Tag Archives: The Grand Rapids Press

On Sunday, the Grand Rapids Press ran a front-page story about what people make in West Michigan. The story was prompted by a similar themed story that was featured in the weekly insert publication called Parade Magazine, which also explore what people earn around the country, with an emphasis on what entertainment celebrities make. It is important to note that the same company that owns the Grand Rapids Press—Advance Publications–owns Parade Magazine.

The Grand Rapids Press story is typical in how mainstream media tends to cover economic issues and particularly wage and salary issues. They generally use vague data and rely on “experts” to “help” readers understand why wages are the way they are. The first expert cited is a professor from the Grand Valley State University’s (GVSU) Seidman College of Business, Paul Isely. Isely claims that West Michigan isn’t growing as fast as the rest of the country even though he provides no evidence to support this claim. The second “expert” cited in the Press article is one of the most frequently used by the newspaper on economic issues, George Erickcek, who is the senior analyst for Upjohn Institute for Employment Research in Kalamazoo. Erickcek’s major contention is “West Michigan never became strongly unionized, and much of Michigan’s wage growth was in union shops.” Erickcek claims that is why wages are lower now in West Michigan. Unfortunately for readers, there are no organized labor voices to counter his claims, even though the article states early on that government employees in West Michigan on average have seen a significant increase in wages. It should also be noted that most government employees are unionized as part of AFSCME, the American Federation of State, County and Municipal Employees, and maybe being unionized is why these workers have better wages.

Professor Isely then is quoted saying as productivity improved elsewhere, “many jobs went away.” This is code for “jobs were sent elsewhere because companies could pay a lower wage elsewhere.” This shift in jobs was sometimes facilitated by trade policies such as NAFTA and CAFTA. According to the Economic Policy Institute, Michigan lost 63,000 jobs due to NAFTA. However, the Upjohn Institute “expert” Erickcek decides that blaming working people for not finding well paying jobs is easier than looking at corporate practices. Erickcek believes the problem lies with working people when he says, “We still have people thinking they can get good jobs with a high-school education and, increasingly, that’s not the case.”

The article does manage to cite a few working people who are frustrated with the cost of living and cost of gas. However, their voices are marginal compared to the ongoing commentary of the economic experts. This type of reporting is consistent with what we have documented in the past when it comes to economic issues. While the story covers increases in gas prices cited by interviewed workers, it only provides data on how much gas prices have gone up and ignores the record profits of the oil industry. (http://www.citizen.org/cmep/energy_enviro_nuclear/articles.cfm?ID=13912)

This story in the Grand Rapids Press once again demonstrates a clear bias in reporting that favors the business community over working people.

Full Grand Rapids Press Story

Local wage race brings lots of pain, little gain

Is your paycheck showing stretch marks?

Not surprising.

Average weekly wages for private-sector jobs in West Michigan are well below national and state averages.

And the gap is widening.

Private wages averaged $633 a week in Kent County in 2001, about 5 percent below the national average.

By 2007, the local number was $732, nearly 10 percent below the national

average.

The disparity is greater for Ottawa County, going from about 11 percent to almost 16 percent below the average, according to federal Bureau of Labor statistics.

“The rest of the country is still growing faster than we are, and inflation is eating most of that away for us,” said Paul Isely, associate professor of economics in the Seidman College of Business at Grand Valley State University.

Life is a lot better, though, for government employees.

State, local and federal workers in the Grand Rapids area have seen increases roughly twice that of the private sector.

In Kent County, local government employees — anyone from teachers to street sweepers, police to city administrators — have seen average pay jump 29 percent since 2001.

Federal employees working in Grand Rapids received a 40 percent hike during the same period.

And private-sector workers: 15.6 percent — less than the inflation rate.

The cost of living in West Michigan is up 17.4 percent from 2001 to 2007.

Facing tough decisions

So while government employees are ahead of the game, the treadmill is moving faster for the 90 percent of workers in the private sector: They’re falling behind, if not falling off.

“Our income didn’t go up anywhere near as much as inflation,” economist Isely said, “and, for some particular things, it’s even worse.”

That’s not news to Stephanie Springfield, of Cedar Springs.

“Some weeks are tough,” said Springfield, 35. “Especially with the costs of home heating oil, fuel costs in the winter months are a little tougher.”

Jeff McCoy, an architectural draftsman from Muskegon, commutes daily to Grand Rapids.

“Gas is killing me,” said McCoy, 52. “I commute a long way, and the general cost of everything is a lot more than 10 years ago. Living expenses in general are chewing up every bit of extra money I have.”

