In this issue:

EIR Profile Documents Devastation of Industrial Heartland

Wal-Mart Slave Wages Cost America Billions of Dollars

Michigan Lost One-Fourth Factory Jobs Last Five Years

Food-Stamp Caseloads Soar Since July 2000


From Volume 3, Issue Number 34 of EIR Online, Published Aug. 24, 2004

U.S. Economic/Financial News

EIR Profile Documents Devastation of Industrial Heartland

A profile of the physical economy of Pennsylvania, presented in a briefing book prepared by the EIR Economics staff, shows both the world-class build up of infrastructure, industry, agriculture, and output potential in this state—and the entire Great Lakes/Ohio Valley industrial belt (Ohio, Kentucky, Michigan, etc.)—and then the destructuring over the past 40 years, now to the point of collapse. A few items:

Population: dislocated; impoverished. The state population is barely growing; the prevailing pattern is that formerly highly organized towns and counties of the industrial/transportation corridors are massively losing population—either out of state, or ex-urban, and the poverty rates of those remaining are increasing (e.g. Philadelphia and Pittsburgh have overall poverty levels of 20% officially, i.e., by understated standards).

1970 to 2000: Population Declined

* Pittsburgh—down 36% (from 520,000 to 335,000)

* Philadelphia—down 22% (from 1,950,000 to 1,520,000)

* Erie—down 20% (from 129,000 to 104,000)

* Johnstown—down 44% (from 42,000 to 24,000)

* Allentown-Bethlehem—down 3% (from 110,000 to 107,000)

Industry: A leader from colonial times in iron output and machining, Pennsylvania's annual raw-steel output rose from some 7 million tons in 1900, up to 33 million tons in 1973, and since then has fallen back to 6 million tons in 2003! Other industries have fallen accordingly.

1970 to 2000: Manufacturing Workforce Declined

* Pittsburgh—down 72% (from 37,612 to 10,374)

* Philadelphia—down 70% (from 192,071 to 56,763)

* Erie—down 48% (from 18,694 to 9,694)

* Johnstown—down 84% (from 5,656 to 897)

* Allentown-Bethlehem—down 48% (from 17,842 to 9,354)

Infrastructure:

* Health Care: only 1 of 67 counties is at Hill-Burton standard of 4.5 beds per 1,000 population, as of 2002 (Montour County), whereas, in 1980, the statewide average was 4.78 beds/1,000. (Montour, a sparsely populated rural area, happens to be home to the large Geisinger Medical Center—originating from an industrialist's endowment—and now serving a multi-county area, requiring very long drive-times for medical care).

Five Veterans Hospitals are targetted for closure or downsizing. Pennsylvania, Texas, and Mississippi are the states most targetted for closing facilities in the Veterans Administration medical system, under the Cheney-Bush Administration.

Pittsburgh: VA Highland Drive Hospital (180 beds, currently one of the treatment centers for returnees from Enduring Freedom and Iraqi Freedom Operations), is slated for shutdown.

Erie: phase out inpatient surgery and acute care beds.

Butler: eliminate acute care services.

Altoona: close out acute care beds.

Transportation:

* Rail decrepit: The state's former world-class dense network, is now down to a barely functional few main lines, e.g., one Amtrak passenger train a day from Pittsburgh to Washington, D.C.; one unit coal train every two days, to central Pennsylvania thermal plants (and no other freight on this line!).

* Waterways aged: The Ohio River System and its tributaries, the Monongahela and Allegheny, have aged locks and dams, and are now having severe staff cuts in the Army Corps of Engineers Pittsburgh District. (On Aug. 9, the entire system went out of service, while the Louisville, Ky. 40-year-old lock gate was repaired—to be done by Aug. 22.) Proceeding downriver from Pittsburgh, the first three lock and dam installations, out of 20 on the whole system from Pittsburgh to the Mississippi River, are old and outdated: Emsworth (1921); Dashields (1929), and Montgomery Island (1936).

Water Management: Dozens of "high-hazard" dams, aged sewage systems, and other outmoded water infrastructure.

Most flood-prone state in the nation. It has 83,161 miles of rivers and streams, second only to Alaska. It has the second largest state Dam Safety program, only California's is larger.

