Written by MSNBC has a sad and educational article about the plight of Detroit in today’s Economy. The article explains that some inmates released from jail are intentionally getting re-incarcerated rather than live in the conditions they are finding in the inner-city neighborhoods. And that the average price of a home in the city has slipped to $18,513. Some owners can’t give their homes away. There are better circumstances in Detroit’s outlying suburbs, and in areas undergoing government-sponsored redevelopment, but the majority of the City of Detroit is in crisis.
It’s a sad piece, but I think all Americans should be aware of this state of affairs. It helps us understand why managing jobs, the economy, and US industry is important to our nations stability and welfare.
It also makes me really glad to live here in the Seattle Area, where our economy is still relatively strong by comparison. We still have a chance to keep it this way if we make smart decisions.
A lot of blame can also be placed on share-holders and the managers.
One of my friend insisted that GM should go for broke and let he union strike until they accept a viable contract, this was in the 90s. I had thought he was being a bit extreme… After GM caved in, Ford followed..
fast foward today, he turned out to be right on the money.
Corporate greed.
Could it be that there are those (not all) in large corporations that are more interested in lining their pockets then taking care of it’s customers and the people who made the companies? Maybe the unions have gotten greedy but for the most part they only follow the example shown by corporate executives.
Dave
Coming into this thread late.
It seems to me that one of the major problems with the Big 3 isn’t so much the higher pay and benefits. Why do I say that? Well, you can’t just look at the higher benefit costs – you need to take into account the much higher government provided benefits from the Japanese government. In Japan, the total corporate tax rate is approx 40% [1]. In the US, it slightly lower (39%) [2]. How big a difference is that? Not much, but then you need to consider that Japan (and most other developed countries) don’t have the massive number of tax loopholes that we do, so the effective rate is likely much lower. The unions are expensive, but that’s not the only, or biggest, problem.
The biggest problem with the unions in general isn’t the wages/benefits, it is the inability to quickly change production levels. If the big 3 could easily ramp down production (and see labor costs for doing so), they would be WAY more competitive. Take a look at the blue collar unions (wood, trucking, plumbing, etc) where you go to the hall, get a job, and go to job site. When the job is over, you’re done. That is what we need – unions for wages, not job security.
I wonder what Boeing is thinking about all of this…
[1]
http://www.economist.com/countries/Japan/profile.cfm?folder=Profile-FactSheet
[2]
http://en.wikipedia.org/wiki/Taxation_in_the_United_States#Corporate_income_tax