announced that profits for the company soared to $26.7 billion in 2007, a record-breaking figure for a European company.
The next day, The New York Times reported that "Exxon Mobil's performance last year was a blowout." The oil giant revealed last Friday "that it beat its own record for the highest profits ever recorded by any company, with net income rising 3 percent to $40.6 billion." Exxon Mobil's sales exceeded the gross domestic product of 120 countries.
From the beginning of President Bush's tenure in office, the combined profits of the big five oil companies have skyrocketed from just under $40 billion in 2001 to $120 billion in 2007. President Bush has devoted his presidency to protecting and subsidizing oil company profits.
In December, 2007 he killed tax incentives for wind and solar power, alternative fuels, energy efficiency, clean coal, and cleaner cars in a successful effort to preserve more than $1 billion in annual big oil tax loopholes. These subsidies remain in place in the President's latest budget.
The worldwide increase in demand for crude oil from developing economies like China and India and from mature ones like the United States is one of the reasons crude oil prices and oil company profits have soared.
But as Nobel laureate Joseph Stiglitz recently noted in Vanity Fair, "The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it."
The next day, The New York Times reported that "Exxon Mobil's performance last year was a blowout." The oil giant revealed last Friday "that it beat its own record for the highest profits ever recorded by any company, with net income rising 3 percent to $40.6 billion." Exxon Mobil's sales exceeded the gross domestic product of 120 countries.
From the beginning of President Bush's tenure in office, the combined profits of the big five oil companies have skyrocketed from just under $40 billion in 2001 to $120 billion in 2007. President Bush has devoted his presidency to protecting and subsidizing oil company profits.
In December, 2007 he killed tax incentives for wind and solar power, alternative fuels, energy efficiency, clean coal, and cleaner cars in a successful effort to preserve more than $1 billion in annual big oil tax loopholes. These subsidies remain in place in the President's latest budget.
The worldwide increase in demand for crude oil from developing economies like China and India and from mature ones like the United States is one of the reasons crude oil prices and oil company profits have soared.
But as Nobel laureate Joseph Stiglitz recently noted in Vanity Fair, "The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it."
Sunday, February 3, 2008
MJS calls for extending unemployment benefits!
On Saturday, the Milwaukee Journal Sentinel’s editors wrote that the $146 billion fiscal stimulus passed by the House of Representatives should be amended to “expand aid for food stamps, heating assistance or unemployment compensation…”
They are right that these increases should be included in any stimulus package designed to jump start the failing economy and assist those most in need.
But the paper’s Business section article on the unemployment report completely undermined the editorial’s policy proposal by suggesting people are losing their jobs because they lack “versatility,” “perseverance, and a commitment to “hard work.”
Strangely entitled “jobs for the diligent” the article explains the devastating impact of unemployment by focusing on someone who quit his job to pursue an entrepreneurial dream more than a year ago-before unemployment began to rise. His situation is very different than the millions nationally who are losing their jobs because the economy has slowed. The former voluntarily terminated his employment, is ineligible for unemployment benefits even if they are extended, and is currently working. The later are involuntarily unemployed.
During cyclical downturns firms reduce production and cut their operational costs. One of the easiest and quickest to way to accomplish cost reductions is to furlough labor. Hence, the increase in unemployment.
The article liberally quotes a retired healthcare executive who says: “…businesses are suffering too...”and they need “’versatile employees who can stick around and contribute to profitability….”
The problem is you can’t stick around and contribute to profitability when you’re given a pink slip.
Workers are getting laid off because the housing bubble burst, credit’s tight, consumption’s down and the economy is contracting, not because they lack versatility or a work ethic!
Last month the nation lost jobs for the first time in five years- 17,000 in total. The month before the unemployment rate rose significantly. Over the past three months only 42,000 jobs were created per month, far less than the 150,000 needed to absorb new labor market entrants.
The number of people who have been unemployed for more than six months is now 1.38 million. Long term unemployment has not been this high since the 2001 recession when Congress last extended unemployment benefits.
