Corporate profits are higher than ever, but for many workers, things just keep getting worse.
Take the situation unfolding at Caterpillar Inc.'s London, Ontario plant. The company, the world's largest heavy machinery manufacturer, is insisting that Canadian workers take a 50 percent pay cut, give up their current pension plan and swallow a significant reduction in benefits. On Jan. 1, Caterpillar locked out the plant's 465 workers, refusing to let them do their jobs until they make these sacrifices.
The moves are familiar to anyone who's watched the auto industry struggle with its workers and union over the past several decades. But Caterpillar, unlike the automakers, hasn't suffered much economically. Indeed the company has long stood out for its profitability, in the last five years hovering above the top 13th percentile on the Fortune 500 list. In the last three months of 2011, as Caterpillar was pressing Canadian workers to give in to its requests, the company reported a 44 percent surge in profits from the previous year. Now, if workers continue to resist, Caterpillar appears to be threatening to take their jobs out of the country. Not to China or Mexico, but just over the border to Muncie, Ind., where desperate Americans are eager to take any job -- no matter how low the pay.
"In the small picture, Caterpillar is a really hard employer, but the big picture here is obviously the race to the bottom," said Linda Kaboolian, a lecturer in Public Policy at Harvard, who studies workplace issues and has closely tracked the company's practices through the decades.
"The interesting political question in this country is whether or not there's any wage floor which is too low," she said. [emphasis added]Read the rest at The Huffington Post
Caterpillar Inc. Sees Surging Profits, Amid Pay Cuts And Rumors Of Plant Closures
by Lila Shapiro
Pretty clear where this is headed. Business is refusing margin compression and demanding that workers take wage cuts to maintain prices and profit margins. That means growing inequality, resulting in increasing social unrest and political turmoil.