We’ve got more than car trouble

Marketplace Staff Sep 20, 2006

KAI RYSSDAL: Here’s a lawsuit we probably should have seen coming. California’s attorney general sued six big carmakers today. Ford, GM and DaimlerChrysler among them. The cause of action is global warming. Attorney General Bill Lockyer says auto emissions hurt California’s environment. And taxpayers have had to spend millions of dollars to clean it up.

No response so far from Ford and the rest. American auto manufacturers have other things on their minds. They’re buying out workers right and left to get back to black ink. Commentator Robert Reich says there’s a lesson in Detroit’s problems.

ROBERT REICH: Once it gets through its latest round of job cuts, Ford will have fewer American workers than Toyota. General Motors has become a shadow of its former self — not to mention its new compact car is built in South Korea. Daimler-Chrysler is headquartered in Germany.

Detroit’s Big Three are shrinking into the Small Three, now employing half the number they employed 40 years ago. Meanwhile, Toyota, Honda and Nissan are the New Three. In a few years more Americans will be working for Japanese automakers than work for American. Does it really make any difference? Maybe to our national pride.

But, hey, we have the largest retailer in the world, don’t we? Wal-Mart now employs more people than does the entire U.S. auto industry. And we also have the world’s largest and most expensive health care industry, and biggest military. Over the last five years, health care and the military have been responsible for almost all the net new jobs created in America.

But the real issue isn’t the number of jobs. It’s their quality. Detroit’s Big Three paid wages, health and pension benefits that together amounted to about $80 an hour in today’s money. The Japanese transplants in America pay half as much. Wal-Mart pays less than a quarter as much. Meanwhile, hospital orderlies and elder-care workers don’t come near matching the United Auto Workers at the old Big Three. And military work is just plain dangerous.

So as the Big Three shrink, we ought to be making up for the good jobs we’re losing. But we’re not investing in emerging industries like biotechnology, non-fossil based energy, new materials, and nano-technologies.

Out of these could come the good middle-class jobs of the 21st century. Yet, according to a recent report of the National Center for Public Policy and Higher Education, the post-boomer generation is less educated than the boomers, and less able to afford college.

There’s no bringing back the Big Three. But shame on us for turning our backs on the big picture.

RYSSDAL: Robert Reich is a professor of public policy at the University of California Berkeley. He used to be the secretary of labor for President Clinton.

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