US Labor Is in Retreat as Global Forces Squeeze Pay and Benefits

This week, union workers at Delphi Corp. and General Motors will take drastic cuts in their pay and benefits. While the United States may be enjoying an economic recovery, workers in the auto industry and across the nation are contemplating lower wages just to keep their jobs. At the same time, they face a cost of living that has been rising faster than wage increases. But American workers may not have a choice: They are competing with low-wage labor abroad. Delphi's workers in China earn US$3 an hour, while American employees currently earn an average of US$27 an hour, plus generous benefits. Companies struggling to stay afloat in a globalized economy can no longer afford the generous packages that they offered in the past. The situation has some economists concerned; Harley Shaiken of UC Berkeley worries, "We're looking at a society where people exit rather than enter the middle class." Others contend that globalization keeps prices low and that the US creates many more jobs than it loses annually. But as more workers accept lower pay, the debate is sure to intensify. How will US workers respond to globalization? – YaleGlobal