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THE BURDEN OF THE WORKING WOMAN
ECONOMIC RECOVERY? CERTAINLY NOT FOR WOMEN IN LOW-PAYING SERVICE JOBS
CLERKING OR WAITING TABLES. FOR SOME, POVERTY IS ALWAYS CLOSE AT HAND.
By Donald L. Barlett and James B. Steele, INQUIRER STAFF WRITERS
Alan Greenspan, the chairman of the Federal Reserve Board, can't understand why people are worried about their jobs.
"Today, a truly puzzling phenomenon confronts the American economy," he told an economic conference in June 1996. "I refer to the pervasiveness of job insecurity in the context of an economic recovery that has been running for more than five years . . .
"This sense of job insecurity is so deep that many workers fear their ability to make ends meet in the future. Many appear truly concerned about a prospective decline in their standard of living."
And jobs were plentiful. As Greenspan had put it in January 1995, "cumulatively, payrolls have now increased roughly six million over the last couple of years."
Betty Lizana knows a little bit about those jobs.
She's held two of them.
Both paid less than the job she lost.
For 16 years, Lizana was the payroll officer at an assembly plant in Biloxi, Miss., that made electrical wiring components for vehicles and household appliances.
In May 1992, the plant's owner, Fleck Inc., closed the Biloxi facility, packed up the machinery and shipped it to a plant in Juarez, Mexico, where labor is cheaper. Lizana was dismissed, along with about 50 others.
Betty Lizana's odyssey since then says much about how working Americans - especially women - are faring in today's job market. And it helps explain the anxiety about jobs that Greenspan and others in Washington can't quite grasp.
The working lives of millions of Americans have been upended by changes brought about by Washington policies. Of all those affected, the burden has fallen most heavily on women.
At a time when unprecedented numbers of women are diving into the workforce - often because their households desperately need the income - the tide is going out. High-paying jobs, never common for women, are becoming scarcer.
In July 1993, about a year after she was let go by Fleck - and long after her unemployment benefits had run out - Betty Lizana found another job. She became a cashier on the Biloxi Belle, one of the floating casinos that line the Gulf Coast near Biloxi.
But shortly after she started, the Biloxi Belle ran into trouble. The casino's owners filed for bankruptcy court protection. Then, in January 1994, court officers were dispatched to close down the ship and secure its assets.
"They just came in one day and locked the place up," Lizana recalled. "I was at work when they came. Managers came in for the next shift and their places were locked. Padlocks on the door. I'd never seen anything like it."
This time, it took a year and a half to find another job. The Lizana family got by on her unemployment compensation and on her husband's small disability pension. Lizana's new job was with a contractor for an employer that has been trimming its payroll for five years, dismissing more than 260,000 workers: the U.S. government.
In September 1995, she began managing the food-service inventory at Keesler Air Force Base, the area's largest employer. But it's only part-time.
"I don't get full-time," she said. "I go in and work two hours, then go back later and work two hours. I'm lucky if I get 20 or 25 hours a week."
In four years, Betty Lizana, 52, went from full-time payroll supervisor in an assembly plant at $9 an hour to full-time casino cashier at $5 an hour to part-time food-service worker at $7.97 an hour - whenever she can get work.
Welcome to the jobs of the 21st century.
In the last 30 years, Washington trade policies have swept manufacturing jobs away, to low-wage countries. In one industry that was among America's largest - apparel - it was primarily women who staffed the factories. Nearly half of those jobs are gone.
Except for those in the professional class, most women now must resort to service jobs: the clerking, cleaning, table-waiting and cashiering jobs that provide little money, few or no benefits, and part-time or irregular hours.
This is true for veteran workers like Betty Lizana just as it is for women seeking their first paycheck.
And for women, the harm is all the greater because, as a group, they were already earning less than men.
In 1995, the median weekly earnings of women were 75 percent of men's wages. This disparity persists across nearly every occupation.
For example, in 1995 just 34 percent of marketing, advertising and public relations managers were women. And their median annual income - $32,800 - was only 59 percent of men's. It was much the same in other professions.
