Wages, unions’ power have both declined
CHICAGO – Jim Ellis had a job with benefits but gave it up for a shot at something with a bright future, if he could just get his foot in the door.
In this part of the country, that meant he wanted to work for Caterpillar Inc., the construction equipment powerhouse. Now Ellis is on the morning shift at the company’s East Peoria, Ill., plant, installing fenders on tractors and working on hydraulic lines, a manufacturing job description that once promised an American middle-class lifestyle.
The reality for Ellis is nothing like that.
With the new job he started in January, Ellis’ pay jumped by $5, to $15.57 per hour, but he has no medical benefits for himself or his 3-year-old daughter, custody of whom he shares with his ex-girlfriend. Between rent and child support, he acknowledges falling back on his parents for support.
“If you talk to my mom and dad, they would tell you I’m an idiot because I’m barely making ends meet,” Ellis, 38, said.
Reflecting on his pay, Ellis recalled the years he worked as an assistant manager at a fast-food restaurant. “It was one of the easiest jobs I’ve had,” he said. It was also the best-paying job he’s had. He earned up to $34,000 a year – a little more than $16 an hour.
His move to Caterpillar hardly evokes the kind of jobs most people think about when they hear President Barack Obama or his challenger, Mitt Romney, talk about bringing back manufacturing. The days when workers earned enough money to buy a car, a boat or a second home while supporting their families no longer exist for a growing number of people employed in manufacturing.
Factory jobs can still be good, but in the past three decades, benefits have eroded and pay has stagnated for many, or even fallen.
Chris Alig considers himself a middle-class family man, complete with a white picket fence guarding his home. But to maintain his lifestyle, he needs at least 20 hours of overtime each week. The caveat, he said, is that overtime is not guaranteed.
When orders are rolling in, overtime can be abundant. But any slowdown in growing economies such as China or Brazil can trickle down to workers like Alig. Last month, workers learned that the company was cutting overtime and announced temporary layoffs that will occur next month.
“I had a misconception that if you worked at Caterpillar, you got it made. That quit being the case in the ’90s,” Alig said.
Alig, 39, makes $17.34 per hour installing custom parts on tractors. If he worked 40-hour weeks, he would be short about $1,600 in meeting his monthly budget of $3,800.
Wages have declined across many industries, including manufacturing, as unions have lost their bargaining clout, according to the Economic Policy Institute, a pro-labor think tank based in Washington.
Robert Bruno, a professor of labor and employment relations at the University of Illinois-Chicago, said earnings of newer manufacturing jobs “are not poverty wages, but they are not middle class. If the jobs don’t pay sufficiently better, sadly, it will turn the manufacturing sector into another low-wage market, and we already have many of those,” he said.
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