Unions and the Collapse
As this nifty video compilation shows, conservatives have been all over the idea that labor unions are to blame for Detroit’s woes:
My colleague Satyam Khanna observes in response that “unions have repeatedly made concessions to auto executives over recent years . . . AIG, Merrill Lynch, and Bear Stearns did not have unionized workers but still suffered economic collapses.”
I would add that it’s hardly as if German carmakers are operating in the conservotopia of unregulated, union-free labor markets where cars are made by eleven year-olds earning minimum wage. IG Metall is a powerful union, and German autoworkers are well-compensated. What’s more, if you go back a few decades to a time when the “Big Three” were more successful, you’ll see that the UAW contract was actually more generous to the workers back then. The reason for all this is that the car business is, by its nature, a promising field for union activity. Some businesses feature very low profit margins on individual goods, have labor costs as a very large proportion of operating expenditures, or involve few fixed costs. In that kind of business, there’s not much a union can do for a workforce. It can marshal political muscle on behalf of its members’ interests, curtail certain forms of abuse, and provide some services but fundamentally the wage structure of a business like that is set in stone by the underlying realities. But the car business isn’t like that at all. Cars are expensive, high-margin products and labor costs are a relatively small share of the overall cost of making a car. What’s more, a car factory is difficult and expensive to build. Under the circumstances, unions — both in Germany and in the United States (I know just enough about Japanese labor markets to know that I don’t understand Japanese labor markets and won’t comment on the subject) — have historically been able to get a big slice of the pie for their members. But as Detroit has come to have less-and-less pie over the years, the labor slice has gotten smaller and smaller.
Now none of this is to deny that the union contracts play a role in this. On the one hand, there’s the health care angle. But on the other hand, there’s the competition from the Japanese cars. Those cars are, however, mostly made in the USA. But they’re made in “right-to-work” states in the South where it’s essentially impossible to organize a union. And for all the same reason that the car business is a promising venue for union organizing and collective bargaining, it’s also a business where avoiding unionization gives you a big competitive edge. Under the circumstances, it’s extremely difficult for Detroit to compete.
If things had gone differently in the middle of the twentieth century, we would have real national unions in the United States, not this special “no unions in Dixie!” situation. In that world, once foreign manufacturers started to put down roots in the United States there would have been a realistic chance of unionizing their plants. And either unionization or else manufacturer elements to undercut the appeal of union organizers would have lifted up wages. And you would have seen convergence between the wages of American auto workers making “foreign” cars in the United States and American auto workers making “American” cars in the United States. The converged wage would probably have been somewhat less generous (relative to broader economic trends) than in Detroit’s heyday (thanks to increased competition) but higher than what’s currently prevailing in the South. In that world, Detroit wouldn’t be suffering under a massive competitive disadvantage, workers would be making somewhat more money, and at the margin price points for different kinds of vehicles would be somewhat higher. In my view, that would have been a better world. But instead an alliance between big business and white supremacists kept unions out of the south and made the world we live in today.
Now obviously reflections on this sort of thing can’t produce an answer to the Big Three’s problems (or UAW’s) in the short run. But to me it highlights the importance of things like the Employee Free Choice Act that will make union organizing viable again. We need a world in which when someone comes up with a smart business idea (let’s build Toyota’s in the United States!) that creates a situation in which a union could be beneficial to workers, that we have a realistic shot at unionizing the new business. Otherwise, you get what we have here, where the future of the labor movement is tightly bound-up with the continued viability of large firms that were organized decades ago. But over the long haul, the economy is bound to be in flux with the fortunes of individual firms waxing and waning over time. Employment is going to shift hither and yon. And we need decent, high-wage jobs to shift hither and yon with them. And a big part of that is making unionization a realistic possibility.
75 Responses to “Unions and the Collapse”
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November 18th, 2008 at 9:19 am
Do you know if non-union employees really make less than equally productive union employees? In Canada, Japanese auto plants in Ontario pay about the same as American auto plants. The presence of the union at GM forces non-union Toyota to pay more.
November 18th, 2008 at 9:20 am
It’s lizard brain time now. The75 year old dream of destroying the UAW is at hand.
This has actually been on the table, the bankruptcy of the big three for a couple of years. If the powers that be in the financial world would have bad talked the three as much as they deserved then they would not have been able to keep borrowing money to keep going. For two years now they have been operating on borrowed money.
