Downwardly Mobile : Many Find Gold Years Tarnished
The trappings of John and Bev Apostle’s life are middle class. Their three-bedroom ranch home stands on a tree-lined suburban street. There’s an ’85 Buick and a pickup in the driveway. Among the vacation memories are trips to Rio de Janeiro and East Africa and a crazy, wonderful night when they flew to San Francisco just to have dinner at their favorite restaurant.
With the three children raised and an old mortgage at single-digit rates, Apostle had always figured that it was about now--at the age of 51, his quadruple heart bypass operation well behind him--that a man could take stock of his assets and know financial security was within reach. He wasn’t thinking big money; he only wanted enough to make the future not threatening. After all, wasn’t that what company loyalty and never buying anything you couldn’t pay cash for were all about?
Surrendered Wages
Apparently not, because after 26 years with Trans World Airlines, Apostle--who asked that his real name not be used--has joined a growing number of middle-class Americans who are downwardly mobile. In an effort to save their jobs and their company, they have surrendered wages and benefits, and today, in a reversal of the American dream, they are altering their life styles and lowering their expectations as their paychecks shrink, their vacations grow briefer and their medical coverage declines.
Not in half a century has the United States seen so many “givebacks” affecting so many people. But from musicians with the Honolulu Symphony Orchestra to lumbermen in the Pacific Northwest, from steelworkers in West Virginia to Greyhound bus drivers in Montana, thousands of Americans with years of service at their companies are experiencing the vicissitudes of MAAD--Middle Aged and Downward. Airline flight crews have been affected. So have copper miners, Catalina Island ferry-boat pilots, and wire-service reporters.
‘Not Easy to Change’
“I don’t care what anybody says, it’s not easy to change your life style,” said Apostle, a TWA operations supervisor at O’Hare Airport. “I ask myself what could I have done to prevent this and I always come up empty-handed. Was I so blind I couldn’t see what was happening to the company? Should I have gotten out? Am I trying to put the blame on someone else? How much of what’s happened is my fault? Was it my lack of a college education?
“I always figured I’d get an average salary and retire average, and when you see average slipping away, it’s a terrible feeling. Don’t get me wrong. We’re not starving. We’re not about to lose the house. But sometimes I stand out in the driveway and I ask myself: ‘Where did I go wrong?’ ”
Since 1979, Apostle’s before-tax paycheck from financially troubled TWA has fallen by $1,200 a month--from $3,300 to $2,100. His annual vacation has been trimmed by two weeks. His airline travel benefits have been reduced. His medical coverage has been cut back. At one point he was furloughed to a lesser position, then hired back after an interview to fill his original job at $104 less a month.
The irony is Apostle was such a workaholic company man that it almost cost him his marriage. “You didn’t marry me; you married TWA,” his wife would say. But he’d still bring home a briefcase of work every weekend and as soon as Bev was out the door, he’d spread his papers over the downstairs pool table and get to work. TWA was family, and he was a walking endorsement for what he proudly called “my company.” If friends asked him what airline to fly on a particular route, he’d practically lead them to the TWA ticket counter. Today, if friends ask the same question, he suggests they call a travel agent.
Legacy of Recession
“What we’re seeing is a legacy of the ’82 recession,” said Harley Shaiken, a labor expert at UC San Diego. “With the recovery have come high levels of employment and high levels of insecurity. And part of that insecurity is downward mobility--in terms of wages, benefits and career paths.
“We’re looking at an economy with a new structure, a structure with less opportunity.”
The first thing the Apostles cut out were the luxuries--vacations, restaurant dinners, an FM radio for the car. Then they started cutting back on the necessities. Small house repairs went undone. Their diet changed to include more macaroni and spaghetti. They watched for sales and bought clothes at discount stores. When their savings account was depleted, and they needed a pair of glasses or had to fix the lawn mower, it was a matter of waiting until Apostle could work a holiday and get some overtime.
“At first, I looked at the budget and said fine, I can take 10%, 20% off everything,” said Bev, Apostle’s wife of 29 years. “But you can’t. Not when the utility bill keeps going up 6% a year. There were too many things that couldn’t be adjusted.
“I think everyone anticipates goals and privileges when the family’s raised and you’re middle-aged. But when you see yourself losing even the status quo, well, how does that make me feel? Disgusted. Frightened.”
Numerous factors have contributed to the downward mobility of Americans such as the Apostles. U.S. wages, some economists say, had grown too high by the early 1980s in relation to industrial pay in other countries. The merger frenzy forced managers to trim work forces and hike profits as a defense against takeovers. A large pool of unemployed and underemployed workers enabled companies to hire employees at reduced wages and to introduce two-tier salaries, in itself a form of wage cut. And as foreign competition grew in the wake of a strong U.S. dollar and deregulation increased domestic competition in some U.S. industries, corporate managers convinced workers that company survival depended on keeping wages down.
Unions Lost Power
Just as important, the unions--which generated the pressure for large wage increases in the 1960s--lost bargaining power during the recession of 1981-82. Since 1980, the percentage of union membership in the work force has fallen to 17% from 23%, making the non-union labor supply attractive and accessible to employers. Once the idea of wage concessions caught on, it spread like wildfire, even though economic realities didn’t always dictate such strong measures.
“The record of concessions and givebacks is not a good one,” said Ronald Peters, head of labor education at the University of Illinois. “When a company is in a situation that the only thing that will keep it going is a reduction of wages, history tells us that company is in pretty tough shape.
“Behind a concession proposal is usually the management’s motivation to bilk the last ounce of life, and they generally do that by bilking the unions.”
