Down the Up Escalator

by Barbara Garson

  “What Am I Looking at Here in Evansville?”

  Our $39 room at the Aztar overlooked the Ohio River. Each morning we’d seen at least one dog walker, but never more than two, on the new downtown promenade. We’d also seen three cyclists using the bike path. With our business just about wrapped up, we decided to check out the redevelopment area.

  We strolled the three blocks of Evansville’s newly gentrified Main Street, wondering which empty gourmet coffee shop to patronize. We saw a young woman go into one of them, and Frank caught a glimpse of a union logo on her T-shirt. So we followed and asked her where we could learn a little about the town’s labor history. She directed us to Charles A. Whobrey, president and business manager of Teamster Local 215. A walk farther down Main through the old, somewhat more peopled downtown brought us to the Teamsters headquarters building on Walnut Street.

  “What am I looking at here in Evansville?” I asked the lean fifty-year-old as he led us into his cubbyhole of an office. “How could a town have gotten this depressed since Lehman Brothers collapsed?”

  “You’re not looking at the effects of just this recession,” he asserted. “So many people here survive paycheck to paycheck, obviously living beyond their means, that when something like this hits … well, let me go back.

  “I started working for the union in 1981.” Whobrey’s Kentucky hills accent broadened as he got into his story. “I started in March, and not a month later President Reagan fired the air traffic controllers. Permanently fired the strikers. That doesn’t happen much in American history. Killing PATCO [the air traffic controllers’ union] sent the signal to business—as it was supposed to—that it was okay to get rid of the unions. ‘Uh-oh,’ I said, ‘I have the knack for gettin’ involved right when the wheel’s going into the mud.’ ”

  And with unions went wages.

  “We used to have plenty of people around Evansville making $15, $21, $25 an hour. Those are people that can survive through a recession.

  “Okay, so you take a 15 percent temporary pay cut—like we just gave. Our members could hold out till times got better. But now the middle-class worker starts out in debt. They have nothing to fall back on. So you’re not looking at just this recession, you’re looking at the cumulative effect of at least thirty years that started when I joined the labor movement and Reagan broke PATCO.”

  At least Whobrey had recognized a historic turning point when he saw it. I’d covered the PATCO strike as a reporter, and I hadn’t.

  The article I wrote explaining the strikers’ grievance—not money, but hours and stress, the same complaints as today’s air traffic controllers—was killed by the paper that assigned it. In its place the Village Voice ran a front-page essay about PATCO in which a hip black journalist reviled those white men (which they almost all were) making $50,000 a year (which they almost all weren’t) who were in a position to tie up the country’s airports (which it turned out they couldn’t).

  This was the first time I’d had an article killed. It should have alerted me to how profoundly the entire nation was being lined up against unions. I assumed, instead, that the article wasn’t quite up to my standards. And it wasn’t. For unlike Whobrey, I hadn’t spotted this as the very moment that the wheel went into the mud.

  Between then and now, Whobrey’s southern Indiana Teamsters local declined from five thousand to three thousand members. “And we’re doing better than most,” he said.

  “One of our guys out of work got a job driving hazardous material, explosives, I think. Anyway, he’s got a hazmat license, but he got $12 an hour and no benefits. Oh yes, they gave him an IRA, and they’ll match anything he puts in up to 6 percent of his pay. What they don’t say is they won’t pay you enough to put anything in. So they don’t have anything to match, and you don’t have any pension.”

  In a Monday morning quarterback kind of way, Whobrey and I wondered what would have happened if stronger airport unions had gone out to defend the amateurish air traffic controllers. Would solidarity at the start have staved off thirty years of decline? That kind of speculation is both useless and endless.

  It was after five when Chuck Whobrey let us out of the Teamsters building onto an empty downtown street.

  “So what you’re looking at in Evansville,” he said, ending where he started, “it’s not the result of just this recession. It’s the effect of thirty years since the wheel went into the mud for American workers.”

  Father and Son Philosophies

  Whobrey is right. What I saw on the streets of Evansville was not the result of one deep recession but the cumulative effects of a much longer downturn for American workers. But what started that downturn?

  From the end of World War II until the 1970s the United States enjoyed a quarter of a century of shared prosperity. Corporate profits rose steadily, and so did the wages of a working class that called itself “the middle class.”

  Then the sharing petered out. Between 1976 and 2007, 58 percent of every new dollar of income generated went to the top 1 percent of households. Economists suggest many triggers for the Great Reversal. They fall roughly into two categories.

  The majority of economists point to specific pressures on profitability like the oil price shock of 1973 and competition from newly rebuilt Germany and Japan. The argument goes that as the sole industrial power to survive World War II intact, the United States had grown complacent about modernizing while Germany and Japan built almost everything brand-new. As soon as profit rates dipped at home, our alert financiers helped expand competition further by moving money abroad, including some to the countries that would soon become known as the Asian Tigers.

