Dennis Miller
What about my Member
- Joined
- Mar 13, 2003
- Posts
- 200
It was supposed to benefit all, but some workers today are hurting
BY GREGG FIELDS
[email protected]
When he became a pilot, Frank Haigney was struck by the zeal his co-workers brought to the workplace.
They loved their jobs. They led glamorous lives. And there was a sense that they were truly serving the flying public.
But after deregulation, that changed, Haigney says. ''Innocence evolved into cynicism,'' says the Fort Lauderdale resident.
He worked at a couple of airlines that went under, including Air Florida and Midway, and got laid off at others. The financial security he anticipated evaporated.
Today, at 59, he still works training pilots. He keeps debt and spending to a minimum and he has a sideline business making outdoor furniture. ''I have to,'' he says.
He's not outright opposed to deregulation. But he questions whether economists realize that deregulation's assets are often a liability to rank-and-file workers. ''From what I've seen,'' he said, ``deregulation has been a mixed blessing.''
Indeed, it has.
When it was first unleashed on the American economy in the 1970s, deregulation -- not just of airlines, but innumerable other industries -- promised nothing but net gains for workers and society.
Lower prices. Greater choices. More competitive companies.
And on those promises, it has delivered, whether you're talking about phone service, cable television or upstart airlines like Southwest.
But in economics, every action has a reaction. Interviews with local workers, phone interviews with economists around the country and an examination of the historical record in several deregulated industries shows the initial cascade of economic benefits is giving way to troubling ripple effects in the labor market.
It appears to be producing, or contributing to, maladies that include: falling wages, as evidenced by the wage concessions that airline workers recently took; higher unemployment, with a jobless rate that has been rising steadily for over two years and more than two million lost manufacturing jobs; and lightly regulated industries that are reeling from bankruptcies or fiscal scandals.
The tumult appears certain to continue because the deregulation movement is gaining momentum in the current White House. Efforts to deregulate are particularly noticeable in the media, telecom and trade. Examples:
• The FCC recently liberalized the rules regarding broadcast station ownership, allowing one company to own up to three TV outlets in a single market.
• Free-trade pacts are proliferating, with particular emphasis on developing a Free Trade Area of the Americas whose secretariat could end up in Miami.
• There is sentiment in Washington for deregulating broadband technology, the high-speed Internet services, into homes.
South Floridians, especially, are well aware of the effects of deregulation.
Eastern Airlines and Pan American World Airways never could compete in that world, and they collapsed.
Likewise, a once-thriving savings-and-loan industry all but disappeared as it was deregulated in the 1980s, swallowing up institutions like AmeriFirst, Citizens Federal and American Savings. Most local banks went out, too, including the state's largest, Southeast and Barnett.
Internationally, textile firms and agricultural companies in South Miami-Dade found themselves competing with low-cost competitors in Central America and the Caribbean.
Alfred Kahn, the Carter administration's guru of deregulation, says it's understandable that some people are questioning deregulation's benefits in areas like airlines and telecommunications.
''Since these industries were among the most important -- and most visible -- to have been unleashed from regulation in recent decades . . . their wrenching experience has understandably raised the question of whether their deregulation should be reconsidered or even reversed,'' says Kahn, in a new report he provided to The Herald.
He remains steadfast in his beliefs, however.
''I begin by baldly stating my essential conviction,'' Kahn says. ``Airline deregulation has been a nearly unqualified success, despite the industry's unusual vulnerability to recessions, acts of terrorism and war.''
The philosophy behind deregulation is relatively simple: A free market is inherently more efficient and productive than one hamstrung with government red tape.
But there are costs. Some U.S. companies compete in a deregulated marketplace by cutting expenses that include health plans and pensions, for example. Or they simply close production and move somewhere cheaper.
''They get into this race to the bottom,'' said Maurice Emsellem, policy director with the National Employment Law Project. ``Then they just hack away at the safety net.''
Furthermore, the absence of oversight has produced some private-market disasters in recent years, like Enron and WorldCom.
''Regulations are necessary, but they can be either too weak or too strong,'' says Joseph Stiglitz, the renowned economics professor at Columbia University, and Nobel laureate, said by phone from Spain.