In Spokane, Wash., the Kaiser aluminum mill has stood since World War II as a community symbol of job stability and steady wage hikes, a place where young men often worked alongside their fathers and uncles. But with Kaiser in financial difficulties, Bruce Walter, local president of the United Steelworkers of America (whose national membership has dropped to 600,000 from 1.4 million during this decade) brought his members a contract proposal in 1985 that called for $4.50 in wage and benefit cuts.
“Looking back on it, there’s no doubt in my mind that was the best proposal we could get,” said pipe fitter Doug Robinson, 43, “but I’ll tell you this: Bruce was dead meat the minute he put it on the table for the members.”
Voted Out of Office
Although the membership accepted the cuts reluctantly, Walter and eight of the other nine local presidents were voted out of office by workers looking for someone at whom to direct their anger. Walter, a 21-year Kaiser employee, recently has been returned to the presidency and a new contract will restore some of the lost wages and benefits.
“The big thing was losing the benefits,” said George Hogue, 44. “You don’t have to buy the best cut of meat, but if you or your family’s sick, those doctor bills and hospital-room bills are going to kill you.”
“The biggest thing I noticed with the cuts,” said his friend, Lynn Waldram, 45, “is all the wives who went back to work. I know mine did.”
“So’d mine,” Hogue said. “With Carol working, getting $4 an hour--just about minimum wage--that makes up for the lost wages but not the benefits.”
“Who do you blame?” Waldram said. “Everybody, I guess. A lot of people lay it on management but you’ve got to blame the union, too, in a way. And the economy’s not that good, and the workers, well, we want everything we can get, too. So what I’m saying is that this is an overall problem.”
‘So Am I Going Backward?’
“I go along with Lynn on that,” Hogue said. “I’m taking home $1,200 a month now after taxes. That’s $80 a week less in take-home pay. So am I going backward? Yeah, I’d have to say I was.”
“You know, my dad hired on here in ‘46,” Waldram said. “I think he said there was something like 4,000 people working at the plant then. Now there’s about 1,000. It used to be people would say this mill would go on forever and forever. You don’t hear them saying that anymore.”
For most of the 115 million Americans with full-time jobs, the last few years have been a period of relative prosperity. The April unemployment rate of 5.4% was the lowest in 14 years. The median weekly salary in the country is up to $385. Manufacturing production has increased by better than 3% annually through the 1980s. Under the Reagan Administration, more than 5 million new jobs have been created.
But the good tidings also have a darker side. Although wages grew by 3.3% last year, consumer prices went up 4.4%, thus leaving Americans with 1.1% less spending power. Real wages, in fact, have hardly increased over 15 years when adjusted for inflation. And many of the newly created jobs have been in poorly paid service industries; tens of thousands have been filled by people returning to the work force by necessity, not choice.
Traditionally, management does not share the workers’ burden of downward mobility. General Motors executives, for instance, laid off or fired 30,000 workers in 1986, then voted themselves record bonuses. Executive salaries nationally increased 17% that year and, according to Daniel Mitchell, director of the Institute of Industrial Relations at UCLA, the number of people in managerial positions continues to grow larger in proportion to the overall labor force.
Among those Americans who have had to lower their expectations the last few years are workers in California’s frozen-food processing industry, a business severely hurt by cheap imported vegetables from Mexico, where workers earn $2 or $3 a day. Example: In 1983, less than 25 million pounds of broccoli were imported into the United States; last year the figure rose to 195 million pounds and by next year it may reach 300 million. Unlike the purchaser of manufactured goods, shoppers in the United States usually don’t know if the peas and spinach and cauliflower they buy are foreign- or American-grown, because they are sold side by side without distinct markings of origin.
Foreign competition, questionable management decisions and an 18-month strike had forced one major processor, the Watsonville Canning Co. of Watsonville, into bankruptcy and finally out of business. David Gill, a major California grower, bought the assets in March, 1987, and in an effort to revive the company now known as NORCAL and save 700 jobs, he made two moves, one predictable, one not.
First, he negotiated a new contract cutting the base hourly wage of workers to $5.85 from $6.66 and reducing health and pension benefits. But he also installed a bonus incentive for increased production and cut executives’ salaries by 25% to 30%. The previous president earned $130,000; Gill’s salary is $50,000, of which he has not yet drawn a cent. He got rid of the company plane, banned first-class travel and before long the BMWs and Mercedes that executives used to drive were nowhere in sight.
“When management is willing to share in the misery like this, it softens the blow of wage cuts and gives us a feeling that we’re all in this together,” said Sergio Lopez, secretary-treasurer of the Teamsters local representing NORCAL workers. “The other way, when only the workers suffer, just creates turmoil in the work force. Now you’ve got management trying to trim costs and make the company viable and it’s going to work because they’ve got the workers behind them.”
Corner Has Been Turned
Production has increased more than 10% under the new management. Chavelo Moreno, 46, a steam-boiler operator who came to the United States from Mexico at the age of 16, learned perfect English and got a high school diploma by studying at night and became a U.S. citizen when he was 30, thinks the corner has been turned.
“Things are going to be OK because everyone knows that if the company makes it, we make it too,” he said.
But Moreno’s hourly wage has dropped to $10.06 from $11.98 and that decrease, combined with having had to live on a $55-a-week union stipend during the strike, has forced him to reconsider his aspirations and adjust his already modest spending habits.
“I think we’ve learned a lot about not wasting our money,” he said. “We’ve learned to shop for sales and not cook food that we aren’t going to eat. We look around for car insurance now. And we’ve learned to buy American; imports are one of the big reasons we’re in the situation we are.
“What makes me sad with the wage cuts and the cost of living, though, is realizing that I’m not going to be able to afford to send my kids to college. I didn’t want them to have to work as hard as I did.”