The lizard brain was held in check by the fear of the systematic problem the bankruptcies would cause. Now that the system is in collapse it’s time to embrace again their hatred of workers. Make them suffer too is what the lizard brain says, and make sure to shout it loud and shout it proud that they deserve it.
November 18th, 2008 at 9:35 am
(let’s build Toyota’s in the United States!)
Isn’t that more of a “Ronald Reagan made us do it” thing?
November 18th, 2008 at 9:36 am
Since Congress so tightly controls commerce –via expansive use of its power to regulate interstate commerce –why doesn’t a Democratic Congress and a Democratic President pass a national union law that overrides Southern labor laws?
Didn’t they do something like that with the 14th Amendment?
Also, isn’t it about time that the Democratic Party makes it clear to the SMALL Southern economic elites that there’s a price attached to the Republican Southern Strategy?
That they don’t have elderly shitheads like Zell Miller around to cover their ass in the Senate anymore?
The Malign influence of the South has always had its source in small economic elites who use their control of the media to promote a hateful ideology — in various guises — in order to keep their control over the blue collar workers of that region.
The Democratic Party could destroy the Republicans in the South if it simply started explaining the truth to the F0X-Brainwashed people of that region. Started pointing out to those people just how badly they’re screwed by the evil men whose money pumps out propaganda day in and day out. It’s something we owe to our fellow countrymen.
November 18th, 2008 at 9:43 am
But before the Democratic Party unleashes the UAW on the South, it should ask how much of Detroit’s failure to innovate /mismanagement was driven by UAW resistance? Hard for an outsider to judge.
If the fault largely lies with Management, then let Management and the shareholders suffer the consequences for their past stupidity.
November 18th, 2008 at 9:46 am
Thank you for this post. Last night on Anderson Cooper they featured a commenter from the Heritage Foundation and a U of Michigan professor who essentially agreed that the problem with the Big Three was union benefits. No countervailing opinions at all, no note taken of the massive cuts unions have suffered. Schwarzenegger’s comments about Germany’s comparatively lower “benefits” for workers conveniently leaves out the fact that Germany has national health care. Unions are to blame for lack of national health care, just like they’re to blame for the scandalous lack of resources for public schools.
November 18th, 2008 at 9:47 am
Our current economic crisis is the result of the systematic reduction of the security & income of the middle & working class so the uber wealthy can take ever greater profits. It’s interesting that every solution in each particular case is the further reduction of the security & income of the middle & working class. Ya, this will really work well.
November 18th, 2008 at 9:48 am
Note also that any national labor laws you pass won’t work unless you’re willing to raise high tariffs onto auto parts imports. Else, the rich will simply move manufacturing from the South to overseas. The South already has links to parts transhipped via Mexico.
You can’t whack one mole at a time — you have to carpetbomb the fuckers all at once.
November 18th, 2008 at 9:55 am
It’s interesting that every solution in each particular case is the further reduction of the security & income of the middle & working class.
Great point, Eric. And I don’t know about you, but I’m not inclined to buy a new car (major appliance, home) unless I have some sense of financial security. These union-busters need to remember that there are not enough super-rich people in the US to keep the economy going.
November 18th, 2008 at 10:04 am
let’s build Toyota’s in the United States!
Apostrophes are not used in the formation of plurals, Matt.
You sprinkle these spelling mistakes in your blog posts just to irritate us, don’t you?
November 18th, 2008 at 10:10 am
A good counter-example of unions leading to this problem is the three state Boeing strike which just concluded on Oct. 28. Here is a short summary of the financials:
November 18th, 2008 at 10:14 am
Tomj—What’s your point? (Also, what’s your source for that?)
November 18th, 2008 at 10:18 am
“In that world, once foreign manufacturers started to put down roots in the United States there would have been a realistic chance of unionizing their plants.”
Or maybe they would not have put down roots here at all? Isn’t this a distinct possibility? It was hard enough to get them to do so even WITH the union exemptions. I seem to recall that a lawyer named Sandy Berger was instrumental in getting Toyota to buy in. As were serious threats of punitive tariffs.