  Whichever specific pressures to profitability they emphasize, these economists agree that U.S. profits fell (or started to stop growing) in the early to mid-1970s. By the 1980s employers became serious about cutting labor costs.

  A smaller group of economists explain the Great Reversal primarily as a political phenomenon. By the mid-1970s, they say, the lessons of the Great Depression had been almost forgotten—except by a few diehards who’d been waiting for the chance to undo the New Deal. By the 1980s this group, buoyed by neoliberal sentiment, was powerful enough to elect politicians like Ronald Reagan and Margaret Thatcher who weakened unions at home and made it easier to move work abroad. These and subsequent administrations redistributed wealth upward through tax “reform” and, in the 1990s and first decade of the twenty-first century, through privatization, deregulation, and the end of capital controls. In other words, a political sea change freed capitalists to act as they always would if you remove the restrictions.

  To oversimplify the differences only a little: one side says they did it because they had to; the other side says they did it because they could.

  My own view is that real challenges to profitability surfaced in the 1970s. But the balance of political power determined that these many-faceted economic problems would be tackled primarily by cutting labor costs. There would be no more sharing of the ups and downs.

  However complex and debatable the causes, it’s clear that starting around the mid-1970s, the wealth gap widened while hourly wages stagnated or declined.

  If couples wanted to maintain homes like the ones they were raised in, they borrowed and/or took second jobs. This left many families with both unmanageable children and unmanageable debts.

  Chuck Kenny accuses himself of trying to keep up with the Joneses. But I don’t think Chuck was trying to keep up with the Joneses next door. He was trying to keep up with the Joneses of a generation earlier. Since his father had deserted the family, Chuck’s image of middle-class life may have come from television. But for most Americans—white Americans, at least—those imaginary TV families of the 1950s were statistically real.

  A blue-collar worker like William Bendix in The Life of Riley could own a modest home, buy a television (far more costly for its time than a computer today), take his family on camping vacations, and send a boy to college in preparation for a job that
would pay better than his father’s and actually existed.

  A professional or middle manager like Chuck Kenny could own a ranch home, take more expensive vacations, trade a car in every few years, then send the boy and the girl to college. For unless you were incompetent or unlucky, your earnings gradually increased over the course of your working life.

  That had already begun to change when Chuck Kenny entered the workforce. But it’s hard for any of us to appreciate how a gradual decline affects us day to day.

  Mr. Kenny knows that things haven’t turned out as they were supposed to. Even on two incomes, he and his wife couldn’t put two children through college and then glide into a debt-free retirement. But after 150 years of objectively moving up, we Americans perceive of our country as a land of opportunity. Each couple is bound to think that its personal stagnation rests on personal limitations or mistakes.

  Other people bought and sold houses at the right time, Chuck reminded me. And he had opted for the security of a large corporation when he might have stayed with that small business where they wouldn’t get rid of an older worker just to lower the payroll.

  Chuck worries that Big Box is after him because he can’t cut the mustard anymore. He’d mentioned to me, almost in a whisper, that he doesn’t take to the computer the way the young people do. He must also have the unavoidable suspicion—this must be difficult to express, even to one’s wife—that he hasn’t achieved all he might have because he’s just not a top-notch individual.

  The Kennys may indeed have failed to grasp opportunities that would leapfrog them over others. But their basic economic mistake was to assume that salaries, house prices, and savings would gradually increase over the years. In other words, the Kennys fell behind because they didn’t fully grasp that they weren’t going to get ahead.

  But adjusting to downward mobility would have required a midlife course correction that’s inimical to Americans of their generation. As I’ve said, down is an un-American direction.

  Their son, Michael, on the other hand, was born on the down escalator. Since childhood he’d watched his parents running to stay in place. His mother had recently managed to keep her job when her company merged with another organization and downsized. She now supervises more people and works longer hours for the same money, Michael told me. Both at home and at the staffing agency Michael saw employers raising quotas and beating down wages. It has been going on as long as he can remember.

  In this long and one-sided class war, Michael Kenny has declared himself a noncombatant. You won’t catch him struggling to maintain a higher standard of living on a declining wage. And what sort of fool borrows to get things he can’t afford now, when his future income is bound to be the same or lower? Michael won’t flail like his father to maintain a middle-class lifestyle; he’ll go with the flow.

  However frustrating it is to his parents, his neo-hippie lifestyle makes sense. “Do your own thing” can be a comforting mantra when you can’t afford matching furniture anyway.

  A Different Generation Gap

  There’s an obvious generation gap between Chuck and Michael Kenny. They’re father and son, after all. But there’s another kind of generation gap between these Indiana folks and the Pink Slip Clubbers of New York.

  When factories started closing or moving abroad in the 1970s and 1980s, we were told not to worry. Yes, some blue-collar workers might have to be pensioned off. But the rest of us would become “information workers” in the “postindustrial society.” The important thing was to acquire the skills of the future.

