TWO AMERICAS

When the American auto industry collapsed and came crawling to Washington for handouts in 2008, major restructuring was a precondition for receiving billions in tax dollars. Cutting labor and legacy costs was a priority (shockingly) and GM management presented the United Auto Workers with two alternative scenarios. In one the UAW could maintain its current wage/benefit structure but face the loss of large numbers of U.S. jobs – in other words, better jobs but fewer of them. In the other, existing jobs would be maintained but at lower compensation. Both choices are undesirable. If only there was a way to obtain the best of both worlds, to satisfy existing members while allowing management to cut labor costs.

Thus for the first time in its 70+ year history the UAW agreed to a contract with tiered wages. Tier 1 employees were those employed at the time the contract was signed; they were essentially grandfathered into the wage/benefit package in place at the time of their hire. Tier 2 employees were those hired from that point forward; they received considerably lower wages and minimal benefits. The UAW had previously resisted this scheme for obvious reasons. It's hard to build solidarity when a clear caste system is created in the workforce wherein one guy makes $28/hour and the guy next to him doing the same job makes $13.50/hour. I mean, what could go wrong? Yet the UAW and other unions have been accepting more and more contracts with tiered wages under the threat of losing jobs to sad, low wage hellholes like rural Mexico, Indonesia, or Oklahoma. From the employers' perspective, the beauty is that eventually every Tier 1 employee retires, dies, or quits and the whole workforce is ever-so-slowly transitioned to lower wages without incurring the costs of moving factories or pissing off the existing labor force.

The manufacturing sector is hardly alone. Academia is increasingly divided among secure, well compensated tenured or tenure-track faculty and at-will adjunct or other temporary employees who make 1/3 the salary with no benefits. As tenured faculty retire, of course, they are replaced by the cheaper alternative. My father, a career civil servant, is among the employees of the State of Illinois grandfathered into a generous pension system (although changes have been made to it as well) while all subsequent new hires will receive a much cheaper benefit package with hard caps. The entire business world now runs offices in which older, salaried employees with benefits work alongside temps – including the baffling "permanent temp" – supplied by outside contractors.

Unsurprisingly, GOP budget whiz (*cough*) Paul Ryan's proposal to put Social Security and Medicare – primarily the latter – on the chopping block takes a similar approach. While proposing enormous cuts in benefits, the politically savvy GOP leadership takes great care to exclude anyone currently over the age of 55. And why not? We know that the entire political system is focused on the needs and wants of the Boomers and more specifically the elderly, who vote and complain far more reliably than younger Americans. Besides, those of us under 40 have long since accepted the reality that we will be the first generation that won't "do better" than its parents. Twenty- and thirtysomethings understand how the deck has been stacked; we work to pay for the lifestyle of our elders with the explicit promise that nothing we see ahead of us will ever be ours. The political mantra is "Austerity for thee, not for me."

When John Edwards talked about the "two Americas" in the 2004 and 2008 elections he meant a rich one and a poor one. It is hard to dispute the validity of that argument. Increasingly, however, we are a society bifurcated by age and generation. Those born before 1960 will go cradle-to-grave with the benefits of the New Deal: a social safety net, job security, pensions / benefits, and good wages. Anyone unfortunate enough to be born since then – especially Carter babies and beyond – will have an entirely different standard of living.

It feels great to know that the 55-and-under set is carrying the burden of paying for the existing standard of living of our predecessors even though we'll never reach the Promised Land ourselves. It's like making 20-30 years of monthly payments for a shiny new Ferrari and being rewarded with the keys to a fire-damaged 1977 Ford Ranchero.

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48 Responses to “TWO AMERICAS”

  1. wetcasements Says:

    And to top it all off, it's the most vulnerable Americans (low wage, low or no advanced education) who are generally cheerleading the Teabag movement. Because I'll be damned if my kid's school teacher makes 40K/year and gets a benefits package (these days more than likely a 401K rather than an actual pension), I'm only making ten bucks an hour with no health insurance! The only way to rectify this is to destroy the middle class that I long ago gave up on joining myself.