There are, of course, some jobs in which men and women are paid the same: those that pay minimum wage or a little more. Not surprisingly, women hold more of these jobs.
In 1995, a total of 6.4 million people aged 25 and older earned between $4.25 - the minimum wage - and $5.99 an hour. Of that number, 4.3 million - or 67 percent - were women.
These numbers can be expected to grow substantially, since new welfare rules require recipients - most of whom are women - to work.
As for the increase in the minimum wage enacted by Congress in August, it will have little effect. The minimum will reach $5.15 an hour, in two steps, by September 1997. That adds up to $10,712 a year, which means the minimum wage-earners of 1997 will be behind their counterparts of 30 years ago. They earned nearly $2,000 more in inflation-adjusted 1995 dollars.
While men have always earned more than women, this stubborn gap is taking on much more urgency, because women are making up an increasingly greater share of the workforce.
In fact, sometime early next century, women - for the first time - will outnumber men in the U.S. workplace.
Over the last 30 years, the number of working men has gone up 45 percent, from 46.3 million in 1965 to 67.4 million in 1995. The number of working women jumped three times as fast, from 24.7 million to 57.5 million.
In 1965, women held 35 percent of all jobs. That had swelled to 46 percent by 1995. And it's still going up.
One reason: More and more women are solely responsible for a household.
Internal Revenue Service statistics show that the fastest-growing group of tax-return filers is "heads of households." The category consists of unmarried, divorced or legally separated people supporting children or parents, but it is made up mostly of single mothers.
From 1970 to 1993, the number of head-of-household tax returns jumped from 3.6 million to 15.2 million - an increase of 322 percent.
While single mothers and other heads of households are the fastest-growing group, their incomes aren't growing at all.
Their average adjusted gross income went from $6,100 in 1970 to $19,200 in 1993 - a 215 percent increase. That lagged behind the inflation rate of 272 percent for the period. So single mothers today are worse off than the single mothers of 1970.
The inevitable result of all these factors: Nearly twice as many adult women as men are below the poverty level. In all, 14.1 million women over 18 were classified as living in poverty in 1994, compared with 8.6 million men.
For 1995, the poverty levels were: one person, $7,761; two people, $9,935; three, $12,156, and four people, $15,570.
What this means, of course, is that an ever-increasing number of American children are growing up in poverty. In 1994, more than 15 million children lived below the poverty line. That was up from 13 million a decade before.
THE JOBS OF TOMORROW
Lest you think things are going to get better for women, take a careful look at the federal government's job projections for 1996 to 2005.
These are the occupations that the Department of Labor says will show the greatest growth and therefore offer the greatest opportunities.
Just what might these employment opportunities be in an era that Washington policymakers say, over and over, depends on our ability to create high-tech jobs?
The No. 1 occupation, with a projected increase of 562,000 jobs: cashiers.
In 1995, there were 891,000 women cashiers in retail establishments. They filled 77 percent of such jobs. Their median weekly wage - meaning half earned more, half earned less - was $233, or $12,116 a year. Men earned $13,312, or 10 percent more.
No. 2: janitors and cleaners. Expected gain, 559,000 jobs.
In 1995, there were 345,000 women employed as janitors and cleaners - 26 percent of the jobs. Their median weekly wage: $259, or $13,468 a year. Men made $15,964 - 19 percent more.
No. 3: retail sales clerks. Projected increase, 532,000 jobs.
In 1995, nearly 1.8 million women were sales clerks. They filled 56 percent of the jobs. Median weekly wage: $253, or $13,156 a year. Men earned $18,980 - or 44 percent more.
No. 4: waiters and waitresses. Expected increase, 479,000 jobs.
In 1995, there were 418,000 women working as food-servers. They filled 71 percent of those jobs. Their median weekly pay: $258, or $13,416 a year. Men earned $16,328 - or 22 percent more.
No. 5: registered nurses. Projected increase, 473,000 jobs.
In 1995, a total of 1.3 million women worked as registered nurses. They filled 91 percent of the jobs. Median weekly pay: $693, or $36,036 a year. Men earned $37,180 - or 3 percent more.
