October 18, 2005
Interview With Delphi Boss
Yesterday's Wall Street Journal featured an interview with Delphi's boss.
Here is the link and brief excerpt:
Reassembling Delphi (WSJ Subscription Required)
WSJ: Can you elaborate on those forces?
Mr. Miller: Globalization is a fact of life these days. What has been brought into sharp relief is the differing value the global market places on knowledge workers versus basic manufacturing workers. I was struck by what I saw when I visited our Delphi operations in Mexico last week. Our average hourly worker makes about $7,000 a year, while the average salaried worker makes about $35,000 a year. A spread of five times. The same spread, or wider, exists in all low-cost countries. The implications for America are enormous, and it boils down to this. If you want your kids to enjoy the great American dream, get them a good education. The days when manual unskilled labor can deliver a $65-per-hour wage are disappearing.
My recent experiences have been with industries that are undergoing profound change What they have in common is a social contract, worked out over the past half-century with strong centralized labor unions, to elevate their work forces with elaborate defined-benefit retirement programs. Back in the days when you worked for one employer till age 65 and then died at age 70, and when health care was unsophisticated and inexpensive, the social contract inherent in defined-benefit programs perhaps made some economic sense.
Today, defined benefit programs are an anachronism. First off, they force people to stay with one employer, even though we have a much more mobile and flexible population these days. Second, the notion of having all your retirement eggs in one basket -- your employer -- is a concentration of risk that is simply inadvisable for anyone in today's fast-moving economy. Finally, people are living longer these days. Of course, that is a good thing. But the question is, how can we afford it?
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Education is always used as a weapon of the elite to tell Americans how stupid they are and if only they had studied harder their jobs would not be getting shipped off to the 3rd World. In addition, this paragon of capital forgets to mention the IMMENSE disparity between upper management compensation and the rest. No, the workers of the past did not have special conditions that "made sense" back then but not today. Instead, the workers of the past were pushed to the brink by capital and fought back. The main difference was that capital was far less mobile then, although it was indeed international. Today labor needs a new and unified internationale in order to fight capital everywhere simultaneously. Only then, like the heroes of our past, will they win back the fruits of their labor from the greedy hands of the upper classes.
Posted by: ReasonInRevolt | Jul 10, 2006 4:35:10 PM
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