Unions Made Detroit and America--They Shouldn't Pay For Execs Mistakes
Yesterday, I posted a dairy about the right way to bailout the auto industry. I have no issue with those people who disagree with the basic premise that we should bailout the companies. But, in other places where I posted this and generally out there in the ether, there was a shocking level of ignorance, disinformation and disturbing attitudes about the UAW, its members and, generally, about unions. Let me try to set the record straight, though I know that readers here are probably hip to these arguments.
There seems like a self-hatred phenomena running amok in America that goes something like this: those "highly-paid" UAW members have life too good and are the reason the auto industry is tanking. For the good of America, they should take it in the chin and give up that "gold-plated" life style.
Answers:
- If you believe in the standard of living promoted by the Waltons, not Ma and Pa Walton, but the Waltons of Bentonville, then, sure--a Wal-Mart wage of $10-an-hour, pathetic health care and no pensions is a blueprint for the future. You and your children can live that life. I'm not on board.
- Here is what the so-called "highly-paid" UAW worker gets. An assembler earns an average of $20-an-hour, a skilled trades worker earns about $32-an-hour. And they get health care coverage and pensions. The pension, by the way, is about $35,000-a-year IF you worked a full 30 years. But, if you retired early--which many workers did because that work is a whole lot harder than typing away at a keyboard and spewing invective--the pension is about $20,000-a-year.
Again, that looks "generous" by today's standards. But, pause a moment and think: is that the standard of living we consider "gold-plated"? That people should have health care, a pension and a very modest income when they work and an even more modest income when they retire?
- There is also the right-wing meme that is shocking to hear from people who call themselves "Democrats"--UAW workers are lazy and unproductive. I'm going to guess that a total of ZERO people who regurgitate that nonsense have spent ANY time in an assembly plant. You are simply, shamefully, repeating the same right-wing nonsense that attacks government workers. Actually, auto plants--like the rest of the workforce--have been extremely productive but that productivity doesn't translate into sales, or wages, for reasons that are entirely separate from how hard the workers sweat.
- I guess you have gotten your wish, in one sense: UAW workers have already given up a lot over the years to pay for the mistakes of the auto executives and our broader national policies (mainly, our stupid trade policies). The Big Three have eliminated tens of thousands of jobs, pushing out people with buy-outs of about $140,000--taken because the other threat was not having a job at all--so now those folks can put in an application for a job at Wal-Mart. The deals struck with the auto companies last year introduced a lower-wage tier for newer workers. To replace those workers, Ford, for example, is offering starting wages at $14-an-hour. Yes, that's higher than a Wal-Mart wage. Terrific.
Or take this example: The UAW had to strike American Axle because the company wanted to cut wages to $10-an-hour. After an 87-day strike, the company was successful--cutting the wage to really a poverty-level wage or forcing people to take a buy-out. Oh, the CEO, Richard Dauch: his salary and bonuses equaled $30,957,693. That's not including stock options that bring him millions more.
- This is also about race. I'm going to guess that most of the people who are attacking union workers are white. Why? Because African-Americans wouldn't do so. They know that they are being hurt most by the decline in manufacturing--and the elimination of union jobs, as I pointed out here.
- The UAW actually tried to save the industry from its poor management in last year's negotiations by agreeing to take on the responsibility of managing the health care liabilities. The union agreed--I would argue, at great risk--to set up voluntary employees beneficiary associations (VEBAs) to manage the health care funds. The companies were supposed to transfer billions of dollars to those funds. That ain't happening now.
- Fact is the auto companies are competing against companies based in countries that have national health care systems. The UAW has consistently argued and pushed for--going back to Walter Reuther--for universal health care. And the auto industry stood shoulder-to-shoulder with the Chamber of Commerce and opposed such a system. That isn't the fault of the UAW.
I guess how you see this problem is partly a function of your world view. The auto industry in the U.S. is actually adding jobs. The problem is, in my opinion, that those jobs are NON-UNION and are being added in the South, mainly at the "transplant" companies i.e., Japanese and German manufacturers. I don't think that non-union jobs at low labor costs and substandard pensions are a good think for the future of this country, and the world. But that is precisely what people are essentially arguing for when they rant against the "gold-plated" UAW living standards.
I see union jobs as not just a pocketbook issue but a justice issue--and I don't think that people who attack UAW workers quite see how they are also attacking minorities and women, who benefit in particular from union jobs. You can repeat the right-wing meme about lazy workers, but the facts show that isn't true. The UAW, and other unions, are the main reason people are not in poverty (it ain't the minimum wage, which is a poverty-level wage).