The No. 6 occupation, with a projected increase of 466,000 jobs, is general managers and top executives, and No. 7 is systems analysts, expected to grow by 445,000 jobs. Both are among the higher-paying occupations, and both are dominated by men.
No. 8: home-health aides. Projected to generate 428,000 new jobs.
In 1995, there were 238,000 health aides; 179,000 - or 75 percent - were women. Their median weekly pay was $285, or $14,820 a year. Men earned $17,940 - or 21 percent more.
No. 9: guards, another male-dominated, low-paying field. Projected growth rate, 415,000 jobs.
No. 10: nursing aides, orderlies and attendants. Projected jobs, 387,000.
A total of 1.2 million people worked in this field in 1995. Eighty-nine percent - 1.1 million - were women. Their median weekly pay was $275, or $14,300 a year. Men earned $17,212 - or 20 percent more.
To summarize:
Six of the 10 occupations that the U.S. government says will provide the largest number of jobs for America's high-tech future are in fields paying women annual wages that would qualify a family of four for the earned-income tax credit. Meaning they are working poor.
FACTORY JOBS FOR LITTLE HANDS
It wasn't always this way. There was a time when the American economy offered reliable employment to women outside the service industry - permanent jobs, with benefits. Many of these jobs were in factories.
While manufacturing is traditionally thought of as a male bastion, women dominated the assembly lines in a wide range of industries where sewing, fastening, connecting, sorting, collating and processing were at the heart of the work. Because those were considered labor-intensive tasks, such industries were among the first to move offshore to cheaper labor markets.
Betty Lizana worked in such a business - the wire-harness industry.
The name may mean little to you, but wire harnesses are one of the most common and indispensable items of everyday life. They range from the complex circuitry in the electrical system of your car to the power cord that connects your refrigerator to an outlet.
Since 1990, wire-harness factories have closed as corporate executives moved production to low-wage countries or lost business to competitors who had made the move.
National Industries eliminated the jobs of 370 workers who made automotive wire harnesses in Union Springs, Ala. In Wabash, Ind., 550 workers who made automotive wire harnesses for United Technologies Corp. were fired.
About 300 people lost their jobs at General Dynamics Corp. in Fort Worth, Texas, where they made aircraft wire harnesses. Circuit Wise Corp. eliminated 45 jobs in New Haven, Conn.
In many cases, companies have relocated operations to Mexico, particularly along the U.S.-Mexico border.
Most of the jobs that have left the country were held by women.
"A man's hands just will not fit in the places they have to go to assemble a wire harness," says Patricia Wilbanks, who managed a wire-harness plant in Biloxi, Miss.
Wilbanks worked at the Fleck Inc. plant with Betty Lizana, before the work was moved to Mexico.
There is one other reason this field attracted fewer men: The wages were lower.
"They are not going to get a man to do what is involved for the pay," Wilbanks said. The pay for female production workers at the Biloxi plant, she said, averaged just over the minimum wage - about $5 an hour. Mississippi traditionally has lower wages than the rest of the country, but even $5 was more than Fleck wanted to pay.
Plant closings affect both men and women, of course. But they are often harder on women, Wilbanks believes.
"Most of the time the men can move their families to where the job is," she said.
"A woman is not so willing, and a lot of times, if she is married, she is not going to be able to because her husband has a job. She can't just pack up and move her family unless she has a very understanding husband."
Wilbanks faced the relocation decision. Fleck offered her a job in a company plant in Mexico near El Paso, Texas. But she was reluctant to move. As a single mother raising a young son, she did not want to face the daily anxiety of being separated from her child by the U.S.-Mexico border.
"If anything happened and the border closed, and I'm on the Mexican side, what do I do?" she said.
So she stayed in Mississippi. For months, she looked for work, eventually finding what she described as a "pay-nothing" clerical job. Finally, she found her current job, as a secretary. At Fleck, she earned about $35,000 a year; today she earns $14,000.
Both Wilbanks and Lizana were asked their reaction to news accounts of a vibrant economy that is creating millions of good jobs.
"People wonder where they are getting [that] information," Lizana said. "There just are no jobs. One of the construction companies building a casino advertised for 25 positions. . . . There was a huge traffic jam, people showing up to apply for those jobs.