    America is really turning into bizarro-land.

  2. hackenbush Says:

    @wetcasements: I've always said that "movements" like the teabaggers can be explained through a combination of malice and ignorance. Ignorance (such as responding to the selling of simple messages exclusively, or that they're pretty crazy, or their faux populism) and malice (which is pretty much the basis for libertarianism) explain away the entire "movement". There's nothing bizarre about being selfish and ignorant. We're Americans — and damn good at it, apparently.

  3. Major Kong Says:

    The airlines tried this years ago with the A-Scale/B-Scale pay system. They wanted to cut salaries but not alienate their existing crew force they came up with a "B Scale" pay rate that would only apply to people hired after that date.

    It was a terrible idea and I don't think anybody in the industry has a B-Scale any more.

  4. anotherbozo Says:

    The key point made here for me is that "you kids" (Carter babies and younger) don't vote reliably, and us AARP cocksuckers do. When are younger Americans going to wake up, I wonder. There would be no tea party, the only real contest would be between presidential hopefuls Bernie Sanders and Dennis Kucinich, and the Koch brothers and Mellon Scaife would be merely bad jokes, since campaign finance reform would have been put in place and pols wouldn't have to constantly beg for money from whoever has it.

    As Michael Moore states quite correctly, in our sentiments we are a liberal nation.

    If not still true, at one point young Brits could go from school directly to "the Dole," without every having held a job. I always thought it was because blue-collar workers their voted their interests, young voters with them. Tell me I'm wrong.

    And if only there were 20,000 Eds here, teaching civic responsibility, trying to wake up the Snooki generation.

    I can corroborate the part about part-time faculty. I once replaced a department chairman (at a fraction of this salary), who was on leave. I left, and he never returned. The department was always relatively small and dependent on friends in other areas. Ten years later it consisted entirely of part-timers. A lesson in power.

    Now for my second cup of coffee.

  5. acer Says:

    @bozo:
    Nicely put.

    Let's not be too hard on the boomers, though. If it weren't for those montages of '60s stock footage with wah-wah guitar soundtracks, the ad industry would be broke, too.

  6. Fearguth Says:

    Where do we pre-Baby-Boomers fit in? Or, do we?

  7. displaced Capitalist Says:

    I think this also explains the phenomenon that boomers are always telling me that I should buy a house.

    They don't seem to understand that there is a housing crisis going on
    They don't seem to understand that I have no safety-net like they did
    They don't seem to understand why both my spouse and I have to work full time

    So they continue to vote for the politicians who will strip me of any protections because those same politicians are still kissing up to that generation. .. And as Bozo put it, my generation is too busy wondering about the results of Dancing with the Stars to bother voting. :(

  8. Kulkuri Says:

    The airlines tried this years ago with the A-Scale/B-Scale pay system. They wanted to cut salaries but not alienate their existing crew force they came up with a "B Scale" pay rate that would only apply to people hired after that date.
    Thanks to St. Ronnie's deregulation, the airlines with unions came up with the two-tier system to compete with the low-budget airlines, or so they claimed. It was hard to compete with $99 coast to coast fares. After the two-tier system was put in place, I lost any interest in working for the airlines.

    When I was studying to get my FAA license, I had an instructor who said forget about the I love aviation as a reason to work aircraft, say instead I love to eat. Too bad there's so many that never heard that advice and wouldn't follow it if they did head it.

  9. The Moar You Know Says:

    Just found out this morning that there is no longer a $2800 exemption for taxes on unemployment benefits – something that came along with the bill to extend Bush's tax cuts.

    This country has gone absolutely insane.

  10. mojidoji Says:

    Unfortuantely, we're gutting benefits as though the boomer phenomenon is permanent. By the time we get to the point that SS is supposed to be running out of money, the boomer population will be shrinking quickly, but I doubt we'll get the benefits back, unless we can drop the false belief that whatever money one has was "earned" and that taxes are "my money".

    I've always thought that Americans can only stand so much misery, but it doesn't seem that the residents of the misery states (TX, LA, GA, etc) are getting any less gung-ho about how things are going there.

