Squeezing the American Dream: Workers Face Diminishing Returns

By Nicholas von Hoffman, Truthdig. Posted June 9, 2008.

You may be surprised to learn that the pleasant person from FedEx Ground delivering your package owns the truck which he or she has parked in front of your house. FedEx Ground drivers, you will find out in Steven Greenhouse's The Big Squeeze: Tough Times for the American Worker, are not FedEx employees.

They are what are called independent contractors, although it demands no little effort to discern what about their position is independent. If they do not do what they are told, their contracts are abrogated forthwith. They are required to buy their own truck with 60 monthly installments of $781.12, which comes to $46,867.20. Plus there is a final kicker payment of $8,000, all of which adds up to a grand total of almost $55,000. On top of this, as an independent business person, the driver must bear the costs of insurance, maintenance, fuel, repairs and the fee for the FedEx uniform rental.

FedEx Ground drivers who want to take vacations must hire their own replacements to cover the routes while they are gone. If a FedEx Ground independent contractor can afford it, he should take a vacation because the hours are long, the work is hard and the compensation is less than princely. A driver will take home between $25,000 and $35,000 a year.

One of the strengths of Greenhouse's book is that it puts the meat of specificity on the bones of labor statistics. The Big Squeeze is salted with interviews and biographies of people in dozens of occupations. It is instructive to read the statistics concerning highly trained people losing their jobs to people in low-wage countries, but the numbers take on painful significance when you are introduced to an electrical engineer named Myra Bronstein, working for Watchmark, a Bellevue, Wash., firm which develops software used by cell phone companies.

One day Bronstein and 17 of her colleagues got an e-mail asking them to report to Watchmark's boardroom the following morning. As Myra and the other quality assurance engineers gathered in the boardroom, the director of human resources began giving out large manila envelopes. Once everyone was there, Myra recalled, "The head of HR said, 'Unfortunately, we're having layoffs, and you're in the room because you're being impacted by the layoffs.'" The 18 engineers were dumbstruck, but the head of human resources pressed on. "'Your replacements,'" she continued, "'are flying in from India, and you're expected to train them if you are going to receive severance.'"

Drawing back the camera on employment conditions, Greenhouse writes that "Forrester Research estimates that 3.4 million white-collar jobs -- some 260,000 a year -- will be sent overseas between 2003 and 2050. Forrester forecasts that this exodus will include 1.6 million office-support jobs, 542,000 computer jobs, 259,000 management jobs, 191,000 architecture jobs, 79,000 legal jobs, and 30,000 art and design jobs."

The author explains that these numbers are a small fraction of total employment in their respective fields, but the percentage of jobs held by college-trained white-collar workers in fields such as insurance, pharmacology, banking and information technology which can be shipped abroad in some instances ranges above 40 percent.

A few years ago many an American entertained the conceit that the natural world division of labor, la Adam Smith and David Ricardo, would have the little brown and yellow people doing the heavy lifting jobs in ill-ventilated factories reeking of lead vapors, while large, highly intelligent, highly white citizens of the United States would enjoy a life of brain work and ease. It has not worked out that way, as Greenhouse shows his readers. Whether or not one's job is actually sent abroad, the mere fact that it can be works not only to place a limit on what you can expect to be paid but depresses wages and salaries.

Gone overseas, besides jobs, is the capability of generating jobs. Technology, the industrial knowledge base and the necessary organizational skills to use these efficiently are also being exported. This puts additional downward pressure on compensation here at home and makes its contribution to Greenhouse's doleful overall narrative of what has been happening to perhaps four-fifths of our working population for the last 30 years or so.

See more stories tagged with: the big squeeze, steven greenhouse

Nicholas von Hoffman, a former columnist for The Washington Post and a former commentator for CBS' "60 Minutes," is a regular columnist for The New York Observer. He is the author of numerous books, including "Hoax: Why Americans Are Suckered by White House Lies" and "Capitalist Fools: Tales of American Business From Carnegie to Forbes to the Milken Gang."

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