From the New York Times via O'hanian, once again, comes this depressing editorial from Paul Krugman. When that plight of the working man gets worse what do you suppose that means for education?
In 1999 Delphi, the parts division of General Motors, was spun off as an independent company. Now Delphi has filed for bankruptcy. Its chief executive, Robert S. Miller, wants the company's workers to accept drastic wage cuts, from an average hourly wage rate of about $27 to as little as $10 an hour.
There are a lot of questions about how Delphi and the auto industry in general reached this point. Why were large severance packages given to Delphi executives even as the company demanded wage cuts? Why, when General Motors was profitable, did it pay big dividends but fail to put in enough money to secure its workers' pensions?
But Delphi's bankruptcy is a much bigger deal than your ordinary case of corporate failure and bad, self-dealing management. If Delphi slashes wages and defaults on its pension obligations, the rest of the auto industry may well be tempted - or forced - to do the same. And that will mark the end of the era in which ordinary working Americans could be part of the middle class...
...What if neither education nor health care reform is enough to end the wage squeeze? That's the possibility that makes free-trade liberals like me very nervous, because at that point protectionism enters the picture. When corporate executives say that they have to cut wages to meet foreign competition, workers have every right to ask why we don't cut the foreign competition instead.
I hope we don't have to go there. But denial is not an option. America's working middle class has been eroding for a generation, and it may be about to wash away completely. Something must be done.
Let's start by changing those that represent us in Wasington!