How an American Family Raised on GE Wages Copes With Income Inequality
Kathleen DeSisto has a good job, a house, four kids and, as she affectionately puts it, “a man-child” at home, a husband who is also gainfully employed as a manager at a club in downtown Boston. But she’s uneasy.
That’s because she sees a way of life disappearing, one that rewards skilled blue collar workers like her with good careers and a comfortable retirement. General Electric Co. has provided her family members and residents of Massachusetts’ North Shore with that kind of employment for generations at a massive plant that manufactures aircraft engines. But in the last several decades, that social contract has been upended at GE and at many other companies across the country.
A machinist, DeSisto had just finished her shift when she joins her father in the boardroom of the union hall, her hair streaked red and arms ablaze with tattoos. “They’re trying their best to get rid of people like me raised by a man like him, who will fight to keep my union so I can protect my co-workers and protect my family,” says DeSisto.
Her father, Wayne McCaul, though soft-spoken, shares his daughter’s fire. It flares up when DeSisto mentions wage concessions that the union local agreed to for new hires in 2016 in an effort to keep jobs in Lynn. According to that contract, a skilled machinist who started in 2015 would make $37 an hour, but one who started on that job just two years later would make only $25.50 an hour and have to wait 10 years to progress to the pay level of her more senior co-worker. A union contract revision in 2019 shortened that wait to seven years. At the time of the 2016 agreement, Will Danzinger, GE executive and general manager of the Lynn plant, said in a statement that the agreement would improve the “company’s ability to compete for work.”
“It’s insulting,” says McCaul, who retired from the River Works plant five years ago. He wears a Red Sox cap, and his union jacket is slung over his chair. McCaul came of age when the social contract between labor and management was strong, back when, he says, GE feared losing skilled machinists and welders to other firms. But since he joined the company in 1968, GE has led the way in offshoring jobs. GE has told the Boston Globe that it has hired 500 people since 2017, but that hiring has not kept pace with attrition, according to IUE-CWA Local 201 President Adam Kaszynski.
There is another McCaul who is not in the room on this windy day in April but whose presence is keenly felt: that of DeSisto’s older brother, Kevin. He’s a machinist like his sister, and he has tried for years to get in the door at GE. From his home in Sanford, Maine, Kevin McCaul, who is 51, describes that winding journey as “nothing but misery and heartache.”
The McCaul family’s trajectory traces the rise and tumble of the American blue collar worker, who thrived in the middle of the last century only to be beset by layoffs and wage concessions in recent years. The elder McCaul went to work for General Electric when U.S. manufacturing employment was near its pinnacle, employing more than 18 million people.
“GE literally ran schooling,” McCaul, now 70, remembers, and he took advantage of his opportunities. He started at the firm after high school, working as a “trash collector,” cleaning metal scraps from the base of machines. When he retired in 2016, he was earning “around $70,000” a year and working in one of the highest-rated inspection jobs in the plant.
His son, Kevin, had the misfortune to graduate from trade school in 1987, when GE’s then-CEO Jack Welch was at the helm. A onetime hero to Wall Street, Welch was dubbed “Neutron Jack” by the media for the way he left buildings standing but cleared them of their occupants. “Nobody…chopped deeper or faster than Jack Welch,” writes Rick Wartzman in The End of Loyalty: The Rise and Fall of Good Jobs in America. (Wartzman sits on the board of this publication.) “By the early 1990s, nearly 170,000 jobs had been lost at GE due to layoffs, attrition and other cuts—most of them by 1986.” Welch led the way in trying to create a leaner, and as he saw it, more nimble company workforce. But his cuts were also part of a larger corporate trend brought on by globalization, technological change, a declining labor movement and a dramatic shift in corporate culture away from loyalty to people and place and toward delivering ever larger returns to shareholders.
Nevertheless, his decisions and those of his successors have an impact on Lynn, a town whose craft tradition extends back to the 19th century, when it was a major center of shoemaking. In 1951, GE employed 24,000 people in Lynn, according to Kaszynski.. Today, 2,500 people work at the plant and about half of them are members of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America (IUE-CWA) Local 201.
Back in 2007, the River Works plant had lost enough of its workforce that it was hiring again, and Kathleen, then in her late 20s, was able to follow in her father’s footsteps. Now she earns more than $35 per hour. She owns a home in Beverly, a nearby suburb, which she purchased for $326,000 eight years ago. She has a pension. Like her father, she has four children and a household that is supported by two incomes. Still, between her monthly mortgage, her health insurance premiums and car payments, she’s unable to save. She blames no one but herself for her struggles.
