Monday, October 25, 2010

The latest Nafta victim: The Detroit Symphony

The effects of NAFTA are trickling upward. Just go to Detroit, where upper-middle-class white-collar workers are now struggling. That's because far fewer well-paid factory workers are making products there than they did before job-killing trade agreements.

Back when NAFTA started giving Detroit's autoworkers the SHAFTA, people thought it was a problem that only blue-collar workers had to deal with.

But two decades have passed and now Mexico exports more cars than America does. It sure isn't cheaper to buy a car here. And Detroit's upper-middle class is finding out that high wages for union members didn't make things worse for them after all. They made things better.

With the disappearance of so many good-paying union jobs, Detroit's realtors, lawyers, accountants, restaurateurs and sporting-goods store owners are having a tough go of it. Wealthy Detroit suburbs are falling on hard times. Even the Detroit Symphony Orchestra is struggling.

Harold Meyerson points out how Detroit -- and Los Angeles as well -- once flourished because factory workers were paid well.

...Detroit had had the greatest concentration of single-family homes of any American city until Los Angeles surpassed it, and both cities owed this distinction to the income levels of their factory workers. Detroit in the '20s saw a boom in the construction of single-family homes; more manufacturing workers could afford to buy homes in the heart of the auto industry than in any other city at that time...

...The years from 1947 to 1973 were the only extended period in our history when working-class incomes rose as steeply as upper-middle-class incomes. Not coincidentally, these were the only years when more than a quarter of the U.S. workforce was unionized. And they were the years when America became something new under the sun: the first nation in history with — by the yardstick of consumption, anyway — a middle-class majority.

All that has changed in Detroit. Grosse Pointe, for example, is a suburb once synonymous with wealth and privilege. Now, according to Time Magazine, Grosse Pointe is synonymous with "new frugality." the Grosse Pointe Moms Club, a support group for more than 100 at-home moms, reality means bargain hunting and budget consciousness. The challenges of the prolonged economic downturn — job loss and retraining, business slowdowns, wallet tightening — spill out in daily conversations at swing sets and kitchen counters....

The frugality in Grosse Pointe is but one example of the economic struggles in the Detroit suburbs, where the grip on middle-class life has, for some families, become tenuous. The loss of hundreds of thousands of jobs among families without any real nest egg has imposed painful and unfamiliar choices — about which bills to stop paying, about going to a government office to sign up kids for Medicaid, about calling to register for food assistance...

Today, the Wall Street Journal reported that the symphony -- a symbol of prosperity in cities around the world -- is broke. It has lost millions in the past few years and has to pay rising interest rates on $50 million in debt. Now the musicians are on strike.

On Monday, the musicians begin their fourth week off the job, protesting proposed pay cuts they say are too steep. The orchestra says it has been forced to cancel all performances through Nov. 7, that the remaining ones are in jeopardy, and that no further talks are scheduled.

So next time you hear someone saying that the autoworkers ruined the domestic auto industry, tell them it was trade deals that did it. And tell them that trade deals are ruining the rest of the middle class as well.