A Race to the Bottom for Auto Parts Workers

An auto parts worker and a tire.

From OurFuture:

By Dave Johnson

Some states have cut worker safety protections and made it difficult for unions to do their job. They say they do this to attract jobs and businesses. What they are really doing is hurting human beings in their race to the bottom, and the nation is following their lead.

Lowering Wage And Safety Standards

What happens when a state lowers wage and safety standards and keeps unions out to attract jobs? Peter Waldman at Bloomberg BusinessWeek took a look at Alabama, where auto parts makers like Ajin USA and the Matcor-Matsu Group Inc. have set up shop to service the automakers like Kia and Hyundai in the state. The results are are even worse than you might imagine.

Waldman profiles workers like 20-year-old Regina Elsea, who worked 12-hour shifts for Ajin at $8.75 an hour, seven days a week, in the hopes of moving from temporary to full time status. What happened instead? She was pinned against a steel dashboard frame by an out-of-control robot, and killed.

He also profiles Cordney Crutcher, who lost his left pinkie when a hole puncher misfired and caught him off guard at the end of a 12-hour shift.

He was put on a press that had been acting up all day. It worked fine until he was 10 parts away from finishing, and then a cast-iron hole puncher failed to deploy. Crutcher didn’t realize it. Suddenly the puncher fired and snapped on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.

Why do workers face such dangerous conditions? Waldman explains.

Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and of course, if the injured can find a lawyer in a state where “tort reform” has limited access to the courts, how much good does a bit of money do? ‘I’d rather have my arm back any day,’ Allen says.

You get the idea. When governments remove regulations and protections to be “pro business” the result is that the people the government is supposed to be watching out for are endangered, and they take more risks in exchange for lower pay. This is what happens when a government becomes corrupted and no longer operates as the agent of the people, and instead operates to facilitate profit for a few.

Note that the Trump administration is working to cut protections and regulations nationally, including cutting out the OSHA record-keeping rule. Interfaith Worker Justice warns that the Labor Department is cutting job and safety training programs “that will affect the most vulnerable Americans.”

Who Really Benefits?

When states become corrupted and cut protections and regulations the regular people in those states certainly do not benefit. They end up with low-pay crap jobs and the state uses its power to fight their ability to band together in unions.

When states throw in tax cuts it means the people in the states don’t get good schools, infrastructure, services, either.

But wait, there’s more. When a company moves to such states the working people where the companies and jobs moved from lose their jobs, and everyone else in those states faces wage pressure as a result. And those communities lose their revenue base so their schools, infrastructure, services suffer as well.

And who is to say that yet another state won’t offer even lower pay and fewer protections to ‘compete” for the businesses? It is a race to the bottom.

If you look at our country as a whole instead of as competing states, we all end up poorer in aggregate, with lower pay, worse schools, etc. If the first state had jobs at $20 an hour, but now the second state has those jobs at $10 an hour, that’s a loss of $10 an hour to the working people of the country. The people who get the jobs are poorer because they are paid less, and the people where the jobs were are poorer, too.

As the tax base declines, and schools, infrastructure and the rest suffer the longer-term ability for business to prosper goes away. In other words, after we eat the seed corn of our prosperity, we starve.

Or, to put it another way, look at what has happened to our country in the years since the late 1970s deregulation and “tax revolution.”

“I’ll Be Gone, You’ll Be Gone”

Who benefits? Who actually gets the money that is cut from budgets and wages and protections as states compete for businesses and jobs? Who gets that $10 an hour difference from the above example?

People say, if a business (or state in this example) harms its ability to do well in the future, that’s not very smart. This is because they look at the business as some kind of sentient entity that makes decisions.

But people make decisions, not companies. And people might not be making decisions to benefit their companies, they might be making decisions to benefit themselves.

“IBGYBG,” or “I’ll be gone, you’ll be gone” is an actual thing. I’ve gotten my profit, commission, payoff, whatever, and it doesn’t matter what follows.

The money from selling out our future (and corrupting governments by paying off politicians to sell out our future) has gone to the executives and investors in those businesses at the time. These individuals sell out everyone else for cash they pocket today. They sell out the future of the companies they are fleecing and the communities they drain, so they can pocket the assets and seed corn for themselves today.

What To Do?

The first thing to do is understand that arguments for cutting regulations, taxes, and protections are self-serving arguments designed to enrich a few people at the time, at the expense of the rest of us and our future. After they get rich they’ll be gone and the rest of us are left to try to pick up the pieces. Or, to put it another way, look around and see what has happened to us.

The next thing to do is refresh our understanding of democracy and government. We the People are supposed to be in charge here and our government is supposed to exist to make our lives better. Government is us, decision-making by We the People. People who want “smaller” or less government” are really saying they want less decision-making by We the People. When they say government is “burdensome” or “inefficient” or “government gets in the way” they are saying democracy and decision-making by We the People is hindering their ability to get more for themselves.

Finally, once you understand these things, get active and demand that taxes and regulations and protections and government be restored so we can all share together in the prosperity that democracy brings us – all of us together, collectively – over the longer term. We have to stop the ability of a few wealthy people and their corporations to pay governments to do things that benefit them at the expense of the rest of us.

This includes calling your representative and senators and telling them you demand a restoration of democracy. What will restore democracy? As unpopular as it may sound, it’s taxes, regulations and protections. Because these provide the oversight, transparency and accountability that keep our workplaces safe, and our democratic government alive.

Read more from OurFuture.