November 18th, 2008 at 10:18 am
Would you mind saying what a ‘relatively small share’ is? I’m still trying to track down good numbers, but it looks like for GM it isn’t a small number. Which means that cutting labor cost may be a promising place for GM to look for cost savings.
November 18th, 2008 at 10:19 am
On the other hand, the Washington State Teachers Union also wend on strike, delaying the start of the school year by two weeks.
The only one who suffers from a teachers strike are the kids and parents. Administrators get paid the same, the school year ends up being just as many days, but the kids lose holidays and sometimes have to go to school on weekends. Teachers also don’t lose any money during the strike, they know they will work for the entire year.
I have no sympathy for striking teachers.
November 18th, 2008 at 10:19 am
Unions might have had greater success in the south if thy had called themselves “Confederations”. I just could not stop myself.
November 18th, 2008 at 10:20 am
I have no sympathy for striking teachers.
I bet you’d say they have no class!
Oh, I slay myself.
November 18th, 2008 at 10:22 am
I continually hear the whine, “It’s the legacy costs.” We’re talking about health insurance and retirement benefits. The first would be solved by single-payer health care (probably the single best thing that could happen to American businesses at this point,) and the second might then be seen as affordable. (Isn’t it a pension plan, insured by AIG? Anyone know?)
I also hear continually that Detroit built the cars Americans wanted; yet Americans were buying VW’s, Hondas, and Toyotas in great quantities. It seems to me that Detroit was building the cars Exxon and Haliburton wanted; and I’d really like to know why. I suggested it might be because of the portfolios of board members and senior execs on Megan McCardle’s blog, and got a response from a GM flak almost immediately on their ethics guidelines; so they are sensitive. Yet they continually made the decisions to build gas guzzling CO2 spewers; despite war and melting polar ice caps. Even I know that’s a stupid. If they’re getting tax-payer money, we have a right to ask and get an answer to that question.
If I were Sarah Palin, I’d say there’s a giant shill game going on here, I feel like the wool’s being pulled over our eyes. Perhaps to let the bit co’s wrap up the patents on battery technology?
November 18th, 2008 at 10:24 am
We’re talking about health insurance and retirement benefits. The first would be solved by single-payer health care…
I agree. So let’s get single-payer health insurace in place, and then we can talk about letting the auto industry die.
November 18th, 2008 at 10:29 am
Project Yellowstone makes it quite apparent why the unions are fully responsible for the big three’s problems. It is not a matter of how much profit goes to the workers but instead how much control they have over operations. And since the unions felt mass producing cars was better for maximizing labour hours than a business model which favoured technology and small parts production is it really a wonder why we are dealing with over capacity?
November 18th, 2008 at 10:33 am
Schwarzenegger’s comments about Germany’s comparatively lower “benefits” for workers conveniently leaves out the fact that Germany has national health care.
And your comment conveniently leaves out the fact that the automakers most onerous liabilities are post-retirement health benefits. Last I checked, the US has national healthcare for retirees.
But instead an alliance between big business and white supremacists kept unions out of the south and made the world we live in today.
Don’t you think it was in the economic interests of Southerners, black and white, rich and poor, to have Toyota, Honda, and BMW build factories there rather than Michigan or Ohio?
White supremacists? Really? You demean yourself with silly slurs in the middle of an otherwise cogent argument.
November 18th, 2008 at 10:36 am
“But on the other hand, there’s the competition from the Japanese cars. Those cars are, however, mostly made in the USA.”
No, they’re not. They’re assembled in the USA. Assembly is the low-value-added, low-skilled part of the process. (When you put an IKEA bookshelf together, did you “make” it?) The high-skilled manufacturing work for these cars - engines, transmissions, etc, to say nothing of the underlying engineering and design - is mostly done in Japan.
November 18th, 2008 at 10:36 am
I think that from the perspective of assholes like the Heritage Foundation and the movers and shakers at the Chamber of Commerce and National Association of Manufacturers, the best thing at this point would be American workers losing all our health insurance and just accepting it. Bosses seem to have won the fight against defined benefit pensions, which Americans seem to think of now as some kind of odd, luxury benefit retained by a few coddled, organized workers. They’d love to persuade American workers to just get sick and hack it on our own, like we did in the good old days of the late 19th century.
