Here's another entry in the "company going to America for cheap labor" category for you: Iconic heavy machinery manufacturer Caterpillar bought a plant in Canada just two years ago—and now it's planning to move those jobs to Indiana unless Canadian workers will agree to massive concessions. Massive like a 50 percent pay cut, giving up their pension, and more, and Caterpillar has locked the workers out to drive home how serious it is about this, as Huffington Post's Lila Shapiro reports.
Caterpillar isn't suffering financially; in fact, it's been profitable consistently over the past five years and profits spiked over and above that in late 2011. And it's not that the Canadian workers of whom Caterpillar is demanding a 50 percent pay cut make outrageously much money. It's that the Muncie, Indiana workers earn so little: $24,000, below the median income in the U.S. and just above the 2010 poverty threshold for a family of four. Shapiro points out that:
The situation at Caterpillar illustrates an emerging problem with the nascent economic recovery: While corporations are rebounding from the depths of the recession, working Americans aren't. Corporate profits are at their highest level in decades while worker compensation is at a relative 50-year low. Much hope has been placed in the rebound of North American manufacturing, but while the industry has added some 334,000 positions in the past two years, many of the new jobs don't pay the old middle class wages. [...]
"It's a fundamental problem: Now we have a situation where there's not enough purchasing power in the American economy to feed this recovery," said Thomas Kochan, a management expert at the Massachusetts Institute of Technology.
"It's not all bad," he continued, pointing to companies like General Electric, which have slashed wages while profits were strong in return for continued investment in the United States and the promise of more jobs. Other companies must cut wages to stay alive, such as the auto makers, which pay new workers nearly half what starting employees made before the crash.
"But if it's just companies slashing wages because they've got the power to do so, then it's dysfunctional," Kochan said.
Standards may vary on what constitutes "companies slashing wages because they've got the power to do so" rather than because they need to; I suspect that MIT management expert Kochan and I locate that at rather different starting points. But there seems to be no question that Caterpillar falls into this "dysfunctional" category. Other words that might be applied include "abusive" and "evil."