  The four Pink Slippers prepared themselves appropriately for careers in symbol manipulation. Yet Feldman, the graphics man, worked for many years as an hourly temp. Like teaching French literature by the semester or writing computer code by the line, not only do you take home less as a contingent worker, but you’re outside the company and somehow outside the society.

  The other three Pink Slippers did brain work that requires a great deal of initiative and involves too much interaction with people here to be easily outsourced to some other English-speaking country. Still they had seen their real pay stagnate and some benefits, like pensions, fade away.

  Something bad has been creeping up the occupational ladder. First it hit blue-collar workers like Duane; then it hit pink-collar office workers like his wife. The college educated appeared to be keeping a couple of rungs ahead of it. But starting in the late 1990s, real income has been falling sharply for people with college degrees—so far excluding PhDs. You might say that the Pink Slip Club members were a generation and a half behind (or ahead) of the people in Evansville. But it was catching up to them even before the downturn.

  So far none of the Pink Slip Four has found a new job. Many employers are loath to hire people who’ve been out of work for a long time; some say so explicitly in their job postings. But assuming things pick up and businesses begin hiring, what will their jobs look like, feel like, and pay like when the recession recedes?

  Chapter Three

  INNOVATING THE JOBS AWAY

  Skirts, Shirts, and Securities: The Fate of Small Commissions and Big Bonuses

  Ina Bromberg genuinely likes to outfit people. Fashionable women check in each season at the Madison Avenue shop where she works to say, “You know what I like: What have you got for me?”

  Trim and well dressed herself, Ina sells petites at the flagship store of a designer brand with several hundred outlets. Even I had heard of the label. But I had to ask its exact place in the fashion hierarchy. “We fall into a niche below Barneys-Bergdorf-Chanel,” she explained.

  In the course of a twenty-year career at “the Boutique,” Ina had been its top-earning national sales associate more than once. Over the years she’d seen her commissions rise and fall according to varied and sometimes confusing formulas. At one point you earned commission only when you sold three or more items to one individual. At other times commission started only after you sold $350 worth of merchandise per hour, averaged daily. But with the recession it became very simple: the company ended commissions.

  It also moved the sales staff onto flexible schedules. “On Thursday we are told what our schedule will be for the following week. You can request a change if you have something like a doctor’s appointment. But you must do it two weeks before. So they print a schedule for the following week, and they expect everyone to jump to that. But if you have a request, it has to be two weeks’ notice.

  “When they told me my new hours that first week, it was down to ten. [Ina was already down to twenty-five hours a week by choice, but she still had benefits.] I said, ‘Why don’t you just lay me off? I can collect unemployment.’ And she said, ‘No, no, it won’t be this way every week.’

  “Now, in a way I don’t care how many hours I get. My husband is retired, we don’t depend on the income, I just like getting out of the house and seeing my regular customers. Here’s the problem: There’s an article on a fashion Web site about the Boutique. Read the responses. These are by people who worked in the office—probably not anymore. They say that in some of the stores they’ve taken all the full-time people and made them part-time. And with that there’s no more sick days, no more vacation days, no more personal days for anyone. They say they’re going to do that to all the stores, even New York. In our store we know they’ve continued the health benefits until March. What will happen after is what we’re trying to find out.”

  “Do they say this is just for the recession?” I asked. “Do they say things will go back to normal when business picks up?”

  “Not that I ever heard,” Ina answered. “I think—and I’ve been saying this for a year and a half—I think their ultimate goal is to have all part-time salespeople working shifts of four and a half hours. That way they’re not responsible for lunch, they have a lot of bodies, they pay no benefits, and it’s a constant turnover. This is what I think they want even after the recession because”—here she leaned in for emphasis—“they haven’t stopped hiring people.” Sh
e checked to see if I grasped the significance of that.

  “When you take on someone for fifteen hours a week, a shift here, a shift there, you certainly don’t get someone who’s making a profession out of the retail business. Those days are gone. There was a time you came in, you worked full-time, you were sales associate or a desk associate, and you might have thoughts of moving onto the corporate ladder. This is not what you’re taking onto staff when you hire people for five-hour shifts.

  “My salary has been cut down to probably a fourth … No, not cut by a fourth. I make a fourth of what I made a decade ago. But I’m ready to retire. There are a lot of single mothers working in this store. A lot of them are going to school. But this is what some of these people are going to be doing their whole lives. I really feel terrible.”

  As for Ina herself, she thought she’d probably keep working as long as they give her convenient hours. “I always enjoyed greeting people and speaking to them in a superficial friendly way. That’s my outlet for being a little creative, looking at people and thinking what they might wear.”

  Ina and I spent the rest of our time talking about clothing. She deplored certain of the Boutique’s merchandise cutbacks. They had eliminated size 14 petites. “People don’t realize that petite is a matter of proportion.” She just learned that there would be no size 5½ in the fall shoes. “And what could it cost to keep one narrow black belt in a small size in stock to complete an outfit?” To Ina this shortsighted cost cutting eliminated the special features that would bring shoppers back into the Boutique after the recession. Special features like herself, I thought.