"People want to work. There just aren't any jobs paying much. There's no manufacturing anymore. . . . It seems like the only people who advertise are Kmart. But sometimes those are part-time jobs and they don't pay much, either."
As Wilbanks sees it, nothing is being done to treat the epidemic of plant closings and job loss. "I think if a lot of the American people realized what was going on, they would quit buying a lot of products," she said.
As for the ability of many middle-class people to continue to earn a solid income, Wilbanks isn't hopeful:
"I know I sound very pessimistic, but I just don't see it happening."
OUT WITH THE UNION
Some 1,200 miles to the north of Patricia Wilbanks and Biloxi, Miss., are Tomasa Kershner and Williamsport, Pa.
Like Wilbanks, Kershner lost her job in a manufacturing plant. And like Wilbanks, she frets about the future, especially for her son, who began his freshman year at Lock Haven State University in the fall of 1996.
"You want your kids to have something," she said. "I think of my son and what's going on and it's all very sad. They want to lower everyone's wages. They want just rich people and little people. There won't be a middle class."
In 1973, Kershner, who now lives in Montoursville, Pa., went to work at a GTE plant in Williamsport, where the company manufactured electronic components for the military. She earned about $3 an hour, or nearly twice the minimum wage at the time.
Twenty-one years later, in December 1994, she was making $11 an hour - but that was soon to come to an end.
Kershner's troubles began in early 1993, when GTE sold its North American lighting division to Osrams Sylvania. The company was interested in GTE's lighting-products plants, not the defense-related facilities. So in September 1993, several former GTE executives acquired the Williamsport plant and renamed the business Primus Technologies Corp.
At the time, the company's contract with the International Association of Machinists union, of which Kershner was a member, had about a year to go.
Kershner recalled what happened:
With the contract due to expire in December 1994, the union sought to continue to work under the old agreement. But the new owners presented a take-it-or-leave-it package that called for a 30 percent wage cut (to $8 an hour for Kershner) and a 25 percent increase in health-insurance payments.
Out of 53 employees, 13 went back to work under the new contract terms and 40 struck the plant. Primus hired replacement workers, and the striking workers picketed from Christmas 1994 until March 1996.
At one point, Primus offered to put the striking workers on a preferential hiring list for new jobs that would pay $6 an hour.
"At $6," Kershner said, "you can't make it. They want the wages down, but your utilities keep going up. Taxes are going up. None of the prices are coming down. There's got to be a reason for this."
Then she answered her own question: "I think it's a lot of greed."
Except for a stint as a temporary postal worker at Christmas 1995, Kershner's support for 16 months came from walking a picket line - $100 a week - and from her husband's earnings. Her $100 a week ended in March, when the union ceased to exist at Primus.
Kershner spent months looking for a job that paid more than the minimum wage. "It really takes two people, with the bills we have," she said. Finally, in April 1996, she found work that matched what she earned at Primus - for one day a week.
As a substitute rural postal carrier, she delivers mail on Saturdays and whenever the regular carrier is ill or on vacation. In the meantime, she continues the search for another job.
"I'm trying to find part-time [work]," she said, "where they would be flexible to my schedule" with the Postal Service. "Sometimes, they call you the day before" to deliver mail.
In small towns and medium-size cities, the options of out-of-work people are limited. In that respect, Williamsport, a central Pennsylvania city that became famous as the home of Little League baseball, is typical.
There used to be plenty of jobs. Back in the 1950s, Williamsport billed itself as "the Main Street of industry and distribution in the United States." The city boasted 111 manufacturing plants employing upward of 15,000 people.
That was then. This is now. Widespread plant closings and layoffs have blighted the town.
Between 1960 and 1990, according to U.S. Census data, nearly half of Williamsport's manufacturing jobs disappeared, and its population dropped from 42,000 to 31,900.
Factory employment fell from 6,171 to 3,340. Men were hardest hit, losing 2,190 jobs. Women accounted for 641 of the layoffs.
More significant, the overall number of jobs in town held by men plunged 31 percent, from 9,874 to 6,850. Jobs held by women edged up 1 percent, from 6,097 to 6,168. As a result, by 1990 women made up 47 percent of the workforce. That was up from 38 percent in 1960.