Isely said big jumps in basic goods are forcing tough decisions about what we spend.

After gasoline spiked 20 percent from 2005 to 2006, it rose another 4 percent by April 2007 and more than 6 percent since then, he said.

Bread went up 12 percent from April 2006 to April 2007, and another 10 percent since.

Of course, averages always have an up for each down.

David Syrba, 45, of Walker, an installer for Vos Glass, is on the up side, thanks to the big construction projects on the Michigan Street Hill.

“I’m making as much money as I ever have,” Syrba said.

Overall, however, Isely said this is the bottom line: “The rest of the country is keeping up with inflation, and we’re not.”

Why is that?

First, West Michigan historically had lower pay levels, explained George Erickcek, senior analyst for Upjohn Institute for Employment Research in Kalamazoo.

West Michigan never became strongly unionized, and much of Michigan’s wage growth was in union shops.

As a result, wages here were slower to increase, he said.

But within that limit — and counter to conventional economics in which higher education produces higher pay — jobs in the region paid relatively well for lower education levels, Isely explained, thanks to high productivity and high-value products. Local office-furniture jobs were one example.

But as productivity improved elsewhere, many jobs went away.

That leaves West Michigan with a problem: a work force accustomed to well-paying jobs without a higher education.

“We still have people thinking they can get good jobs with a high-school education and, increasingly, that’s not the case,” Erickcek said.

A recent study showed an “outrageous number of parents didn’t think college is necessary,” he said. And 2006 Census reports show West Michigan behind the state and nation in attaining higher education.

Noting the work of economist Lou Glazer, about how income potential is tied to education achievement, Erickcek added, “West Michigan is at a disadvantage. So it is no surprise because of that, that wages are growing slower.”

A second factor in slower wage growth, he said, is the trend of people with higher education seeking jobs in larger urban centers.

Then, consider that people who have lost manufacturing and other jobs are out looking for work, and wages stagnate, Isely pointed out.

“There’s not a lot of upward wage pressure right now in Michigan.”

Grand Rapids on top

That said, both economists see some light.

Of West Michigan communities, Erickcek said, Grand Rapids is probably best-suited to retain college-educated professionals.

And Isely said Grand Rapids’ job picture has actually improved some and leveled out since 2003 — while the rest of the state has yet to bottom out.

“We’ve replaced the majority of jobs we lost,” he said.

The best news: “For every four jobs we’ve lost in manufacturing, we’ve gained three jobs in health care and education,” Isely said. And those 15,000 replacement jobs pay almost as much as manufacturing.

Compare that to the Detroit area, which is down 240,000 jobs — out of the state’s decline of 300,000.

The job gains in that area? Only 4,500 spots in the leisure and hospitality industry, the casino business.

“And those jobs pay a lot less,” Isely said.

Analysis:

First, how does the headline, “Is NAFTA not so bad for us?,” set up the reader for what the story is about? Nowhere is the story does the reporter actually explain what the North American Free Trade Agreement (NAFTA ) is nor who it means when they use the word “us.” The second sentence gives readers the impression that Senator’s Barak Obama and Hillary Clinton are “hammer(ing) the trade pact for its lack of environmental and worker safety standards.” The reporter never verifies that the two Democratic Presidential candidates are actually making critical comments about NAFTA, even though the group Fact Check has critiqued this idea with regard to their recent debate in Cleveland. The third sentence quotes Governor Granholm saying that NAFTA and CAFTA was bad for Michigan at a rally last year. Again the reporter does not provide any details of why Granholm would make such a comment, nor whether or not her administration took an active role in trying to defeat the Central America Free Trade Agreement (CAFTA) when the US Congress voted in favor of it in 2005. The story also never explains CAFTA.

The bulk of the article provides readers with five perspectives–four that are in favor of NAFTA and one that is opposed. The four in favor of NAFTA are Tom Maguire with the US Department of Commerce, Craig Meurlin, chairman of the Michigan District Export Council West, and representatives from Steelcase and Herman Miller Inc. The two business representatives simply say that NAFTA has been profitable for them. Craig Meurlin of the Michigan District Export Council West said, “Conditions for some Mexican workers and their plants’ environment are improving because socially conscious corporations are demanding it.” Again, the reporter never verifies such a claim.

