Last week, hands were wrung and tsks were tsked over the potential $25 billion dollar bailout of GM, Chrysler, and Ford. Sure, directly and indirectly the U.S. auto industry employs about 4.5 million people. But the companies, we were told, might not be worth saving. They hadn’t built the green cars that Americans wouldn’t buy until suddenly gasoline got expensive. They dared to pay their employees decent salaries with good benefits — which is ridiculous; good salaries and good benefits aren’t for blue color workers! And they’d made some bad decisions, like counting on the financial system not to collapse. How could we possibly give them $25 billion dollars?
Now, don’t get me wrong; one could argue that a $25 billion bailout for the auto industry was wrong in normal times. One could argue that we don’t give billions of dollars to private entities just because they’re really big and their failure would be painful. Of course, one’s argument would pretty much be blown up by this news:
Federal regulators approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank, the government announced late Sunday night.
The complex plan calls for the government to back about $306 billion in loans and securities and directly invest about $20 billion in the company. The plan, emerging after a harrowing week in the financial markets, is the government’s third effort in three months to contain the deepening economic crisis and may set the precedent for other multibillion-dollar financial rescues.
Yes, that’s right: you and I just spent $20 billion for a stake in Citigroup, and we’re on the hook for over a quarter of a trillion dollars more. Citigroup employs 300,000 people.
Now, don’t get me wrong — the failure of Citigroup would be a very bad thing, and it may be worth the money to keep it afloat. But how can we seriously argue that Ford, GM, and Chrysler are terrible companies that need to go under while we’re shoveling a trillion dollars into the financial services sector? How can we argue $25 billion for three companies that keep at least one major metropolitan area from collapse is foolish, but $20 billion for one bank is not?
The auto industry has made plenty of stupid mistakes. So has the finance industry. But the latter has received its money, no questions asked, while the former is still being raked over the coals, and probably won’t get anything until the Democrats take power in January. Why is that? Could it be that the auto industry employs blue collar workers, while the banking industry employs Muffy and Biff’s nephew Chet, who went to all the right schools? I don’t doubt it. For all the talk of employees making $30 an hour at the Ford plant, we still haven’t heard a true accounting of the employees of the financial industry who made millions moving paper around, until it turned out the actual paper was the most valuable part of the transaction. And for all our worry about what will happen to our financial services sector, perhaps some worry about our industrial sector is in order.
If nothing else, it’s time for everyone to admit that we are not operating in a normal economy. Interest rates are essentially at zero, and the credit markets are still locked. The only source of liquidity right now is the federal government’s ability to print money. Is that a great long-term strategy? Folks, right now it’s all that’s keeping us from going into a depression. So while it’s important to get strings attached to these deals (heck, yeah, Detroit should use part of their money for greening the industry), it’s also important to get deals done. Or we can simply let the market sort it out — but that means letting it sort it out for the white collar kids who went to Harvard and Columbia as well as the blue collar kids from Flint. If we’re unwilling to let the former group fail, we shouldn’t be willing to let the latter group, either.
Hey, I was singing that song yesterday!
GO SPINAL TAP!!!!!!
But the companies, we were told, might not be worth saving. They hadn’t built the green cars that Americans wouldn’t buy until suddenly gasoline got expensive.
Except that Americans have been buying them from Toyota, Honda, etc., etc.
They dared to pay their employees decent salaries with good benefits
They’ve been paying their employees overinflated salaries with benefits that nobody else in the private sector (don’t get me started on government employees) has been providing for years — including their competitors.
“which is ridiculous; good salaries and good benefits aren’t for blue color workers!”
Empty rhetoric. Make the case that anyone has actually based their opposition to bailing out the auto manufacturers on this basis.
And they’d made some bad decisions, like counting on the financial system not to collapse.
And paying huge performance bonuses to executives when the companies’ actual performance has been to lose both money and market share. And not anticipating the rise in energy costs that, again, their competitors seem to have figured out quite nicely. And making cars with engineering inferior to their competitors’. And letting themselves be bullied by the labor unions into paying so much in direct labor costs, benefits, benefits to retirees and labor banks (wherein people who are laid off are being paid 80% or more of their original salaries for indefinite periods) to the point that they’ve got to eat $2,000 to $3,000 dollars of extra costs for cars equivalent to those of their competitors.
Well, technically equivalent. After all, even though they cost more they’re not engineered as well, they’re not made as well and they don’t last as long.
Ford, Chrysler and GM don’t operate in a vacuum. Toyota, Honda and various other companies make cars here as well. Why aren’t they going hat in hand to the government to get loans? Because they’ve run their companies in a competitive fashion and consistently manufactured a superior product despite all the stigmas they started out with. Why haven’t the American companies done the same?
How can we argue $25 billion for three companies that keep at least one major metropolitan area from collapse is foolish, but $20 billion for one bank is not?
I wouldn’t. But I can argue that we shouldn’t have done either, and just because we’re making one stupid thing doesn’t mean we should do another.