As in many places where manufacturing died, women became the breadwinners. Invariably, the jobs were at lower pay than the men had made.
Since the 1990 census, jobs, especially jobs that pay well, have continued to disappear in the Williamsport area.
C.A. Reed Inc., a manufacturer of paper and party products - crepe paper, napkins, paper hats and plates - closed, throwing 325 people out of work. They had earned $10 to $15 an hour. Sylvania closed two plants that made flashbulbs and electrical components. About 500 jobs were eliminated. Stroehmann Bakeries closed its main plant, putting 120 people out of work.
The list continues. Erman Ryveld's Son Corp., 160 workers. High Steel Structures Inc., 136 workers. Footwear Temps Inc., 130 workers. Wundies, 210 workers. Woolrich, 340 workers. Philips ECG, 48 workers. Tampella Power Corp., 120 workers. Muncy Building Enterprise, 79 workers.
With few exceptions, the surviving companies are not hiring or don't pay comparable wages. Kershner says that former Primus workers have found jobs, but "not good-paying jobs - minimum-wage jobs."
And what about those still working at Primus for $6 an hour?
"I talked to one of our ex-union members that still works there," she said, "and he told me a lot of these people also have a second job. . . . That's the only way you can make ends meet.
"It's really sad that people don't realize, yeah, you can create jobs that pay $6, but you can't live on that. You can't."
Richard Hritzko has watched, on a much broader scale, what Tomasa Kershner has experienced. He's the director of the Job Training Partnership Act in Williamsport, which provides training for displaced workers.
"The majority of the jobs we have lost have been the well-paid jobs," Hritzko said. "What's available for people are jobs starting out at minimum wage. We lost a lot of good, skilled jobs. These were secure jobs. The people were hired right after high school.
"It's hard to tell them, when they were making $15 an hour, not to turn their noses up at $7. And that's sad. Many of the jobs are service-oriented, computer and lower-paying. And they are competing with graduates right out of high school."
While manufacturing jobs have dried up in Williamsport, employment in one other occupation has soared, shooting up from 142 workers in 1960 to 879 in 1990.
It's the food-service industry - waiters and waitresses, cooks, busboys. The pay is usually minimum wage or slightly above. And most of the workers are women.
THE COLLAPSE OF APPAREL
Among the Williamsport-area shuttered plants were two operated by Woolrich Inc., the sportswear manufacturer. Jobs eliminated: 340.
It's a story that has been repeated hundreds upon hundreds of times over the last two decades, as one apparel manufacturer after another shut down when production was moved offshore.
What sets apparel apart from other industries devastated by imports is that most of the casualties are women.
From 1973 - the peak employment in the apparel industry - to 1995, the number of jobs held by women plunged 39 percent, from 1.158 million to 702,700.
That was the equivalent of wiping out every woman's job in Miami, Charlotte, Cincinnati, Pittsburgh, Milwaukee and Portland, Ore.
As with other industries, the people in Washington said it couldn't happen, that domestic companies would survive the waves of imported clothing.
That was the view that prevailed in 1987, when some apparel-makers sought, unsuccessfully, to curb the rising volume of imports. During a congressional hearing, Rep. Philip M. Crane (R., Ill.) said:
"There was a loss [in] 1986 over 1985 in the apparel industry of approximately 10,000 jobs. But that is certainly not an indication of a severe dislocation and I would suggest that the industry . . . has already come out of its worst plight . . ."
Since Rep. Crane dismissed concerns over a 10,000-job loss, 12 times that number of jobs have disappeared.
Across the country, women were interviewed who once worked in apparel factories - in cities and small towns from Pennsylvania to Mississippi, from Virginia to California.
They talked about the work, which was always hard. They talked about production schedules, which were difficult to meet.
But they were a community inside those plants. And the pay, while not great, was steady. The benefits, while modest, at least assured them that their families had health coverage.
One by one, these plants are closing. The roll call reads like a Norman Rockwell review of small-town America.