  11. Middle Seaman Says:

    Disclosure: I am an older boomer and I will do fine when I retire mainly because of my pension funds I contributed to in previous decades.

    Most of the post is factually correct with some exceptions. Some countries in Europe, e.g. Germany, still maintain the old system. The most incorrect assumption is that you the under 40 will pay my retirement. That is arithmetically incorrect. I have have put into social security way more money than I'll get back. (Unless I live to be 100, which medically will not happen in my case.) Or in a way, I'll be paying for your retirement.

    The main, and major, misconception is that you take the generational division for granted and even buy into Paul Ryan's abusive financial solution. Most of the "good" money went and still goes to the 1% richest people in the country. Those who produce nothing, pay no taxes, are above the law and those who abuse the rest 99%.

    If we insist, through vote and organizing and daily fighting, that they fork back the stolen money, that the financial sector (or 40% of our economy) shrinks back to 4% where it should be, that they go to jail like the arm robbers they are, then below 55 people will have a chance for a decent life now and after retirement.

  12. Monkey Business Says:

    We need a Liberal Revolution in this country. We need everyone the rich and the Boomers are screwing over to rise up and cast them down from whence they came.

    Fuck me? Fuck you.
    Fuck this country and every one in it.
    Fuck the Tea Party, in all their ignorance and racism.
    Fuck the GOP, pandering for votes by appealing to the lowest common denominator.
    Fuck the Democrats, for being spineless and gutless in the face of such evil.
    Fuck Fox News, for destroying whatever journalistic integrity might have been left on cable TV.
    Fuck Wall Street, for figuring out new ways to screw hard-working Americans out of their hard-earned cash.
    Fuck the captains of industry, for raking in record compensation while the rest us struggle to get by.
    Fuck the Boomers, for screwing over their parents and their kids for themselves.
    Fuck the young, for never figuring that you don't matter if you don't vote.
    Fuck the church, for delivering us into evil.
    Fuck this country and everyone in it, from sea to shining sea. Let the earth swallow it, the fires burn it down, the waters rise up and submerge it.
    No, fuck us all, for having everything and throwing it away.

  13. Edward Says:

    The main threat to social security is supposed to be the rising cost of health care. Reigning in these costs– with a single payer system, for example, would go a long way toward resolving this problem.

  14. cromartie Says:

    Ultimately, every generation sells out the ones after it and cuts the best deal for their golden years. It's just that the Boomers are being sanctimonious about it, and there are a lot of them.

  15. Dick Nixon Says:

    This is class warfare at it's finest–take the public vs. private sector battle now raging:
    '
    1) underfund, raid, and abrogate resposibility for employee pensions in the private sector
    2) offer 401K' with variable or no match
    3) accuse the public sector of being 'pampered' because they have viable non-contributory pension plans.
    4) reduce public pensions and offer a 401K –viola!

    Continue with:

    1) Convince the public that Social Security is terribly underfunded (it's not)
    2) Follow by assuring the younger generation that "social security won't be there for you"
    3) Proceed to leverage the divide between the "haves" and the "have nots"
    4) Gut social security on a generational basis.

    You have to appreciate, at least technically, the devil's work going on in todays' GOP.

  16. anotherbozo Says:

    @monkey business: good rant. epic, even.

    wonder if this'll be the first empire in history to be fully aware of its own self-destruction–as it happens. and not just a few scolds, in this case, but at least hundreds of thousands of us are watching it happen. and not a damn thing we can do to reverse it, or even slow it down.

    so it seems.

  17. acer Says:

    @bozo:
    The mutant roaches of 2525 will read Kunstler the way we read the Decline and Fall of the Roman Empire. Or something like that.

  18. butler Says:

    Per Middle Seaman this:

    "Twenty- and thirtysomethings understand how the deck has been stacked; we work to pay for the lifestyle of our elders with the explicit promise that nothing we see ahead of us will ever be ours."

    … does seem to play right into the divide-and-conquer idea that the right have been having such success with: if the system is screwing someone else worse than you, blame that someone else, not the system.