Most economists recognize that the official unemployment rate significantly undercounts the number of unemployed by failing to recognize those who have dropped out of the labor market, discouraged workers, and the involuntary part-time.
Milwaukee with the fourth highest unemployment rate in the nation has a serious and growing unemployment problem.
Hard working, diligent people are losing their jobs through no fault of their own. The ranks of the long term unemployed are growing. The MJS editorial board is right-Congress needs to add extended unemployment benefits to its stimulus package.
They are right that these increases should be included in any stimulus package designed to jump start the failing economy and assist those most in need.
But the paper’s Business section article on the unemployment report completely undermined the editorial’s policy proposal by suggesting people are losing their jobs because they lack “versatility,” “perseverance, and a commitment to “hard work.”
Strangely entitled “jobs for the diligent” the article explains the devastating impact of unemployment by focusing on someone who quit his job to pursue an entrepreneurial dream more than a year ago-before unemployment began to rise. His situation is very different than the millions nationally who are losing their jobs because the economy has slowed. The former voluntarily terminated his employment, is ineligible for unemployment benefits even if they are extended, and is currently working. The later are involuntarily unemployed.
During cyclical downturns firms reduce production and cut their operational costs. One of the easiest and quickest to way to accomplish cost reductions is to furlough labor. Hence, the increase in unemployment.
The article liberally quotes a retired healthcare executive who says: “…businesses are suffering too...”and they need “’versatile employees who can stick around and contribute to profitability….”
The problem is you can’t stick around and contribute to profitability when you’re given a pink slip.
Workers are getting laid off because the housing bubble burst, credit’s tight, consumption’s down and the economy is contracting, not because they lack versatility or a work ethic!
Last month the nation lost jobs for the first time in five years- 17,000 in total. The month before the unemployment rate rose significantly. Over the past three months only 42,000 jobs were created per month, far less than the 150,000 needed to absorb new labor market entrants.
The number of people who have been unemployed for more than six months is now 1.38 million. Long term unemployment has not been this high since the 2001 recession when Congress last extended unemployment benefits.
Most economists recognize that the official unemployment rate significantly undercounts the number of unemployed by failing to recognize those who have dropped out of the labor market, discouraged workers, and the involuntary part-time.
Milwaukee with the fourth highest unemployment rate in the nation has a serious and growing unemployment problem.
Hard working, diligent people are losing their jobs through no fault of their own. The ranks of the long term unemployed are growing. The MJS editorial board is right-Congress needs to add extended unemployment benefits to its stimulus package.
Super Bowl XLII: woodstock for the rich and shameless
It's Super Bowl Sunday.
Thirty second advertising spots cost more than $2.7 milion.
That's not close to the $10 billion we spend in Iraq every month. But it would sure help struggling urban school districts like MPS and the Racine Unified buy books, restore classes in art, music and gym that keep kids interested in school, and reduce unacceptably high pupil teacher ratios. Or it would help Wisconsin's Universities and tech colleges keep tuition, which has been rising like gas prices, affordable.
My favorite sports writer and friend, Dave Zirin writes:
Before it is anything else, before it’s even a football game, the Super Bowl is first and foremost a two week entertainment festival for the rich and shameless: a corporate Woodstock with suits and sports cars subbing for ponchos and patchouli. Less free love and drugs, more hookers and scotch.
One headline preceding the big game read "Phoenix Faces Super Bowl Parking Woe: Where to Put Gulfstreams?" As the article stated, "The Arizona host committee expects 800 to 1,000 private jets, or more, to use the airports before Sunday's game. That will be at least double the number when nearby Tempe was the site of the Super Bowl in 1996.”
Giants co-owner Steve Tisch spoke about the pugilistic plutocrats at the airport. “’When that game's over and a lot of people who've flown on private planes want to go home and everybody feels that they're entitled to be the first to take off, that's when it gets interesting. A lot of people are saying to their pilots to tell the tower, “Do you know who I've got on my plane?'''
What a terrifically charming slice of life. Is now an appropriate time to tell Mr. Tisch that 21.2% of children in Arizona live below the poverty line? Or 40% of Native Americans? Can he hear me over the jets?