In Linden, Ala., Linden Sportswear eliminated 250 jobs. In Wynne, Ark., Reltoc Manufacturing Co. fired 250 workers. In Conyers, Ga., USA Enterprises laid off 450 workers who made men's pants. In Lancaster, Ky., Cowden Manufacturing Co. let go 1,370 workers who made denim pants.
In Federalsburg, Md., Fed Sportswear discharged 90 workers who made ladies' sportswear. In Ruleville, Miss., Noel Industries eliminated the jobs of 500 workers who made jeans. In Albemarle, N.C., J.E. Morgan Apparel cut the jobs of 225 workers who made underwear. In Temple, Okla., Haggar Apparel Co. eliminated the jobs of 200 workers who made men's slacks.
The closings affect everyone in the industry, from those who have spent a lifetime sewing to those who have worked their way up to management.
Until 1992, Linda Crane was the manager of a 150-person apparel plant in the Mississippi town of Fulton, population 3,500. Today, she is a nurse at a 130-bed nursing home.
Crane spent 11 years at the Denton Mills plant in Fulton.
Maker of Dr. Denton sleepwear, a familiar name to generations of parents, the plant was one of a half-dozen the company operated in the South.
Crane, who started in production, moved up to personnel manager and was named plant manager in 1989. Along the way, she and her husband, Roger, a social studies teacher, raised a son and a daughter.
For many years, the plant provided dependable jobs for women in the Fulton area. But over time, Denton Mills found itself fighting a losing battle as low-cost imports - coming in under Washington's open-door trade policies - began overwhelming the market.
Even wages in Mississippi, the nation's poorest state, were no match for cheap foreign labor. To cut costs, the company opened two plants in Mexico in the 1980s and shifted work there.
By 1990, Crane sensed that her plant's days were numbered. More and more work was being transferred to Mexico.
The company didn't tell employees its plans. "But it didn't take anybody with a high IQ to figure out that something was fixin' to happen," Crane said. "And I said, `We better get our ducks in a row because I've got a feeling they're [going] to close this place down.' "
Crane began to explore her options. She always had been interested in nursing, and that was a field the federal government was touting as a future source of jobs. To see if she had any aptitude, she took a night-school class in anatomy and physiology.
When she talked about resigning to go to school full-time, a company manager prevailed on her to stay.
It soon became clear why. The company would close the Fulton plant soon, and, as Linda Crane later saw it, "did not want to have to worry about replacing me with another plant manager."
When the shutdown came in early 1991, it was too late for Crane to be admitted to nursing classes.
"They had 500 applicants that spring," she recalled. "They take in only 125. Here I am. I've lost my job to foreign imports. I've got a federally funded program that will send me to school, and I can't even get in a program in my county."
She enrolled in the next-closest community college, which was in Hamilton, Ala., 35 miles from her home in Golden, Miss. For 15 months, Crane commuted 70 miles daily. She received unemployment pay, but it barely covered her expenses.
"The hardest time was while she was in school," Roger Crane recalled. "All that expense and on that little income. It was tough."
But she stuck with her plan, and in November 1992, she graduated from nursing school. The following January, she took a temporary job at an Alabama hospital. Two months later, a nursing home nearby called and hired her to work the 11 p.m. to 7 a.m. shift.
Linda Crane has made the transition to a new career that many Americans are having to make these days. She likes the new job. But the family has lost ground financially.
As a midlevel manager, she earned more than $30,000 a year. Her first job as a nurse paid $6 an hour - about $13,000 a year. Gradually, her pay rate has gone up to $12 an hour - still less than what she earned five years ago.
Though she and her husband have adapted, they worry about the future. The transfer of jobs out of the United States, they fear, is undercutting middle-class America.
"I don't begrudge anyone in Mexico getting work," says Linda Crane. "But what is it doing to us? We have got to make a good wage to pay our own bills. I feel for the Mexican people, but we have to think of ourselves, too."
"It's not our fault the cost of living is as much as it is," says Roger Crane. "I can't help but wonder: What are people going to do?"
AT THE TOP, A WINNER
Not all women are losing ground in the apparel industry. Some are making quite a nice living.