    These attacks on SS are de facto attacks on the elderly we will all eventually be.

  19. Tosh Says:

    What Middle Seamon said.

  20. Andrew Says:

    Reply to @The Moar You Know: Why should there be a tax exemption for unemployment benefits? They're designed to replace wages, and wages are fully taxable. The fact that they're generally lower than wages mean that you'll already pay less taxes when receiving them than when receiving wages. And in California at least, the state doesn't tax them, so there's a 10% break right there.

    I'm all for the common person, but a tax exemption on unemployment insurance doesn't make sense. I'd prefer a system in which all income was taxed at the same rate (a sharply progressive rate) regardless of source.

  21. DocAmazing Says:

    GOP budget whiz (*cough*) Paul Ryan

    That's "whiz" as in "to take a", correct?

  22. grendelkhan Says:

    displaced Capitalist: I think this also explains the phenomenon that boomers are always telling me that I should buy a house.

    And, indeed, the "work hard and apply yourself" bullshit as well. Back in the Boomers' day, it was actually possible to work your way through college at a private school. It is now barely possible to work your way through community college, if you're lucky enough to find a minimum-wage place that'll give you good hours.

    Boomers are still living in the world they grew up in. Those of us who came after are not. It's that simple.

  23. Rob McCaarthy Says:

    Please understand who our enemies truly are. It is not boomers against GenX; or older workers against younger workers; or public employees and private sector employees; etc.. Our true enemies, the capitalist thugs whom Paul Ryan and his ilk front for, love nothing more than to see the groups they plan to dispoil fighting each other, blaming each other, while they sit back and suck the life from all of us.

  24. Don Says:

    The generational blame thing isn't really going to get us anywhere, is it? Old people aren't gutting social security and medicare. Rich people are. I'm 56, and oddly enough I remember looking up from my crappy job sometime long before I was 40 to "accept" the very same reality: me and my age group weren't going to be doing better than – or even remotely as well as – our parents.

    When my dad was my age he had already taken his government retirement after supporting 6 people on a single income (and putting 3 of them through college while incurring no debt), and had built a house where he and my mom lived in middle-class security for another 25 years. My expected social security, if I retire at 67, will just about cover the rent I pay now. My 401K might allow me to supplement that for about 4 years in considerably reduced circumstances, unless it all goes to drug copays keeping the children of pharmaceutical executives in private schools and Swiss vacations. (Republicans aren't known for stopping at the first cut; I may be in under the medicare wire today, but that hardly feels secure with these thugs around.) After that I guess I can show the young people how it's done and move into a refrigerator box, or just kill myself.

    You still like my Ferrari?

  25. Steve Says:

    @Rob McCaarthy:

    Thank you for your comment. I'm a boomer. I did less well than my parents, and I think that's true of a lot of my generation. My children are doing less well than I am. The only possible correction is for the entire country to rise up against the Kochs, the Goldman Sachses, the GEs, the congressional thieves, and yes, the Obamas (oh, and don't forget the teabag halfwits). It won't happen, so we are doomed.

  26. TomO Says:

    I'm a boomer (62) and I agree with what Don said. I lost most of my 20 years of retirement contributions to a Halliburton plan that somehow always went down, and the Savings & Loan scam. Social Security is about all I can look forward to.

    I'm surprised that no one has noted another big difference between the 40ish and the 60ish. In the 60's & 70's we raised a lot of hell and got some attention. We learned how to vote regularly, and that voting as a block can get things done. The next generation entering their 20s during the 80's and 90's? Not so much.

  27. Amanda Says:

    It may be rich against poor, but the people who are going to receive the benefits over others aren't exactly lining up to protest that the generations coming after them are screwed and that something should be done. Just because people aren't on the front lines of this fight doesn't mean they aren't complicit in its action. It seems as though the 55+ population is happy to give their votes and sit back to watch Fox News because they are taken care of and that's what matters. (That is a rash generalization, so please don't come back with your own personal stories of how you aren't that. I know the 55+ population is to a degree diverse in nature.)

