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Nancy Koehn on BPR I 11/28/18

As General Motors Stock Rises, Workers Get Left Out

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An employee prepares to install the hood on a vehicle at a General Motors plant in Arlington, Texas.
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Nancy Koehn on BPR I 11/28/18

On the campaign trail, candidate Donald Trump promised Americans a lot of things: To make America great again, to end the North American Free Trade Agreement (NAFTA), to build a massive border wall. Perhaps most critical, though, was his promise to bring manufacturing jobs back to the United States.

Campaigning throughout dilapidated former factory towns in Michigan and Ohio, Trump promised to “stop [other] countries from taking our jobs,” and it worked. Trump won former industrial states like Ohio, Michigan, Pennsylvania and Indiana. Now, the question is if the president can keep his promise.

On Monday, General Motors announced they would be laying off 14,000 workers — an 8 percent reduction of its workforce — and would potentially close five factories to focus more on autonomous electric vehicle production.

Historian Nancy Koehn said the move is emblematic of the time period we’re living in right now.

“It is another example of how corporate largesse and corporate success is not necessarily shared in the same way it was even 15 years ago with labor,” Koehn said. "Corporate profits have been surging ahead of labor income for at least 10 years. So, you have the corporations and stockholders —Wall Street — doing well.”

Koehn isn't alone in her thinking. Former World Bank President Joseph Stiglitz has been saying for years that corporate profits have far outpaced gains for workers, and this is contributing to economic stagnation and worsening economic inequality. Despite a growing economy under President Trump, Koehn thinks this is really only a boom for the wealthy. For workers, the future doesn’t look as bright.

“All of that doesn’t bode well for the over 14,000 families who are getting pink slips right before Christmas," Koehn said. "It also doesn’t bode well for income inequality and what we think of as American possibility and promise."

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