Surviving the Corporate Killers
A Michigan family's middle-class dreams slip away, victims of corporate downsizing.
Millington, Michigan
The last snowstorm of the season hit Michigan on the first day of spring. Micki Paquette heard the wailing of an ambulance, muffled by the snow. It wailed and wailed but didn't move on.
Micki found out later that a friend and neighbor, Bill Cable, had had a heart attack. But the ambulance couldn't make it to the hospital because the snow wasn't plowed.
Cable, a laid-off security guard, died. Back before the 1987 auto industry layoffs, central Michigan always had plenty of working people to pay the gas tax which financed the plowing.
Cable was under a lot of stress from being laid off for the five months before the heart attack. "I suspect that the layoff actually killed him. He and his family had just moved into their dream home," said Micki, a member of AFSCME Local 2635.
Micki's greatest fear is that her family might be next in line for a similar tragedy. Her husband Mike, 39, was one of the 35,000 GM workers laid off in nearby Flint. In Millington, 30 miles away, workers have left their homes. The boarded-up windows of local stores face vacant streets.
Roads and schools suffer. And there are fewer workers to pay the taxes that plow the roads.
Millington is hardly unique in America. The GM layoffs were simply one of the earliest in a series of corporate downsizings that have ended the American dream for millions.
Greed Rampage. Micki and Mike are facing the possibility that their children will not be better off than their parents.
In the last 20 years, the American worker has lost 19 percent of his or her income, when adjusting for inflation. But, of course, the economy has grown —about two percent a year. Where did that money go? Straight to the richest one percent of the population. In fact, during the 1980s, the corporate moguls and Wall Street barons gobbled up 64 percent of all of the growth, according to Massachusetts Institute of Technology (MIT) economist Lester Thurow.
Never before have American workers lost wages while the economy was growing. Pres. John F. Kennedy used to say, "a rising tide raises all boats." That was true in the 1960s. But today, Corporate America is on a greed rampage.
Corporate America got rich by "downsizing" workers like Mike. Some 600,000 were downsized in 1994 and again in 1995. Every indication is that this long line of layoffs will continue. (See time line at the foot of these pages.)
Corporate Citizenship. Things came to a head last January when AT&T laid off 77,800 employees. AT&T's CEO Robert Allen was called on the carpet as an example of what was wrong with America. Newsweek magazine placed Allen and other CEOs on its cover, calling them "Corporate Killers."
U.S. Sec. of Labor Robert Reich denounced these corporate abuses as he waved a copy of Newsweek at a meeting of the AFL-CIO Exec. Council that included AFSCME Pres. Gerald W. McEntee and Sec.-Treas. William Lucy.
Reich said, "As the President noted in his State of the Union address, employers must do their part—along with employees—sharing with workers the benefits of the good years, not just the burdens of the bad. It's time for a new corporate citizenship."
Meanwhile the Paquettes are stuck with the old one.
Their downward slide began when Mike was laid off from GM's Flint plant where he was a member of the United Auto Workers.
Now they survive on Mike's unemployment insurance and Micki's AFSCME job as a housekeeper at St. Joseph's Mercy Hospital in Flint.
Mike worked at St. Joseph's for a while, too, in a non-union job, earning 30 percent less than he had earned as an auto worker and with far fewer benefits.
Mike's story is typical of American workers who are downsized. Those who do find jobs take an average 31 percent drop in wages, according to MIT's Thurow. Some 17 percent of downsized workers are unemployed two years later—as was Mike. He was eventually laid off from St. Joseph's as well.
It was at St. Joseph's that the Paquettes met Bill Cable, the neighbor who died. They were fellow workers and became friends. For a while, it looked as though the Paquettes and the Cables might still fulfill their dreams. But Cable and Mike were laid off. Cable's dreams died when he did. The Paquettes' dreams died, too.
"When we first got married, we didn't have any money problems," said Micki, 40. "I had a dream. I wanted to open up a day care center, hire my daughters to help run it so that they could save for college."
The Paquettes tried to buy their dreams on credit. "The bills are piling up faster than we can pay them," said Micki, shaking her head. In 1993, American workers owed debts equivalent to 82 percent of their personal income. That's 17 percent more of their income than 14 years ago.
Mike said that when there was extra money, he spent it on lumber and tools to make their current house into their dream home. But for now, their dream home is nothing more than a crazy stack of boards in the back yard.
"We had to put this project on hold," said Mike, his eyes weary. His favorite hardware store—Handy Andy's—is going out of business since their main customers are laid-off auto workers (see cover photo).
Work Ethic. "We're almost at the panic stage," said Micki. "Like Handy Andy's, we might have to pack up and pull up stakes." Any local economy suffers when a huge plant like GM in Flint lays off its workers. Next to suffer is the tax base and then public services.
St. Joseph's Hospital, where Micki works, is a public hospital slated to be privatized next year. "So far management says it will respect the collective bargaining agreement," she said. "For now, there's been no downsizing."
But Mike has been laid off three times in two decades.
A recent U.S. Labor Department report says that in addition to the 7.7 million Americans counted as unemployed, some workers—like Mike—accept part-time jobs. Others become discouraged and cease looking. In January 1996, 4.6 million workers fell into these categories. Adding them to the official count raises the total number to 12.3 million.
These families make do with less. The Paquettes count themselves lucky not having to buy new clothes for their older daughters Jaime, 17, and Jessica, 14. They like the "grunge look." With a sigh, Micki said, "Thank goodness the kids are into the thrift stores. They say it's cool. So do I. It's cool to have one less bill."
Despite the hard times, Mike and Micki have instilled in their daughters a work ethic that they hope will one day pay off—even if Corporate America doesn't reward the efforts of working people. The Paquettes are proud of the fact that Jaime and Jessica spend their own money to buy clothes. Jaime works at McDonalds earning the minimum wage of $4.25 an hour and Jessica babysits.
Of course, neither of these jobs has benefits like health care. The number of Americans with health insurance has fallen from 69 to 61 percent between 1979 and 1989. Micki explained that already they have plunked down $6,000 to pay for dental surgery and braces for Jaime. But Jessica's dental care has been put off because they don't have the money.
There are other sacrifices. "My daughter Jessica's had to cut back on sports because the uniforms and physical exams cost so much."
But then there are sacrifices that put their futures in jeopardy. "We may have to cancel our life insurance which is scary," said Micki.
All these sacrifices taken together mean the Paquettes cut $15,000 from their yearly spending since Mike was downsized at GM.
"For most of my adult life, I've worked two jobs so that my family would have extra money," said Mike. Along the way, he turned down another auto factory job because it would have meant that the family must give up their land and property and move south.
The land was given to them by Micki's parents, who did well in life and are frustrated by watching their children slide into poverty. Moving south would mean never finishing their dream home.
"If I get another chance to work in the auto industry we'll simply have to go wherever the job sends us. Should Micki lose her job, there's nothing to keep us here," said Mike. Not his job. And certainly not his dream home.