He also cautions that, even when deregulation is a worthy goal, getting there is a trial-and-error effort. ''The deregulatory process itself is fraught with a lot of difficulties,'' he says. ``The reason, in part, is it represents change. And companies don't always adapt well.''
Banking, particularly Florida banking, is one example. As the industry was deregulated, the state's financial institutions were picked off by out-of-towners who had been previously barred from crossing borders.
The resulting mergers almost always meant job losses.
Sergio Lopez of Miami was one of the casualties. After First Union bought his employer in the mid-'90s he was laid off, partly, he believes, because he had the highest salary in his department. ''That's not good form in a deregulated world,'' he says.
Lopez, who has an MBA from Northwestern, always enjoyed the social and civic involvement of banking -- the feeling that lenders were helping their communities.
''I think those things are just so important,'' he says. `
Deregulation changed the industry's focus, however. ``They weren't really banking companies anymore. They were merger machines.''
He now runs a Miami medical transcription company. ''I guess I'm a redeployed asset,'' he says.
Economists say that, in the long run, society benefits when workers are redeployed from deregulated industries into emerging ones.
But it can be a bumpy transition. People must find new jobs. They may have to move. They could go broke or need more training.
''It takes a while for labor to recognize the former ways of doing things are gone,'' says Aaron Gellman, a management professor at Northwestern University and an expert on transportation issues.
He adds: ``Labor mobility has been a very good thing for this country. But I do understand the pain of workers.''
During the 1990s, dispossessed workers were more easily reabsorbed, so there was little outcry over lost jobs.
When the economy is weak, however, as it is now, finding new jobs becomes extremely problematic.
What's needed, say some proponents, is public policy that recognizes the human costs wrought by deregulation's efficiencies.
''We need pragmatism,'' says Robert Atkinson, of the centrist Progressive Policy Institute in Washington, in a recent interview in Fort Lauderdale, where he had a speaking engagement. ``We're in these ideological straitjackets, and we need to solve the problems.''
Haigney, the Broward pilot, couldn't agree more. In a deregulated world, he says, ``you never have a sense of security. I don't know what's going to happen in the near or long-term future. Overnight, I've seen people go from upper middle class to the bottom of the barrel.''
BY GREGG FIELDS
[email protected]
When he became a pilot, Frank Haigney was struck by the zeal his co-workers brought to the workplace.
They loved their jobs. They led glamorous lives. And there was a sense that they were truly serving the flying public.
But after deregulation, that changed, Haigney says. ''Innocence evolved into cynicism,'' says the Fort Lauderdale resident.
He worked at a couple of airlines that went under, including Air Florida and Midway, and got laid off at others. The financial security he anticipated evaporated.
Today, at 59, he still works training pilots. He keeps debt and spending to a minimum and he has a sideline business making outdoor furniture. ''I have to,'' he says.
He's not outright opposed to deregulation. But he questions whether economists realize that deregulation's assets are often a liability to rank-and-file workers. ''From what I've seen,'' he said, ``deregulation has been a mixed blessing.''
Indeed, it has.
When it was first unleashed on the American economy in the 1970s, deregulation -- not just of airlines, but innumerable other industries -- promised nothing but net gains for workers and society.
Lower prices. Greater choices. More competitive companies.
And on those promises, it has delivered, whether you're talking about phone service, cable television or upstart airlines like Southwest.
But in economics, every action has a reaction. Interviews with local workers, phone interviews with economists around the country and an examination of the historical record in several deregulated industries shows the initial cascade of economic benefits is giving way to troubling ripple effects in the labor market.
It appears to be producing, or contributing to, maladies that include: falling wages, as evidenced by the wage concessions that airline workers recently took; higher unemployment, with a jobless rate that has been rising steadily for over two years and more than two million lost manufacturing jobs; and lightly regulated industries that are reeling from bankruptcies or fiscal scandals.
The tumult appears certain to continue because the deregulation movement is gaining momentum in the current White House. Efforts to deregulate are particularly noticeable in the media, telecom and trade. Examples:
• The FCC recently liberalized the rules regarding broadcast station ownership, allowing one company to own up to three TV outlets in a single market.
• Free-trade pacts are proliferating, with particular emphasis on developing a Free Trade Area of the Americas whose secretariat could end up in Miami.