Like Linda J. Wachner. She's the 50-year-old chairman of the board, president and chief executive officer of Warnaco Group Inc., and chairman and CEO of Authentic Fitness Corp.
The New York-based Warnaco Group designs, manufactures and markets women's intimate apparel, including such brand names as Warner's, Olga, Valentino Intimo, Calvin Klein. By its own reckoning, the company accounts for 30 percent of all bra sales in the United States. It also sells a range of menswear, including shirts by Hathaway and Chaps by Ralph Lauren.
Authentic Fitness, based in Commerce, Calif., designs, manufactures and sells swimwear and active-wear under the Speedo, Catalina and Anne Cole brand names, among others.
Many products sold by Warnaco and Authentic Fitness are manufactured abroad. Warnaco operates its own plants in Mexico, Honduras, Costa Rica, the Dominican Republic and Ireland. Both subcontract production to other companies overseas.
Consider a sampling from U.S. Customs records reporting foreign shipments to the two companies for May and June 1996. These are shipments of clothing to be sold in the United States:
Men's cotton shirts from Dubai, the United Arab Emirates, and shirts from Alexandria, Egypt, arrived in New York. Head straps from China, ladies' silk panties, and cotton knit panties from Hong Kong arrived in Seattle.
Men's jackets from Colombo, Sri Lanka; silicone swim caps, garments and Olympic thongs from China; Speedo sunglasses from Kaohsiung, Taiwan; garments from Jakarta, Indonesia; garments from Singapore; woven jackets from Hong Kong, and ready-made garments from Taipei, Taiwan, all arrived in Oakland.
So how goes the apparel business? For the years from 1993 to 1995, Warnaco reported revenue of $2.4 billion and profits of $134 million.
Its U.S. income tax payments, according to reports filed with the U.S. Securities and Exchange Commission, came to about $10 million, giving Warnaco an effective tax rate of 7 percent.
Which means that a company with annual sales approaching $1 billion paid federal income taxes at a rate below that paid by families with incomes between $25,000 and $30,000.
You might want to view Warnaco's low tax bill from another vantage point - the pay of its chief executive.
Linda Wachner's salary and bonuses for the years 1993 to 1995 added up to $11.4 million - or more money than the company paid in U.S. income tax.
That does not include stock options and other stock deals. In 1995, for example, Wachner received a salary and bonus of $4.8 million, plus $6 million in stock, for a total compensation package of nearly $11 million. Her stock holdings in Warnaco and Authentic Fitness in 1996 were worth upward of $200 million.
At the same time that Wachner's take-home pay soared into the millions, her company reduced the take-home pay of the workers at one of its plants.
In May, Warnaco announced it intended to close the plant in Waterville, Maine, where Hathaway shirts have been made for more than 150 years.
The closing stunned workers. Michael Cavanaugh, an official of the Union of Needletrades, Industrial and Textile Employees, which represents Hathaway employees, explained why:
"The amount of production went up from an average of 2,000 dozen a week to 3,000 dozen a week and the cost of that production went down almost in half [through 1995 and until May 1996].
"So there was some rather remarkable productivity improvements. . . . That was one of the major reasons why people were so shocked when this announcement came, that, you know, `Thanks very much, but good-bye.' "
Of the 450 people who work at the Waterville plant, about 90 percent are women - many single mothers. Their average pay is $8 an hour. That's $16,640 a year.
The $16,640 is based on a 40-hour week. After Wachner said she would keep the plant open until an investment group could be formed to buy it, she cut the workweek to 30 hours.
That's $12,480 a year - which not only qualifies families for the earned- income tax credit but places some below the government's poverty level.
Whatever number you pick, $12,480 or $16,640, think of it this way:
Linda Wachner's nearly $11 million compensation package for 1995 exceeds the total wages of the 400 women workers at her Waterville plant.
Research help was provided by Bill Allison. Also contributing to the research were John Brumfield, Harold Brubaker and Tirdad Derakhshani, as well as Inquirer library staffers Denise Boal, Frank Donahue, Joe Daley, Alletta Bowers, Sandra Simmons and Ed Voves.
Copyright 1996 PHILADELPHIA NEWSPAPERS INC.
May not be reprinted without permission.
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