November 18th, 2008 at 10:37 am
The problem of unions aren´t wages, but that´s very difficult to fire workers. Another problem is that Ford and GM could *easily* import cars from Brazil and Argentina, where they produce cheaper and smaller cars(All flex fuel, running both on ethanol and gas). The Prius crowd would love that. Ford has a very nice and cheap SUV called Ecosport that´s they only sell in Latin America and most of their bestsellers in Europe and Latin America(Ford Ka, Ford Mondeo, Ford Fiesta, Chevrolet Vectra, Chevrolet Zafira) aren´t available to the American consumer.
Sure, unions doesn´t want that.
November 18th, 2008 at 10:39 am
Excellent analysis. You’re dead on about the South and the alliance to keep unions out.
EFCA is one of the most important things we need to do.
November 18th, 2008 at 10:51 am
What’s your alternative? Mass resignations?
November 18th, 2008 at 10:56 am
Are the job at manufacturing plants in the South not sufficiently well paid to afford a middle-class lifestyle? (This is a serious question, I have no idea, though I kind of assume that they are decent jobs)
If those factories turn out better products at prices people are willing to pay, and the provide good jobs, it’s hard for me to see how those folks are worse off then the people whose regional economy is on the verge of collapse due to poor business practices, even if they make a nominally lower wage.
November 18th, 2008 at 11:04 am
There’s also the consideration that blue collar workers in this country making $10 to $20 per hour shouldn’t have to pay through the nose for a vehicle –either up front or on maintenance — just to keep a UAW worker in the style to which he is accustomed.
or to let him fight prolonged personality conflicts with management — or to let his alcoholic buddy skate when he comes in hung over and builds a piece of shit.
Gee, this fucking socialism shit is harder than I thought it would be.
Plus the US suffers from the severe handicap of being unable to shoot assholes in the back of the neck when they deserve it.
November 18th, 2008 at 11:16 am
Some perspective: Toyota in Kentucky
It is my understanding that starting wages at Toyota in America are comparable to that of GM under UAW, only that GM has huge legacy costs because their factories have been open for generations.
November 18th, 2008 at 11:22 am
Matt wrote:
once foreign manufacturers started to put down roots in the United States there would have been a realistic chance of unionizing their plants.
The inability of the UAW to unionize foreign-owned auto plants probably has little to do with the southern bogeyman.
The CAW, a UAW offshoot, is the union for GM, Ford, and Chrysler in Ontario. They have never been able to unionize the Honda or Toyota plants in Ontario.
I don’t blame the UAW or the CAW for the big 3 (or 2) bad condition, but lets not pretend that the obstacles to unionizing Toyota in Canada is anything other than the union itself.
November 18th, 2008 at 11:23 am
Silly Matt, conservatopia has no minimum wage!
November 18th, 2008 at 11:29 am
Don’t you think it was in the economic interests of Southerners, black and white, rich and poor, to have Toyota, Honda, and BMW build factories there rather than Michigan or Ohio?
Exactly the kind of race-to-the-bottom question that national laws making it equally easy or difficult to form a union anywhere let us avoid asking. Similarly, it’s in the economic interest of Delaware to let the credit card industry do whatever the hell it wants, but it doesn’t seem to be a good thing for the country that Delaware does that.
November 18th, 2008 at 11:48 am
Schwarzenegger’s comments about Germany’s comparatively lower “benefits” for workers conveniently leaves out the fact that Germany has national health care. Unions are to blame for lack of national health care, just like they’re to blame for the scandalous lack of resources for public schools.
The absence of “national health care” is irrelevant. Toyota and Nissan’s U.S. employees aren’t covered by national health care either. Neither are the employees of any U.S. company that manages to compete successfully against its foreign competitors. The problem has been the absurdly profligate wages and benefits of UAW members.
If the U.S. automakers are to compete effectively, their remaining employees are simply going to have to accept wages and benefits in line with those of foreign automakers’ U.S. employees.
November 18th, 2008 at 11:53 am
Exactly the kind of race-to-the-bottom question that national laws making it equally easy or difficult to form a union anywhere let us avoid asking.
That’s a separate issue. I was reacting to Matt’s suggestion that racism was a bigger driving factor of Southern right-to-work laws than, you know, a desire for job creation.
November 18th, 2008 at 12:01 pm
One of the more fascinating political cons this season is the Reverse-Walmart “One for the Price of Two”.