    I'm no political scientist but it seems to me that while it might be a class war, there is a large amount of generational apathy across the board helping that war along from youth failing to vote to the 55+ crowd voting for their own interests. We are all involved in the progression of this problem.

  28. Da Moose Says:

    I had an interview today with an arrogant 50 something SoB from the State Department who is now working as a private consultant. We got around to discussing the state of things in the US and abroad. His response, "Well, hopefully I'll be out cruising around on my water plane somewhere in the Caribbean when the stuff hits the fan here." It took every ounce of energy in me to not reach across the table to administer a larger than life pimp slap. I fucking hate some of these boomers. They are some of the most self-absorbed cocksuckers….Guess what, when the stuff hits the fan here, you better hope those gated communities have machine gun turrets too, assholes.

  29. Da Moose Says:

    http://www.salon.com/news/the_labor_movement/index.html?story=/politics/war_room/2011/04/04/winant_labor_new_haven

    "But as universities rebuild the new economy, the new economy rebuilds them too, from the inside out. Across Europe and the United States, institutions of higher education are increasingly reliant on casual academic labor — job-insecure, overworked, underpaid adjunct professors. We graduate students, meanwhile, at research institutions like Yale, are in positions of extraordinary privilege. The resources we have available to do new and exciting work are immense; Yale continues to educate its students as well as any institution in the country, and to turn out exciting research across academic disciplines. But even graduate students feel the pinch of the new economy. Increasingly, universities are run like businesses, and are squeezing Ph.D. programs to produce faster work — that is, worse work — in fields like history, philosophy and literature, which don’t turn a buck."

  30. ladiesbane Says:

    @Don: but a lot of the old, poor people are voting for the rich people who are gutting their benefits. Some may earnestly be trying to tighten belts (and may not be able to conceive of cutting Defense, ever,) but what is triggering the rest of them? Watch Newt and the right wing "sponsors" shepherd more fear and anger toward the Left.

    There are still a lot of people so worked up about the President's melanin and middle name that they think he has tried to take away their guns, institute Socialism and Sharia law, and activate "death panels". They are perfectly willing to shoot themselves in the drug copay to make sure he doesn't succeed.

  31. Elder Futhark Says:

    The solution is so simple. Kill everyone over 40. Problem solved.

    "Run, Logan, run!"

  32. Don Says:

    @ladiesbane – yes, a lot of old people have been successfully duped into voting against their own interests. And a lot of young people have been duped into believing that voting is boring and inconsequential. Which one's worse in the longer term? (Hint – old people are mostly going to die sooner.)

    As a side note I am old enough to vividly remember the horror of enthusiastic Reaganites who were younger than me. Like, LOTS OF THEM. At that time it felt like young people were screwing everything up with their votes, instead of (as is the case now, if I want to blame millions of people en masse) screwing everything up withholding their votes.

    A common complaint here is that old people vote for their own interests (that is, when they're not voting against them). A second common complaint is that young people aren't voting … for their own interests. Maybe the solution is to get young people to vote, rather than condemning old people for not doing it for them.

  33. Chris Says:

    The only thing the older generation has done was exist between the end of WWII and the start of globalization. They simply popped out of the womb at the right time and enjoyed American economic prosperity at its best. However, popping out of a womb didn't create the mess we are in: it is the economic and political elites that decided a race to the bottom was in everybody's best interest. It is us (Middle class and lower) versus them (the wealthy), and they fucked us over big time.

    In order to rebuild America, we are going to actually have to do something (unlike the older generation).

    Also, spare me the "voting prowess" of the young during the 60's and 70's. You guys couldn't even beat Nixon. Hell, McGovern got one of the biggest ass-reamings in the history of American politics.

  34. Sarah Says:

    Young people believe that voting is boring, inconsequential and *uncool*–something old people do and therefore something that they don't want to be caught dead doing. This attitude has been around since at least the 80s when I was coming up. Never having been cool by any of the usually accepted definitions of the word, I read a lot of books starting in grammar school, I kept up with current events starting in junior high, I pre-registered to vote at 17 and got my registration promptly after turning 18, and believe me I caught a lot of heat from my peers for it.

