Work Two Years and Die

Yes, the middle class is dying. We in the Keys are helping to kill it. Even those in the middle class themselves. How? Herr Dr. International Business Professor Boettger is going to teach you what “outsourcing” and “globalization” mean to us in Paradise.

The death of the middle class began with the gutting of labor laws in the 1970’s and culminated in the passage of NAFTA in 1994. At the time I was all for it, International Business being a prime MBA class that I taught at the time.  I, old Bush, Clinton, and a majority of both Democrat and Republican legislators all cheered.

The key selling point of union busting and having the Chinese do all the manufacturing is “Hey! You can get everything cheaper at Walmart now. Yay hooray!” Most academic economists today and think tankers on the right still maintain the middle class is better off because their shirts, bedroom sets, and TVs are much cheaper when the people who make them get paid squat.

What these pinhead economists, presidents, legislators on both the left and right, and, yes, one-time pinheaded IB Professors all missed is the effect on the people who formerly did these jobs for a living wage. Before I bring this down to the local level, the jobs of the custodians and maintenance workers for the school district and our hospitality workers, I’ll give the more vivid example of what happened to furniture making in the U.S. just ten years ago.

In the late 1990’s, almost all furniture bought in the U.S was made here, most of it in North Carolina. They had stolen the industry from northern states which had used up their hardwoods and had unions. North Carolina was shipping its excellent walnut and oak up north when they realized they could copy the designs and make the furniture themselves. No wood shipping costs, and as a “right to work” state, no pesky unions to worry about, so wages and benefits could be much less.  So bye-bye Michigan, hello North Carolina.

Then NAFTA came along. Designed to ease tariffs with Canada and Mexico, it ended up letting the Chinese in. One patriarch of a dominant southern furniture dynasty saw for himself what they were up against when he visited a Chinese competitor’s factory:

[He] was incredulous at the lack of safety measures in the Dongguan finishing rooms–no fans, no masks, nothing.  [He] actually had a fondness for the smell of finishing material, but these fumes were so strong he had trouble catching his breath. “How do they stand it?” he asked the manager, choking as he spoke.”Spray two years and die,” the manager said. At which point there would be twenty more lined up to take the fallen worker’s place.

When that’s your opponent, you have no chance. For years, the American factories did everything they could to fight a losing battle, closing plant after plant, actually shipping their prized hardwoods to China, buying the furniture the Chinese made with it, and selling it to retailers as they had done in the past with their own creations. But soon enough Walmart and the other major retailers realized they could buy direct from the Chinese themselves, and sayonara to a few hundred thousand good jobs in the South.

Yes, the furniture is just as well-made and cheaper. But the loss to America goes much further than the obvious harm done to our workers. They went on average from $15/hour with health benefits and a pension to $9/hour with neither, if they could even get a job. Worse for us all, the money they used to get paid gets shipped overseas. American workers spend their wages in their own communities. Every furniture dollar got spent on average seven times before ending up in someone’s investment portfolio. Dollars spent on paupers’ wages in Dongguan stay in Dongguan.

So now we come to the terrible error of outsourcing our custodial and maintenance workers’ jobs in the Monroe school district. I am going to use rough numbers to make my point understandable, but they are pretty close to reality. We used to pay our custodians $2,000,000/year in wages. The Board got the bright idea to save money by paying a northern company $ 1,500,000/year for the same work–$ 1 million in slave wages, and $ 500,000 to the MBAs who sweet-talked us into the deal.  But who cares? Bingo! It means a cool half million in my, the downtrodden Monroe taxpayer’s wallet, yes?

No, no, a thousand times no. What that means is that we have just shipped around $ 1,000,000 of my Monroe tax money out of the county and into the hands of Northerners who will never spend a cent of it down here. Under the old system, the custodians actually made enough to live here, with their spouses working, of course. Now the workers themselves get half of what they used to get. That means they spend only half as much here as they used to. Those closer to Homestead bus down, so all their money gets spent out of county

And shame on us, we downgraded a (lower) middle class job to a minimum wage poverty job. Aren’t we proud of our green-eye-shade leaders.  Remember, my tax dollars spent as wages to locals results in their contributing to our sales taxes, paying enough rent to cover their landlord’s property taxes, and eventually someone else’s buying a home and sharing the property tax burden with me.

Class dismissed. But for extra credit, let me show you another form of private sector globalization in the Keys that is screwing our own Monroe high school graduates. Our biggest industry is hospitality. One outrageous practice that suppresses wages below the poverty line is the large chains using foreign labor cheaply under the guise of giving their hotel workers “training” under the “student” J-1 visa program.

The way it works is that some desperate northeastern European hotel worker gets a J-1 visa to “study” hotels in key West. He gets here and works his butt off 50-60 hours/week for minimum wage for a year and goes home. Neither he nor the hotel pay Social Security tax. By starting and ending mid-year, he gets to deduct his personal exemption twice, as well as travel expenses in most cases.

Remember when the Pier House was sold a couple of years ago? They fired everyone making over $ 10/hour, and got rid of the community’s beloved Piano Bar, once Bobby Nesbitt’s home base and for years the local’s favorite, Larry Smith’s, various showcases. Cynthia and I boycotted it until we won a free meal.  Sure enough, our busboy spoke no English, and our server had a thick eastern European accent. Ah, the brilliant coups of corporate life.

So, Keys graduates aspiring to live and work where you grew up: white collar, The Pier House and their corporate ilk would rather hire people desperate for a Key West hard-working vacation who don’t pay social security or federal taxes into our pot. Blue collar Keys graduates, our school district would rather hire minimum wage workers from Homestead than pay you a living wage.

There you are: do any of you give a damn? Or is your main dream a Walmart on Rockland Key?

Furniture story and quote from “Factory Man” by Beth Macy, 2014.

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