You’re seeing the same con in this Auto Bailout.
For example, Paulson has everyone –including Matthew –referring to the “$700 Billion Bailout” even though the cost of the Bailout has been $1.5 Trillion. Paulson has managed that simply by splitting the Bailout into two $700 pieces and misleading reporters into thinking he is referring to the “Old” $700 Billion bailout even though he is referring to the “New Additional” $700 Bailout.
Similarly, Matthew and everyone keeps referring to the $25 Billion bailout for Detroit.
But Detroit has ALREADY gotten $25 Billion in loans this fall — what Detroit is asking for is an ADDITIONAL $25 Billion.
The Detroit CEOs are simply imitating Paulson’s cheap Wall Street trick of splitting the giveaways into Tranches. That let’s the Newspapers con the voters while pretending they’re journalists.
November 18th, 2008 at 12:06 pm
See http://biz.yahoo.com/ap/081118/congress_autos.html
“President George W. Bush and GOP lawmakers instead propose diverting $25 billion in loans approved by Congress in September — designed to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles — to cover the firms’ immediate financial woes.
But auto executives, backed by leading Democrats, insist they need ANOTHER $25 billion in emergency loans to avert a collapse of one or more of their companies before year’s end. That would bring the total federal help for the industry to $50 billion this year.”
————
ha ha ha. Read ‘em and weep, Rubes.
November 18th, 2008 at 12:11 pm
But to me it highlights the importance of things like the Employee Free Choice Act that will make union organizing viable again.
The EFCA is a joke. There’s nothing “free” about a process for unionizing workers that exposes them to coercion and intimidation by making their vote known to others.
November 18th, 2008 at 12:21 pm
“There’s nothing “free” about a process for unionizing workers that exposes them to coercion and intimidation by making their vote known to others.”
Gosh, that’s a pretty good description of the status quo. Do you think that unions are better at coercing workers than the people who control the workers’ paychecks?
November 18th, 2008 at 12:26 pm
Gosh, that’s a pretty good description of the status quo. Do you think that unions are better at coercing workers than the people who control the workers’ paychecks?
I don’t care who’s “better” at it. The only way to ensure that the choice is really free is vote by secret ballot, and the EFCA precludes that.
November 18th, 2008 at 12:35 pm
One more time: automakers don’t pay wages and benefits. Car buyers do. The automakers are just the middlemen in the operation. As long as consumers have choices, they’re not going to subsidize “legacy” benefits with their car purchases. Higher wage unionized factories sound very humane and compassionate until it is remembered that in the end its the car buyers, not the companies’ shareholders, who pay for them.
I favor bailing out Detroit but only if the UAW agrees to give up its absurd “legacy” pension & health care benefits, just like millions of other Americans, who are the car buyers, have had to do over the last few decades.
November 18th, 2008 at 12:40 pm
A secret ballot is meaningless when the vote is held in the very workplace where unions have been prevented from coming and making their case, where anti-union material has been put up, and where the boss has held forced meetings telling workers they’ll be fired if they support a union. If you voted under those conditions you wouldn’t think there was anything “free” about it.
November 18th, 2008 at 12:43 pm
Would you mind saying what a ‘relatively small share’ is?/i>
Thirty-two hours of labor per car, apparently.
…but only if the UAW agrees to give up its absurd “legacy” pension & health care benefits,
At least for health care, that’s what the UAW did in its last contract with GM… GM gave the UAW a one-time lump sum to create a trust allowing the union, not the company, to handle retiree health care
November 18th, 2008 at 12:43 pm
You should entertain the notion that not every employee wants to be in a union. Ohio has unions, but our Honda plant is not unionized. Many people are happy here. They’re compensated well, treated with respect, etc., and don’t see any return in paying union dues. Same with Indiana. In Ohio, it’s only our Big 3 plants that are unionized, and they’re the places that are closing down or scaling back.
November 18th, 2008 at 12:45 pm
“Higher wage unionized factories sound very humane and compassionate until it is remembered that in the end its the car buyers, not the companies’ shareholders, who pay for them.”
I don’t get it. Do GM and Ford cars cost substantially more than Toyotas and Hondas? No, they don’t. The extra cost comes out of profit margin, so the shareholders essentially are the ones paying.