• There is sentiment in Washington for deregulating broadband technology, the high-speed Internet services, into homes.
South Floridians, especially, are well aware of the effects of deregulation.
Eastern Airlines and Pan American World Airways never could compete in that world, and they collapsed.
Likewise, a once-thriving savings-and-loan industry all but disappeared as it was deregulated in the 1980s, swallowing up institutions like AmeriFirst, Citizens Federal and American Savings. Most local banks went out, too, including the state's largest, Southeast and Barnett.
Internationally, textile firms and agricultural companies in South Miami-Dade found themselves competing with low-cost competitors in Central America and the Caribbean.
Alfred Kahn, the Carter administration's guru of deregulation, says it's understandable that some people are questioning deregulation's benefits in areas like airlines and telecommunications.
''Since these industries were among the most important -- and most visible -- to have been unleashed from regulation in recent decades . . . their wrenching experience has understandably raised the question of whether their deregulation should be reconsidered or even reversed,'' says Kahn, in a new report he provided to The Herald.
He remains steadfast in his beliefs, however.
''I begin by baldly stating my essential conviction,'' Kahn says. ``Airline deregulation has been a nearly unqualified success, despite the industry's unusual vulnerability to recessions, acts of terrorism and war.''
The philosophy behind deregulation is relatively simple: A free market is inherently more efficient and productive than one hamstrung with government red tape.
But there are costs. Some U.S. companies compete in a deregulated marketplace by cutting expenses that include health plans and pensions, for example. Or they simply close production and move somewhere cheaper.
''They get into this race to the bottom,'' said Maurice Emsellem, policy director with the National Employment Law Project. ``Then they just hack away at the safety net.''
Furthermore, the absence of oversight has produced some private-market disasters in recent years, like Enron and WorldCom.
''Regulations are necessary, but they can be either too weak or too strong,'' says Joseph Stiglitz, the renowned economics professor at Columbia University, and Nobel laureate, said by phone from Spain.
He also cautions that, even when deregulation is a worthy goal, getting there is a trial-and-error effort. ''The deregulatory process itself is fraught with a lot of difficulties,'' he says. ``The reason, in part, is it represents change. And companies don't always adapt well.''
Banking, particularly Florida banking, is one example. As the industry was deregulated, the state's financial institutions were picked off by out-of-towners who had been previously barred from crossing borders.
The resulting mergers almost always meant job losses.
Sergio Lopez of Miami was one of the casualties. After First Union bought his employer in the mid-'90s he was laid off, partly, he believes, because he had the highest salary in his department. ''That's not good form in a deregulated world,'' he says.
Lopez, who has an MBA from Northwestern, always enjoyed the social and civic involvement of banking -- the feeling that lenders were helping their communities.
''I think those things are just so important,'' he says. `
Deregulation changed the industry's focus, however. ``They weren't really banking companies anymore. They were merger machines.''
He now runs a Miami medical transcription company. ''I guess I'm a redeployed asset,'' he says.
Economists say that, in the long run, society benefits when workers are redeployed from deregulated industries into emerging ones.
But it can be a bumpy transition. People must find new jobs. They may have to move. They could go broke or need more training.
''It takes a while for labor to recognize the former ways of doing things are gone,'' says Aaron Gellman, a management professor at Northwestern University and an expert on transportation issues.
He adds: ``Labor mobility has been a very good thing for this country. But I do understand the pain of workers.''
During the 1990s, dispossessed workers were more easily reabsorbed, so there was little outcry over lost jobs.
When the economy is weak, however, as it is now, finding new jobs becomes extremely problematic.
What's needed, say some proponents, is public policy that recognizes the human costs wrought by deregulation's efficiencies.
''We need pragmatism,'' says Robert Atkinson, of the centrist Progressive Policy Institute in Washington, in a recent interview in Fort Lauderdale, where he had a speaking engagement. ``We're in these ideological straitjackets, and we need to solve the problems.''
Haigney, the Broward pilot, couldn't agree more. In a deregulated world, he says, ``you never have a sense of security. I don't know what's going to happen in the near or long-term future. Overnight, I've seen people go from upper middle class to the bottom of the barrel.''
