Bob Poropatich, who was laid off in June, 2008, from his $85,000-a-year job designing store displays for American Eagle Outfitters, can testify to how losing a good job forces cutbacks in personal spending.
“I haven’t been anywhere on vacation since ’08,” says the 60-year-old Pittsburgh resident, who now works 32 hours a week earning $11 an hour stocking shelves at grocery stores. “I haven’t done anything. Haven’t seen a movie. Haven’t bought gifts.”
He will have trouble getting to his part-time job if anything happens to his six-year-old Subaru Forester.
“I pray that if I take it in for an oil change they don’t find $2,000 of repairs on it,” he says.
The Detroit auto makers helped create middle-class America back in the day when they were called the Big Three and there were no Subarus on U.S. roads – or Hondas, Hyundais or Toyotas for that matter.
The $5-a-day wage that Henry Ford began paying his workers in 1914 was generous at the time and was aimed in part at giving them enough money to buy the Model Ts they were bolting together. By the middle of the 20th Century, workers at Chrysler Corp., Ford Motor Co. and General Motors Corp. earned higher wages and better benefits than any other factory workers.
The work was – and still is – exhausting and mind-numbing, but the money allowed workers to flock to suburbia, buy new cars, cottages and boats and pay university tuition for their children.
What was good for General Motors was good for the country, and people in the heart of the auto industry in Michigan were better off than much of the rest of the country.
But the upheaval in the sector has changed all that.
In 1979, when the first energy crisis began three decades of wrenching restructuring for Detroit that led to hundreds of thousands of job cuts, middle-class incomes in Michigan were 13 per cent higher than those of Americans as a whole, according to the Economic Policy Institute, a labour-financed think tank based in Washington.
By 2010 and the end of the crisis that sent GM and Chrysler LLC into Chapter 11 bankruptcy protection, middle-class incomes in the Great Lake State were 6 per cent below those in the rest of the country.
More than 75 per cent of workers in Michigan were covered by an employer-provided health care plan in 1979, compared with 70 per cent of all Americans. By 2010, employers provided such coverage for 54.8 per cent of Michigan workers, just slightly higher than the 54 per cent of all Americans who were covered.
Shifting health care costs represents another cut in disposable income for middle-class Americans.
For auto workers in the higher-tier wage group making $28 an hour, toiling in a car factory still finances a pretty good lifestyle, although annual wage increases have disappeared – replaced by the much more volatile profit sharing – and even tier-one workers now bear much more of the cost of their health care.
It’s worse for Mr. Crawford and thousands of others hired on since the Detroit Three started the two-tier wage system in 2007.
“The whole idea of the traditional going up north and having a cabin and having a boat and a couple of new cars every year or two and a nice house is not accessible,” he says over dinner at an Olive Garden restaurant, a 10-minute drive from the GM plant.
His job title is production support member, which means he needs to be able to do all the jobs in the trim department. He installs most of the interior components of a car and fills in for people making $28 an hour or his $18-an-hour colleagues.
The tier-one co-workers who share his car pool live in the suburbs of Flint. Mr. Crawford and Mr. Duehring live in a sketchier neighbourhood of that city, which gained fame as the setting for Roger and Me, filmmaker Michael Moore’s satire of GM, but is also where David Buick started the GM division that still bears his name.
Mr. Crawford would like to move. He put an offer in on a house in Waterford, Mich., about 30 minutes closer to work.
“It was on a quarter acre, fenced-in yard, single-car garage, three bedrooms, two full baths, partially finished basement. It was nice – a step up.” The $86,000 asking price, however, was higher than the $78,000 maximum he thought he could afford.
So for now, he’s still in the car pool.
When one of the tier-one employees takes the wheel, the four men pile into a newer-model Buick Lucerne or a GMC Acadia, more comfortable and modern rides than Mr. Crawford’s 13-year-old Buick Century or the 14-year-old Jeep of Mr. Duehring.