November 18th, 2008 at 1:02 pm
A secret ballot is meaningless when the vote is held in the very workplace where unions have been prevented from coming and making their case, where anti-union material has been put up, and where the boss has held forced meetings telling workers they’ll be fired if they support a union.
You keep missing the point. I’m not defending coercion by employers. I’m pointing out that the EFCA would expose workers to coercion by their coworkers and union organizers.
November 18th, 2008 at 1:22 pm
And when workers in past contracts negotiated to give up some short-term cash (in the form of wages) in favor of some long-term benefits, that increased short-term profits, which became dividends. But it now is clear the car companies should have been holding onto a lot of those dividends and instead reinvesting that cash in making cars consumers would like better.
The UAW shot itself in the foot by demanding a commitment of future benefits regardless of their eventual cost and the automakers shot themselves in the foot by agreeing to that demand. Of course, the labor cost problem is broader than just retiree health care and pension benefits. It’s also a matter of the absurd wage and benefit costs for active workers. The bottom line is that the Big Three will never be able to compete effectively against their foreign competitors as long as their labor costs are so high. If workers are not willing to work for less, they will lose their cushy auto jobs, and they can go work for WalMart collecting shopping carts from the parking lot instead.
November 18th, 2008 at 1:25 pm
Glad to see you tackling union issues. A few points:
“Some businesses feature very low profit margins on individual goods, have labor costs as a very large proportion of operating expenditures, or involve few fixed costs. In that kind of business, there’s not much a union can do for a workforce.”
Actually, there’s something huge that a union can do in that context - take wages out of competition by establishing an industry-wide standard, allowing companies to compete on the basis of quality and innovation instead of lowest labor costs. This was the basis behind the success of many unions like the ILGWU (International Ladies Garment Workers Union) or the ACW (Amalgamated Clothing Workers). It’s not a perfect model, because companies can always choose to go for the “low road” model of competition, but it at least creates a different, viable business model.
I would also note that had Walter Reuther had his way in the 1940s, as I laid out in comment 24 in the “Argument from Volt” thread, Detroit wouldn’t be in this situation. Unions aren’t stupid, but they were left with the faustian bargain of a private welfare state when the drive for universal health care broke down in the Truman years.
November 18th, 2008 at 1:31 pm
“So are you also calling for all the people who received dividends from the car companies in the past–dividends that in retrospect were, like the promised health benefits, too high–to give them back as a condition of a bailout?”
Last year GM stock was selling for over $40 share. Today it’s selling for less than $3, a 94% loss in 1 year. Their loss is almost total, but I don’t have any more sympathy with the stockholders than I do with the UAW. They need to suck it up as well.
November 18th, 2008 at 1:40 pm
Here in Blue California, if you bought a car built by UAW workers, your neighbors would pity you as a fool. A car built by non-unionized white hillbillies in Tennessee or some such state is socially acceptable, although one built in Japan is best.
November 18th, 2008 at 1:56 pm
Don Williams:
1. EFCA is an attempt to pass a national labor law that actually allows for union organizing; it’s not perfect, but it does deal with the problem that it’s almost impossible to win an NLRB election these days.
2. Historically speaking, the UAW was in favor of forms of innovation that didn’t promise to wipe out their jobs, and resistant to innovation that did promise to wipe out their jobs, However, the big issue here is that Ford and GM and the rest have extremely centralized design and R&D - UAW has no input into what cars get made - and it created a corporate culture, way back in the 50s, that discouraged innovation.
3. An alternative to tariffs is organizing the Mexican auto plants and bringing their wages up to the union standard, allowing countries to compete on the basis of quality, not price.
Tomj:
How do you expect teachers to actually win contracts without the threat of a strike? Keep in mind, teachers can also “suffer” and before unions did “suffer” from really low wages, poor working conditions, bad student/teacher ratios. There’s no reason why a well-designed union contract can’t be a tool to improve quality of education.
right:
When the CIO tried to organize the South during “Operation Dixie,” they were explicitly attacked as Yankee carpetbaggers out to destroy the Jim Crow system because the CIO fought for equal wages for whites and blacks, because they did attempt to de-segregate workplaces, and because they quite often de-segregated union locals. The historical evidence about the link between race-baiting and anti-unionism in the South in the 1940s (to say nothing of earlier eras) is staggering. If you want some books to read on the subject, I could suggest some titles.