The state has 3,100 non-federally owned or operated dams. The Pennsylvania Department of Environmental Protection (DEP), which monitors these regulated dams, put out a statement on July 27 that it considers 44 of the state's "high-hazard" dams "unsafe." The state has 749 high-hazard dams out of the 3,100 it monitors. (A high-hazard dam designation refers to those with significant downstream populations at risk were the dam to fail.)

[Note on the famous 1889 Johnstown Flood which killed 2,200 people. The catastrophe was a direct result of the refusal to maintain a dam, and lake, by its private owners—the Hunting and Fishing Club, of which Andrew Mellon and associates from Pittsburgh were leading members. The Club decreed repairs were not needed, and would spoil their lake amenities].

Pennsylvania ranks top in the USA, for number of sewage overflows per year. The state had 1,671 in 2002; Ohio was next with 1,507. Southwest Pennsylvania has by far the most in the state, with 414 alone in Allegheny County—a single county outranking all 44 states in numbers of sewage overflows! This is a direct result of aging, broken, outmoded water systems.

Wal-Mart Slave Wages Cost America Billions of Dollars

Wal-Mart has caused the loss of millions of jobs and the destruction of communities, according to a new study, "Hidden Cost of Wal-Mart Jobs," by two researchers at the University of California (Berkeley) Labor Center, released Aug. 2. The UCB study focusses on one further cost that often escapes public view: that Wal-Mart workers, on the whole, are paid such low wages, that they end up having to rely on public safety net programs, such as food stamps, Medicaid, Medicare, subsidized housing, to survive.

The researchers looked at the situation in California, where Wal-Mart employs 44,000 workers (7% of the national total of Wal-Mart workers), but where Wal-Mart has developed business plans for a major expansion, which has met with growing opposition in the state. Using 2001 data, the researchers found that in California, on average, Wal-Mart workers earned $9.70 per hour, which is 31% less than workers earned at large retail stores in California ($14.01 per hour), and substantially less than what a production worker earns. As well, less than half of Wal-Mart workers had health coverage provided by the company.

The researchers estimated that as a result of the low wages, each California Wal-Mart worker required $1,952 in public assistance, even while working at Wal-Mart, which comes to $86 million for all 44,000 California Wal-Mart workers. And these Wal-Mart workers only received bare-bones assistance. The researchers say that the cost to taxpayers for public assistance to Wal-Mart workers nationally could reach $2 billion. Now consider the additional hidden cost to state, local, and Federal governments, when Wal-Martization of America causes millions of more workers to be employed in the same wage conditions.

Michigan Lost One-Fourth Factory Jobs Last Five Years

Michigan has lost 206,000 factory jobs—23% of its manufacturing workforce—during the past five years, according to a Michigan Dept. of Labor study, reported in the Detroit News Aug. 19. The state lost 25,000 more jobs in July, with nearly two-thirds of the job losses—16,000—in manufacturing, according to a report by the Michigan Department of Labor & Economic Growth. The losses left Michigan with 686,000 manufacturing jobs, down from 892,000 in July 1999.

Michigan State AFL-CIO President Mark Gaffney and U.S. Rep. Sander Levin (D), in a telephone conference call arranged by the Kerry presidential campaign, denounced Bush's tax cuts as a failure.

Gaffney also cited the alarming proportion of long-term joblessness in manufacturing. He said that two union locals—electrical workers in Detroit and ironworkers statewide—report more than 20% of their members have not worked since Fall 2002.

Food-Stamp Caseloads Soar Since July 2000

Food-stamp caseloads have soared by 7.1 million people—a whopping 42%—since July 2000, according to the Center on Budget and Policy Priorities Aug. 16. The number of Americans depending on food stamps has been rising for nearly four years, hitting 23.9 million people—the highest level since November 1996—in May 2004, the last month for which data are available. One of the biggest reasons is the rising number of long-term jobless workers who have run out of regular, state-funded unemployment benefits but have not found a job. Food stamp caseloads have increased in 48 states and the District of Columbia between May 2003 and May 2004, rising in 11 of the last 12 months, even during the summer, when they usually drop. In the past two years, caseloads shot up by more than 35% in six states: Texas, 43.8%; Delaware, 41.5%; Massachusetts, 37.7%; Utah, 36.4%; Colorado, 35.9%; Missouri, 35.8%.

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