From 7 am to 3 pm each day, John Arnold darts around Caterpillar’s “materials-handling facility” in his forklift, maneuvering it with the deftness of a NASCAR driver. His job is to unload tractor parts from flatbed trucks and then deposit those parts–from engine gaskets to one-ton tractor buckets–in the huge store yard at the plant, just east of Peoria, Illinois. An earnest, deep-voiced giant of a man, Arnold likes his job, with one major reservation–twentysomethings like him can earn only three-fourths as much as the fiftysomethings who work alongside him.
Under the two-tier contract at Caterpillar, the most Arnold can ever earn is $14.90 an hour, or $31,000 a year–so little, he says, that some of his co-workers are living at home with their parents. “Some,” he said, “are even on food stamps.”
A 52-year-old who works alongside Arnold, doing exactly the same work, earns $19.03 an hour, or just under $40,000 a year, because employees who started before Arnold began in 1999 are on a higher wage scale. “I don’t like it,” Arnold said. “I wish I was at least able to get to the pay scale that the guys who are right next to me are making.”
Scott Wilcoxon, a 26-year-old Navy veteran who not long ago served as an electrician on a nuclear submarine, operates five computer-controlled metal-cutting machines at Caterpillar. The maximum he can ever earn is $19.84 an hour, 21 percent below the maximum for the 50-year-olds working next to him. Wilcoxon says it’s a struggle to support his wife and three children. “We can buy our food and our gas,” he says. “But we can’t go out to eat at a nice restaurant. We can’t go to a movie. We can afford very few extras.”
Caterpillar, based in Peoria, is an enduring symbol of America’s industrial prowess, thanks to the success of its earth-moving machinery. At the end of World War II, the US Army left behind thousands of Caterpillar tractors to help Europe and Asia rebuild, a gesture that ultimately established Caterpillar worldwide. For decades the company reigned as the king of tractor production, and its factories in and around Peoria paid some of the best wages in the American heartland. In the late 1980s, Caterpillar’s factory workers earned $16 an hour on average, equivalent to $28 an hour in 2007 dollars.
“My dad’s worked at Caterpillar for thirty-seven years, and when I was a kid, he was making some good money,” Arnold said. “I was hoping that I could eventually get to where my dad’s at.” His father, a millwright who repairs conveyor belts and other machinery, works in the same giant materials-handling facility and earns $25 an hour, nearly twice as much as his son. (Arnold’s pay is lower than his father’s not just because he is on the lower tier of a two-tier pay scale but also because he works in a less-skilled pay grade.)
John Arnold and Scott Wilcoxon are the type of workers on whom America’s industrial success was built: diligent, dedicated and determined. But because their wages are lower than those of the previous generation, they are part of a reverse economic evolution unfolding at workplaces across the country: at General Motors, Ford and Chrysler; the Dana Corporation’s more than two dozen auto parts plants; American Axle’s two plants in upstate New York; ACF’s railcar plant in Pennsylvania; and longshoremen’s hiring halls along the East Coast.