Mixner:
What’s so profligate about being paid $30 an hour? That’s $57k a year - smack-dab in the middle-class range. According to the figures that Benny Lava linked to, Toyota workers in the U.S get paid exactly the same hourly wage rate that GM and Ford and Chrysler workers get paid. The major difference seems to be that Toyota also uses a lot of temporary workers at $13 an hour or $25k a year. That’s only 120% of the poverty rate for a family of four! Is that really an acceptable wage?
Moreover, I’d like to ask: how do you intend to achieve economic recovery by decreasing consumer purchasing power?
Mixner:
Hi, I’m a union organizer who organizes in a card-check neutral workplace, like a lot of other union organizers. It’s nothing new. Here’s how my “intimidation” goes: I walk up to someone, usually in their office or after or before they go to work, I introduce myself, shake their hand, go into my spiel about the union while I hand them a card and a pen, and try to convince them to join. Sometimes people tell me to sod off, sometimes people get very passive-aggressive and say they need time to think about it and never get back to you, but most time people join without much need for persuasion.
I have no power over the person I’m talking to. I can’t fire them, I can’t discipline them, I can’t reassign them, I can’t force them to talk to me. The boss does have that power. In that circumstance, why would I try to use violence and intimidation against someone whose confidence, trust, and support I’m trying to win? Actual intimidation from union organizers is extremely, extremely rare because it’s a toxic strategy – even if you get that person to sign a card, you aren’t going to get them to walk a picket line or phonebank or go to a membership meeting or anything like that; when the word gets out and it inevitably will, you’ll have destroyed all possibility of building a rapport with workers and any idea that the union is an institution that’s on their side. Not to say that it doesn’t happen ever, or that it has never happened, but it’s a dead-end strategy that only the most depraved individual would employ and no sane institution would condone. You’d more or less have to assume that unions were kamikaze institutions to think that they would embrace this as a major organizing tool, given the huge blowback they would face and the damage to their interests.
However, just to address the democracy angle for a second: card-check is no less democratic than signing a ballot petition or registering to vote – both parts of the political process that involve one-on-one meetings with committed activists asking you to somewhat publicly declare yourself, without the expectation of privacy you get in the voting booth. Keep in mind that in all union workplaces, after the first certification election, you don’t have subsequent elections as each new worker decides to join the union – an organizer comes up to them and asks them to sign as card, just like under card-check neutrality. As it stands, we have something of a democracy paradox – if a majority of people sign cards saying they want a union, the employer can demand an election; after that election, the Bush NLRB has decided, a minority of workers can sign cards saying they want to invalidate the election, and a new election has to be held. Union elections tend to be as democratic as the 99% referendums you see in banana republics – for reasons already detailed above. People have tried and failed repeatedly to reform the elections process, but you’d really have to go back and repeal Taft-Hartley and subsequent labor law, especially provisions that allow employers to spend unlimited amounts of company money on anti-union campaigns, require employees to attend vote-no meetings, require employees to attend one-on-one meetings, bar union organizers from the premises during elections, “predict” that the plant will close if the vote is yes, and so on and so forth.
Kafka:
This is a rhetorical dodge - all employers pay their workers wages, and all employers get that money ultimately from their sales receipts. Does that mean that no employer should provide health care, or pensions, or decent wages? At a certain point, we need to realize that it’s better to spread around high wages so that people can consume more, and afford those cars.
November 18th, 2008 at 2:43 pm
If the U.S. automakers are to compete effectively, their remaining employees are simply going to have to accept wages and benefits in line with those of foreign automakers’ U.S. employees.
Or else they’re going to have to start making and selling a lot more cars that can command forty or fifty grand in the market place. I seriously doubt it costs much less to employ a German auto worker than an American UAW member, but the latter isn’t so good at building a product that justifies his wages, and has become even less capable of doing so since the market for SUVs tanked. And it’s not as though Germany has eschewed offshoring much of its non-luxury product. My Jetta was assembled in Mexico IIRC. Anyway, whether its the fault of the evil labor unions or the evil boardrooms, what the big three are currently doing in unionized American factories appears to no longer be a viable business. I don’t see why they can’t survive and ultimately thrive, though, once they get out from under the non-viable US-based part of their business. (Although from everything I’ve read I would guess they’ll survive as a big two rather than a big three).