“I chose to buy a house in Beverly. I chose to have four children. I chose these things. Do I blame society for my issues? It’s just you can’t have these things and not work your ass off anymore.” That feeling that life is more expensive than it was for the previous generation is reflected in a RAND Corporation study published last year. A worker in the 75th percentile of the earnings distribution – who makes $80,000 per year – would be earning 33% more than they are now if wages had kept pace with productivity growth over the past four decades, according to the study. In other words, DeSisto’s current salary of $70,000 should be closer to six figures.
What does that really mean? Perhaps that in this alternate reality put forward by the RAND researchers, DeSisto’s life would feel more like her father’s. He bought his Lynn home in 1973 for $25,000, which would amount to just under $160,000 in today’s dollars. Her parents were able to purchase a vacation home and a boat in Maine, and as DeSisto remembers it, two nice cars.
But if DeSisto, who is 41, feels financial stress, she also knows she’s privileged compared to many in the workforce, including those hired at GE after the 2016 contract went into effect. She worries for her co-workers and for her children, the oldest of whom is 19. She doesn’t recommend any of her four children work at the plant. “Why would I put my kids in a place where there is no future?” she says.
DeSisto’s uneasiness is felt more broadly in Lynn and across the nation, even with bipartisan support for rebuilding America’s industrial base.
DeSisto’s union has joined with Lynn business and community groups to form the New Lynn Coalition, which is campaigning to keep jobs in the city. Last month, the coalition published a full-page ad in the Globe that accused the company of offshoring jobs at the expense of factories in Lynn and Schenectady, N.Y. Local businesses have posted signs in their windows that read, “Love us, don’t leave us!” In early May, IUE-CWA members cheered when shareholders rejected a $230 million compensation package for GE CEO Larry Culp in what Reuters described as a “rare rebuke” of a top executive. It seemed to mark a potential turning point at GE, which has a record of paying its executives exorbitant sums while its shareholders lose money.
General Electric has told the Globe that it has no plans to shut down the plant or to change the head count at the Lynn plant and that the company was shifting some work overseas to be closer to military customers. The national contract expires in 2023.
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Things have turned out differently for Kevin McCaul than for his sister. When he was in his early 30s, he gave up on living in Massachusetts and headed for Maine. GE was not hiring, and the assembly jobs he found were not enough to keep him on the North Shore. “I didn’t want to be in the city anymore,” adds McCaul, who wanted to raise his young children in more rural surroundings.
In all, he has held 11 jobs, including working in assembly on a Target loading dock and as a machinist at several small shops, work that’s paid the bills but hasn’t allowed him to move forward. Even from afar, he never gave up on his dream of working at General Electric’s River Works plant. Five years ago, he returned to school to update his computer skills but was turned down for a job at the plant in 2019, although he managed to land a couple of interviews. “It was heartbreaking,” says McCaul, who never found out why he wasn’t hired. He would have endured a 90-minute commute for the job, perhaps spending some nights at his parents’.
Back in the Lynn union hall, the elder McCaul says he regrets urging his son toward a career at General Electric. “He could have been a plumber or an electrician,” McCaul says. “But I says, ‘No, you’ll go become a machinist.’”
“I viewed it as one of those things our family just did,” says Kevin McCaul. Indeed, his family has worked at the plant for five generations stretching back more than a century to when it was operated by its precursor, the Thomas-Houston Co., which joined with the Thomas Edison Co. in 1892 to form General Electric.
Things are actually starting to look up for Kevin McCaul. Last year, he landed a job at the Portsmouth Naval Shipyard in Kittery, Maine. He earns about $10 an hour less than his younger sister, but his salary goes further in Maine. As a federal employee, he has retirement benefits. This time he hopes to hang on to them. (He depleted his previous two retirement accounts to pay down debt and for car-related expenses.)
In addition, he and his wife, who works in computer programming and IT support, are finally in a position to buy a house, a milestone he will reach almost three decades later in his life than his father did. “I was almost in tears when I got the notice from the bank that we now have lined up the credit,” says McCaul.
In mid-May, he had an offer accepted on a small three-bedroom Cape Cod-style house in Waterboro, Maine, a 25-minute drive from his parents’ summer house in Standish. “Things are looking up,” he writes in a text.
At least for now, his children, both of whom are working and in their 20s, will likely live with him. His daughter works for the school district and hopes soon to be licensed to drive a school bus, and his son works in manufacturing. They cannot afford to move out on their own.
Like his sister, Kevin McCaul is struck by the high cost of living, and he worries for his children’s future. His landlord just raised the rent on their current home by about 70%. “The next generation coming through — I don’t understand how they’re supposed to do this,” McCaul says.