Sue Levy, with the UAW, is the only anti-NAFTA perspective presented. The quotes the Press used present little evidence of how this trade agreement has been negative, particularly for workers. At one point, Levy says that the UAW supported the recent Peru Trade Agreement because “had environmental and labor standards.” Again, there are is no verification of this claim. There are no workers who lost jobs due to NAFTA in this story, nor the perspective of people and organizations who have actively campaigned in West Michigan against both NAFTA and CAFTA.

Story:

For some West Michigan workers, NAFTA is a four-letter acronym.

The 15-year-old North American Free Trade Agreement is getting lots of ink this week, as Democratic candidates Hillary Clinton and Barack Obama hammer the trade pact for its lack of environmental and worker safety standards.

And last year, Gov. Jennifer Granholm told a rally, “NAFTA and CAFTA have given us the SHAFTA!”

So, just how evil is the pact that opened the markets of Canada and Mexico to West Michigan manufacturers?

Depends on your vision.

“There are always winners and losers in any trade agreement,” said Tom Maguire, of the U.S. Department of Commerce. From his angle, the deal was a good one.

“I think the NAFTA agreement has been very good in spite of what you and I hear,” Maguire said.

Greenville hit hardest

But it is not without pain as the region faces the equivalent of another industrial revolution.

The coldest cut came in 2005, when Electrolux abandoned Greenville for a Mexico border town, leaving 2,700 West Michigan workers in the dust.

“NAFTA began it. We see nothing good about it,” said Sue Levy, of United Auto Workers Region 1-D. “It’s been used as a way to eliminate manufacturing jobs in the U.S. for low wages and no environmental protections.

“Electrolux is a perfect example,” she said. “It was a money-making factory. It’s just a matter of greed.”

UAW wants labor standards

Not all trade agreements are equal, in the eyes of the union.

“The UAW just supported the Peru Trade Agreement,” Levy said. “It had environmental and labor standards. Some people say, ‘No trade,’ but the UAW is not saying that.

“We’re saying agreements have to have those standards; they have to be enforceable.”

Conditions for some Mexican workers and their plants’ environment are improving because socially conscious corporations are demanding it, said Craig Meurlin, chairman of the Michigan District Export Council West.

His worldview matches Maguire’s: “NAFTA generally is a good thing.”

Meurlin acknowledges the painful losses hitting Michigan factory workers, describing the Electrolux shutdown as an “unfortunate reality.”

“Michigan is doing particularly badly economically, but in some sense, I would argue that is not because of free trade,” he said.

The pressures are global and are testing the region’s ability to embrace change.

“That (Electrolux) job went to Mexico, but that job probably was going to go somewhere anyway, because of the labor costs involved,” Meurlin said. “The only question was: where?”

Grand Rapids has benefited

NAFTA actually is helping preserve jobs in Grand Rapids, said Renee Goetzinger, import/export manager for Steelcase Inc.

Last year, 13,000 Steelcase products qualified for duty-free NAFTA status.

“We saved millions of dollars in duty savings,” Goetzinger told a gathering of export planners Friday. “NAFTA is the No. 1 free trade area we participate in. There were 30 percent duties in Mexico. We would not be cost-competitive unless we were NAFTA-certified.”

Without the free trade relationship, companies such as Steelcase would be pressed to shift more production to Mexico or Canada, to sell products there more easily.

Herman Miller Inc. has a similar upbeat view of NAFTA.

“Unequivocally, it’s been a positive for our business and for our employees,” spokesman Mark Shurman said. “We don’t produce in either market. We ship to both markets, and our sales have been better.”

Other sectors are likely to take a bigger hit, Shurman said.

“Across West Michigan, I think it’s going to vary by company and by nature of the individual business,” he said.

Across the vast Amway global network, free trade agreements saved the corporation more than $7 million in duties, according to Bob King, manager of import/export customs compliance for Amway’s Access Business Group.

“It’s clearly been good,” King said of NAFTA. “No. 1, it has lowered our costs, and No. 2, it kept manufacturing jobs in the U.S. and opened markets where we would not have been as competitive.”

Amway had 1,900 products qualifying for NAFTA export last year.

“NAFTA overall has helped,” King said.

“Whether you want to address it or not, we are in a global economy. I’m a big exporter, and the free-trade agreements are beneficial to us as a manufacturer.”

Although the UAW opposes NAFTA, Levy said the bigger problem lies beyond North America.

“The loss of manufacturing jobs? I think that has more to do with China,” Levy said. With demands for global pricing, automakers and the world’s biggest retailer are pushing their suppliers to run around the world for the cheapest sources.

“The Big Three and Wal-Mart have changed the landscape tremendously, that’s for sure,” Levy said.