November 18th, 2008 at 4:17 pm
Or else they’re going to have to start making and selling a lot more cars that can command forty or fifty grand in the market place.
That market is a lot smaller, meaning lots of current workers will no longer be needed.
Anyway, whether its the fault of the evil labor unions or the evil boardrooms, what the big three are currently doing in unionized American factories appears to no longer be a viable business. I don’t see why they can’t survive and ultimately thrive, though, once they get out from under the non-viable US-based part of their business.
Well, either they downsize and focus on smaller, high-margin markets as you suggested above, where margins are large enough to support current wage and benefit levels (but for many fewer employees). Or they close down their U.S. factories and move production to Mexico or somewhere else with lower labor costs. Or UAW autoworkers accept the kind of wage and benefit levels that the Japanese automakers pay their U.S. employees.
November 18th, 2008 at 4:42 pm
People should start talking about the *kind* of unionization in the U.S., not just the extent of unionization. In Germany and other places in central Europe, there is high-level concertation where unions and employers negotiate wages and benefits at a very coordinated, high level. In the U.S. we have a massively pluralistic, devil-take-the-hindmost way of labor organizing, interest group politics and contract negotiation and very diverse labor policy throughout the states. Some workers get a great deal, others get a raw deal, and unionization becomes not the standard business environment, but a plague to be avoided, if possible by anti-union legislation.
November 18th, 2008 at 6:56 pm
Colatina raises an important point that I have not seen discussed enough. Unions function very differently in Germany than the U.S., making it possible to be pro-Union in a German context and anti-Union in the U.S. context. I don’t believe there is anything like a closed-shop, for instance, in Germany.
November 18th, 2008 at 7:09 pm
http://www.google.com/books?id=sTkWj4ixz8sC
November 18th, 2008 at 8:17 pm
“Or UAW autoworkers accept the kind of wage and benefit levels that the Japanese automakers pay their U.S. employees.”
First of all, universal health care should definitely change the benefit issue.
Secondly, the wages issue doesn’t seem to be a major differential, unless we’re talking about the temporary workers who are getting $13 an hour. Are you really suggesting that unions should accept a 56% wage cut?
November 18th, 2008 at 9:09 pm
Secondly, the wages issue doesn’t seem to be a major differential, unless we’re talking about the temporary workers who are getting $13 an hour. Are you really suggesting that unions should accept a 56% wage cut?
Are you really suggesting that the global market for automobiles might somehow set up a special sub-universe for America’s unionized auto workers? The point isn’t whether or not the unions should accept a large wage cut. Obviously in some sense they shouldn’t — the job of unions is to maximize the bargaining power of workers in an effort to maximize pay and benefits. The point, rather, is that the car-making business in the US isn’t viable with UAW-level wages. Their choices are basically either A) lots fewer jobs, or B) hoodwinking the taxpayers into permanently subsidizing their non-justified wage levels. I personally think we ought to insure none of the big three goes out of business this year or next — I reckon the risks are high that their bankruptcy would make an already ugly recession much, much worse. But I have no illusions that helping them avoid the market’s verdict makes sense in any other type of economic environment, or that helping them now can long stave off the necessity of radically shrinking their unionized US car-making business.
November 18th, 2008 at 9:40 pm
Secondly, the wages issue doesn’t seem to be a major differential, unless we’re talking about the temporary workers who are getting $13 an hour. Are you really suggesting that unions should accept a 56% wage cut?
According to University of Michigan economist Mark Perry, workers for the Big Three get far higher compensation than U.S. workers for Toyota.
Total Compensation Per Hour, Selected Workers, 2007-2008
Big 3 Average: $73.20
Toyota: $48.00
Management & Professional: $47.57
Goods producing: $31.59
All workers: $28.48
November 18th, 2008 at 10:20 pm
Mixner:
That comparison is about “total compensation” - which includes health care and pensions into the bargain; it’s a different statistic from wages.
I just looked up the most recent UAW contracts with Chrysler, GM, and Ford, and their wages are about the same as Toyota pays. The difference is that Toyota has far less in the way of health care and pension costs.
So does that mean that the UAW needs to accept wage cuts, or that both GM and the UAW need universal health care to become competitive?
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