Some people trot out the argument that, well, that's life in the "free market" and "a global economy". To which I reply:
- The "free market" has really worked out great, hasn't it? Airline de-regulation, savings and loan debacle (which seems like ancient history), the technology bubble implosion and now the newest grand experience, the financial crisis of 2008, which, oh, thank you "free market", wiped out trillions of dollars in value--devastating millions of people who put their faith in the "free market" and now are looking at a pretty frightening retirement.
- Globalization isn't a natural phenomena. It's about rules that we set. Right now, those rules are simply about one thing: finding the lowest wage possible. Those rules are often set by dumb trade deals but, yes, they are often set by the "free market". But, guess what? We have the right to change those rules, to set minimum global standards about wages and rights. Is that an easy task? Nope.
But, I'm sorry. I don't accept the alternative: a non-union world where the glorious "free market" defines the future for our country and the rest of the world. And I don't believe most people do, either.
Comments
Do facts matter?
The actual hourly wage of assemblers for the Big Three is $28-$29 an hour, not $20.
And the total compensation is upwards of $75 an hour.
See this link:
http://www.cato-at-liberty.org/2008/11/13/a-cancer-on-the-big-three/
By most people's reckoning, total compensation of $75 an hour, 32.5 hours a week, 52 weeks a year --that's about $127,000 a year -- in a relatively low-cost state like Michigan for relatively unskilled labor could be a real problem for a business's competitiveness.
True, much of that compensation goes down a UAW rat hole and is never seen and never will be seen by the workers who are "compensated," but that doesn't mean the Big Three don't really fork over the money.
In Tasini world, I guess only wages (roughly 70% of actual wages), and not total compensation, count. After all, it's much more difficult to be self righteous and polemicize if you take all of the relevant facts into account!
Stan Greer
National Right to Work Committee
National Inst. for Labor Relations Research
Re: Do facts matter?
Please tell me how to get one of these $75/hour jobs. I could really use one.
Union wages not as inflated as made out to be
UAW members are actually losing their edge against foreign automakers. From the Detroit Free Press, February 2007:
"Workers for foreign automakers don't pay union dues, but they do share the costs of insurance and retirement plans. UAW-represented autoworkers get health insurance and a full pension after 30 years -- valuable perks they will fight to keep during contract negotiations this year.
But even accounting for Toyota employees' health care spending -- $700 per year on average, according to the company -- the [Toyota] Georgetown workers still made more in 2006.
General Motors Corp., which lost $10.6 billion in 2005 and didn't issue profit-sharing checks last year, paid its production workers an average of $27 an hour, GM spokesman Daniel Flores said. That would be a base of about $54,000 a year, based on a 2,000-hour work year. The $30 average at Toyota's Georgetown plant, which includes a bonus, equals $60,000 a year.
Ford Motor Co. and Chrysler Group representatives said GM's base pay figures are similar to theirs. Only Chrysler, which had a 2005 profit, paid a bonus last year. The $650 bonus was not enough to surpass Toyota's pay. [...]
Assembly workers for Detroit automakers last year remained a bit ahead of Honda's U.S. hourly workers, who made an average $24.25 an hour, or $26.20 with the $4,485 bonus they received. In November, Honda paid bonuses for the 21st consecutive year, the longest streak in U.S. auto history, said Ed Miller, Honda spokesman.
Nissan workers are paid $24 an hour in Mississippi and $26 an hour in Tennessee, but company officials would not disclose employee bonuses.
Hyundai Motor Co. pays its U.S. production workers less than other automakers. Wages at its Alabama plant start at $14 an hour and grow to $21 an hour after two years on the job, according to a January 2004 company release. Hyundai declined to say whether those wages have increased since then."
However...
Under the contract negotiated last year, new union employees will make considerably less than the figures above, some as little as $14 per hour, under a new-tier wage structure. Benefits have been reduced too.
The Big 3 have been shedding jobs by the tens of thousands and their average wages are falling as a result. They still have their legacy obligations - which were rightfully earned and should be honored - but the foreign automakers still have an edge in that area because they haven't been around long enough to have retirees on their books.
As for the comment that low-skilled workers are making these wages, then I say people making those comments haven't worked on today's assembly lines. Many of the workers have associate's or bachelor's degrees and it takes reasoning skills and awareness of the product they're assembling to do their jobs properly.
Regardless of their skill level, people earning $50 or $60 thousand in today's economy are not rich by any stretch of the imagination, especially if they have families. In all 50 states, the monthly child care bill for two children is higher than median rent payments and as high or higher than a mortgage.
Let's correct all mistakes
You say workers should not pay for management's mistakes. One of the mistakes they made was to let total labor costs climb to above $70 per hour. Why should it be forbidden to correct this mistake and the government pay to perpetuate it?
I should add, a union that signed on a dual wage system is not worthy of respect or seats on boards of directors.