The thought of corporate execs swinging their egos to get their planes out of an airport hangar is a perfect snapshot for the excess that’s smothered the game. The Super Bowl has become a place to see and be seen. Q ratings matter more than quarterbacks. And spectacle has triumphed over sport.
Thirty second advertising spots cost more than $2.7 milion.
That's not close to the $10 billion we spend in Iraq every month. But it would sure help struggling urban school districts like MPS and the Racine Unified buy books, restore classes in art, music and gym that keep kids interested in school, and reduce unacceptably high pupil teacher ratios. Or it would help Wisconsin's Universities and tech colleges keep tuition, which has been rising like gas prices, affordable.
My favorite sports writer and friend, Dave Zirin writes:
Before it is anything else, before it’s even a football game, the Super Bowl is first and foremost a two week entertainment festival for the rich and shameless: a corporate Woodstock with suits and sports cars subbing for ponchos and patchouli. Less free love and drugs, more hookers and scotch.
One headline preceding the big game read "Phoenix Faces Super Bowl Parking Woe: Where to Put Gulfstreams?" As the article stated, "The Arizona host committee expects 800 to 1,000 private jets, or more, to use the airports before Sunday's game. That will be at least double the number when nearby Tempe was the site of the Super Bowl in 1996.”
Giants co-owner Steve Tisch spoke about the pugilistic plutocrats at the airport. “’When that game's over and a lot of people who've flown on private planes want to go home and everybody feels that they're entitled to be the first to take off, that's when it gets interesting. A lot of people are saying to their pilots to tell the tower, “Do you know who I've got on my plane?'''
What a terrifically charming slice of life. Is now an appropriate time to tell Mr. Tisch that 21.2% of children in Arizona live below the poverty line? Or 40% of Native Americans? Can he hear me over the jets?
The thought of corporate execs swinging their egos to get their planes out of an airport hangar is a perfect snapshot for the excess that’s smothered the game. The Super Bowl has become a place to see and be seen. Q ratings matter more than quarterbacks. And spectacle has triumphed over sport.
Saturday, February 2, 2008
McCain defends and misrepresents NAFTA
Corporations, mainstream economists, and politicians, including the leading candidate for the Republican presidential nomination, Senator John McCain, repeatedly claimed in the early 1990s that the North American Free Trade Agreement (NAFTA) would improve the U.S. trade balance with Mexico and Canada, resulting in a net gain of almost 200,000 jobs in the United States.
The reality is that the U.S.-NAFTA trade deficit has soared over the past dozen years, displacing a total of 1 million jobs nationwide, with losses in every state (see Revisiting NAFTA).
Wisconsin lost more than 25,403 jobs because of NAFTA. One third of those who lost their jobs were not reemployed. For those who were, the wages were 11% to 13% less than they had earned before being displaced.
Simply put, NAFTA has failed to achieve the benchmarks for success established by its proponents. Yet presidential aspirant, Senator McCain, continues to defend NAFTA and misrepresent its impact.
The reality is that the U.S.-NAFTA trade deficit has soared over the past dozen years, displacing a total of 1 million jobs nationwide, with losses in every state (see Revisiting NAFTA).
Wisconsin lost more than 25,403 jobs because of NAFTA. One third of those who lost their jobs were not reemployed. For those who were, the wages were 11% to 13% less than they had earned before being displaced.
Simply put, NAFTA has failed to achieve the benchmarks for success established by its proponents. Yet presidential aspirant, Senator McCain, continues to defend NAFTA and misrepresent its impact.
Friday, February 1, 2008
Latest job report indicates need to extend unemployment benefits
The number of jobs in the nation fell last month for the first time in almost five years according to the Labor Department's latest employment report.
17,000 jobs were lost, led by losses in construction, manufacturing, good producing industries and state government.
Today’s report is the clearest signal yet that the economy has entered a recession and that Congress needs to include a temporary extension of unemployment insurance benefits in its fiscal stimulus package.
