Commentary
The color of job cuts in the auto industry
By Seth Sandronsky
Online Journal Contributing Writer


Feb 6, 2006, 15:33

Ford Motor Company announced in late January that it is cutting 30,000 jobs and closing 14 factories in North America over the next seven years. If the recent past is an indication of future employment trends in the U.S., the effects will be far-reaching on black autoworkers.

The share of employment in the domestic auto industry for the quarter-century ending 2004 fell 0.2 percentage points for Hispanics and whites compared with 0.8 percentage points for African-Americans, the Center for Economic and Policy Research reports. Layoffs have been four times more likely for black autoworkers during this period.

The report's authors are economist John Schmitt and research assistant Ben Zipperer of the CEPR. They analyzed data from the Current Population Survey by the U.S. Labor Dept.

Historically, employment in the U.S. car industry has been a ticket to a stable income with employer-provided health care and a retirement pension. The shorthand for this occupational status is a middle-class lifestyle.

For most people, most of the time, who have such work, they buy homes and send their children to colleges. If such jobs disappear, so will these life opportunities for them.

In the meantime, articles in the New York Times and Washington Post on Jan. 24 mentioned the elimination of auto employment by the Big Three (Ford, GM and DaimlerChrysler) in the Midwest and Northeast.

Meanwhile in the southern states of the U.S., auto companies owned by foreign interests have opened plants, with Nissan Motor Co. in Mississippi and Toyota Motor Corp. in Kentucky cases in point.

It is noteworthy that this shift within the car industry follows a familiar pattern of investors moving manufacturing employment to regions where U.S. workers are less likely to be represented by labor unions. Why?

A big part of the answer is lower wages, which translate to higher profits. The racial dimension of this trend is being borne disproportionately by African American autoworkers.