    The problem is not just that young people don't vote. Even if they did vote, they don't have enough awareness of the issues to know what the hell they're voting for.

  35. ladiesbane Says:

    @Don: I don't condemn the old for voting the way they do. Like most people, they do what they think is best, and follow those they trust. Likewise, I don't really condemn kids for not voting. We have completely sold them on hopelessness and offered them very little education, guidance, or leadership. Uneducated voters scare me more than ignorant non-voters.

  36. mother earth Says:

    I think you guys are pissed at the wrong generation. @Don gets it exactly right. It was the greatest generation that got it all. They got GI loans to go back to college and purchase the first home. They lived comfortable middle class lives on one income. They retired with health insurance and pensions. The only boomers getting anything near that deal will be in the ones in the top 1%. And what's up complaining about boomers voting for their own interests? What moron is bothering to vote and voting against their beliefs or interests? Full disclosure – I too am a cocksucking boomer.

  37. Zeb Says:

    @mother earth

    The "greatest generation" also had to, you know, fight World War II and Korea, and survive the Great Depression. Also, their conservatives were Liberals compared to today's bunch–hell, Eisenhower was a goddamn commie compared to the loons on the right side of the aisle now.

    The sad thing is, the younger you are, the worse off your demographic is. Kids today will get to go to fine, corporatized schools lacking teachers with tenure who are forced to drill them incessantly with multiple choice questions while being paid minimum wage–how do you think that will fare for those students?

  38. butler Says:

    The dimwitted age baiting, stereotyping, generalization, on this thread are making me feel truly hopeless. After all the discussion on this blog of who is really running the shell game, are we who read this blog really willing to throw our money down?

    Fucking pathetic.

  39. hackenbush Says:

    For all those claiming "age-baiting", read this:

    http://www.samefacts.com/2010/08/education-policy/a-letter-to-my-students/

    The greed of the "boomer" generation isn't restricted to the top 1%. They effectively lived "high on the hog" while burning everything to the ground behind them. They didn't "happen to live at the start of globalization" — they helped implement it.

  40. Kulkuri Says:

    To all those that see nothing wrong with taxing unemployment, There never was a tax on 'unemployment insurance' or any other insurance payout (which is what unemployment is, an insurance payout) until St. Ronnie of Reagan started taxing unemployment in the 80s. I guess part of the problem is it's called unemployment benefits now when it used to be referred to as unemployment insurance. See how quickly the public forgets!!!

    @mojidoji, thanks for reminding me and others that the "boomer" thing is a bulge in the system and will move through like the bulge of a rat through a python.

  41. a Says:

    What would it take to make voting compusory in the United States?

    I bet we'd hear a hell of a lot less bitching if everyone had to vote.

  42. Joe Btfsplk Says:

    What I see here in the comments is that divide and conquer does indeed work.

    Divide the collected middle/lower class population into two groups. Screw group A, then point out to them that Group B hasn't been screwed. So now Group A wants Group B to get screwed, too. After all, Group B is the problem!

    Wrong, wrong, wrong.

    Figure out who has been implementing this strategy for the past 30 years. That is your enemy. Go after them. Stop falling prey to this strategy; you are only demonstrating its efficacy and encouraging more of the same…until we are all Group A.

  43. Me Says:

    Looks like Ryan's divide and conquer plan is already working with you.

    Why are you falling for the bait?

  44. Joe Blow Says:

    make it 53 and its a deal!! then I can ignore the problem.

  45. Mayya Says:

    Here is an "infographic" about tenure you might enjoy. The website as a whole is fascinating.
    http://thesocietypages.org/graphicsociology/2010/12/22/tenure-is-dying/

  46. Aoirthoir Says:

    This post is INCREDIBLY ageist. You realize of course that a great majority of the Boomer generation, like every other generation, exist without any class privilege? It is very easy to say that they're all well off. There are many without any sort of income.

    If you are going to direct your comments to the Boomers, PLEASE CLARIFY that it applies to the boomers that had class privilege.

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