Averaging over the past three months, payrolls grew by a scant 42,000 jobs per month, compared to 169,000 a month over the comparable period one year ago.
The Labor Department also sharply lowered its estimates for employment in 2007 as a whole.
In November, for example, the government had said 115,000 jobs were created. That number was reduced to 60,000 in the latest report, far short of the 150,000 jobs that are required to absorb new workers entering the workforce.
Long-term unemployment—the share of workers jobless for at least half-a-year—jumped to 18.3%, compared to 16.2% one year ago. At the start of the last recession in March 2001, in contrast, the long-term unemployed made up only 11.1 percent of all unemployed workers.
The number of long-term unemployed is higher today (1.38 million) than it was in March 2002 (1.33 million), when Congress first enacted extended unemployment compensation after the 2001 recession. Unemployment benefits are cut off after 26 weeks in most states.
Another important indicator of slack in the job market was the increase in the share of involuntary part-time workers, a change that is also evident in the increase in the under-employment rate, the BLS's most comprehensive measure of under-utilization. At 9.0% last month, the underemployment rate was at its highest level in over two years and significantly above its year-ago level of 8.3%.
Workers’ salaries have also fallen in the last 12 months. The average hourly wage for rank-and-file workers — about 80 percent of the total work force — rose 3.7 percent since last January, below the pace of inflation.
These developments are a source of concern not only for these families but for the economy as a whole. They are a clear sign that extending unemployment benefits must be part of any fiscal stimulus package.
A temporary extension of unemployment insurance benefits would help the people hardest hit by the weakening economy and would boost the economy with one of the fastest acting and most effective forms of stimulus available. Unlike tax rebates, which can’t begin to go out until mid-May, extended unemployment benefits could start reaching workers and boosting consumption within 30 days.
The Senate has included extending unemployment benefits in its stimulus package. It is important for American workers and the economy that it be included in the final stimulus legislation.
17,000 jobs were lost, led by losses in construction, manufacturing, good producing industries and state government.
Today’s report is the clearest signal yet that the economy has entered a recession and that Congress needs to include a temporary extension of unemployment insurance benefits in its fiscal stimulus package.
Averaging over the past three months, payrolls grew by a scant 42,000 jobs per month, compared to 169,000 a month over the comparable period one year ago.
The Labor Department also sharply lowered its estimates for employment in 2007 as a whole.
In November, for example, the government had said 115,000 jobs were created. That number was reduced to 60,000 in the latest report, far short of the 150,000 jobs that are required to absorb new workers entering the workforce.
Long-term unemployment—the share of workers jobless for at least half-a-year—jumped to 18.3%, compared to 16.2% one year ago. At the start of the last recession in March 2001, in contrast, the long-term unemployed made up only 11.1 percent of all unemployed workers.
The number of long-term unemployed is higher today (1.38 million) than it was in March 2002 (1.33 million), when Congress first enacted extended unemployment compensation after the 2001 recession. Unemployment benefits are cut off after 26 weeks in most states.
Another important indicator of slack in the job market was the increase in the share of involuntary part-time workers, a change that is also evident in the increase in the under-employment rate, the BLS's most comprehensive measure of under-utilization. At 9.0% last month, the underemployment rate was at its highest level in over two years and significantly above its year-ago level of 8.3%.
Workers’ salaries have also fallen in the last 12 months. The average hourly wage for rank-and-file workers — about 80 percent of the total work force — rose 3.7 percent since last January, below the pace of inflation.
These developments are a source of concern not only for these families but for the economy as a whole. They are a clear sign that extending unemployment benefits must be part of any fiscal stimulus package.
A temporary extension of unemployment insurance benefits would help the people hardest hit by the weakening economy and would boost the economy with one of the fastest acting and most effective forms of stimulus available. Unlike tax rebates, which can’t begin to go out until mid-May, extended unemployment benefits could start reaching workers and boosting consumption within 30 days.
The Senate has included extending unemployment benefits in its stimulus package. It is important for American workers and the economy that it be included in the final stimulus legislation.
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