Actually, I have seen something that I can support. As a condition of getting the money the American auto companies would have to declare bankruptcy under Chapter 11. That requires the companies to reorganize and voids out all their vendor and labor contracts. The management of the companies would also all have to resign. They’d be replaced and all the labor contracts could be reset to levels that would allow them to compete. Providing these guys a bunch of money while retaining the present management and labor structures is a recipe for disaster. I don’t forsee these companies being able to become competitive again under those circumstances – you’d just be pushing the problems downstream and they’d be back for more money later.
I feel the need to correct some issues regarding the labor contracts. yes, some of the conditions imposed by the labor contracts are onerous, especially pension and healthcare plans. But let’s be real. Unions have been moving back on new labor deals and conceding benefits and pay raises for nearly two decades now. The reason the big 3 are failing is because they have refused to truly put out a competitive product. That is not the fault of the unions. Yes, the unions have stood in the way of cutting down the workforce when the big 3 were faltering and stood in the way of some lean management practices. But lean management and automating some plants more would not have changed the big 3’s overall competitiveness, to say that it would is disingenuous. The real issue is that the big 3 have not evolved over the past thirty years at a pace with the rest of the world’s auto manufacturers. Toyota has been at the top of quality surveys for the a decade and more. The Japanese dominate this market not because they have cheap labor but because they put out a quality product.
While I would love to hand this money over to the big 3, I can’t see a truly compelling reason to do so if they won’t be competitive. GM says it may run out of money before the spring. If they don’t have some major turnarounds then they must come back to the federal government for more money. This is a company that has been dying for years. It may be time to let it fall if it can’t actually compete.
And to also try and address some of the greater issues of the financial sector. Yes, the real economy is vital and the big 3 supply a massive amount of jobs. But the big 3’s issues concerning financing and liquidity can also be placed at the door of the financial industry. Capitalism runs on capital. And, unfortunately, because of technology advancements, and a concerted political effort to hamstring the labor movement, and the rise of short-term stock-price worrying managerial boards, the importance of capital in business has overtaken labor’s influence by a huge amount. This is a true crisis of capitalism. As such, we need to focus on the financial sector more. If we can free the blockages there and restore some confidence then we can be better prepared to help the real economy.
They’ve been paying their employees overinflated salaries with benefits that nobody else in the private sector (don’t get me started on government employees) has been providing for years — including their competitors.
Ron F., define “overinflated.” What annual pay would you propose that autoworkers should be taking home? What annual pay do you suppose will contribute towards the economic and social stability of that region (as well as the impact on the rest of the national economy)? If the autoworkers are willing to accept lower pay, will you (and your fellow conservatives) be willing to do your part by ponying up for the necessary subsidized housing, subsidized food, subsidized medical care, and heavy federal funding for schools, public works, hospitals, etc. to replace the depleted local tax base that comes with that lower pay? Hmmm?
*sound of crickets chirping*
*and probably something about the magic of the market*
Yeah. Well, contrary to popular conservative myths about the Power of Labor Unions and how unions are responsible for the outsourcing of industry (anyone else wonder how come labor unions are still being blamed even though we represent only 7% of the populace? “bullied” by the labor unions? seriously?), the real culprit for our financial woes is trickle-down economics—the big shift of wealth from the producing class to the owning class.
And letting themselves be bullied by the labor unions into paying so much in direct labor costs, benefits, benefits to retirees and labor banks (wherein people who are laid off are being paid 80% or more of their original salaries for indefinite periods) to the point that they’ve got to eat $2,000 to $3,000 dollars of extra costs for cars equivalent to those of their competitors.
You do realize that the “benefits” of which you speak include health care, right? And that health care benefits don’t need to be paid by the “competition”, because the competition has nationalized health care—-their workers automatically enjoy the benefits that are considered outrageous sops to the bullying labor unions in this country, right? And that the historical reason for this development was during the wage freezes in WWII?
They’ve been paying their employees overinflated salaries with benefits that nobody else in the private sector (don’t get me started on government employees) has been providing for years — including their competitors.
Nobody else in the private sector? Really? Can you provide me with some statistics that show that pensions, 401k matching funds, flexible spending plans, deferred comp, paid holidays, two weeks paid vacation, health insurance and such are nonstandard benefits in the white-collar world of the insurance industry, banking industry, medical industry, etc.? You do realize that if you enjoy any of the above, you may as well be thanking a union member? (You’re welcome. I’m glad to oblige.)
Also, it is probably worth mention that labor unions are concerned with a helluva lot more than take-home pay and benefits. Here, lemme mention one, since this is a feminist blog—the right of workers to not have to sex up the boss, for starters.
“which is ridiculous; good salaries and good benefits aren’t for blue color workers!”
Empty rhetoric. Make the case that anyone has actually based their opposition to bailing out the auto manufacturers on this basis.
Feel free to surf through what is passing for the so-called “liberal” blogosphere these days; that’s a common current in the hipster set. I had the pleasure of reading one young woman’s comment that there’s no excuse for people without a bachelor’s degree to be making any more than $30,000/yr. It’s not just conservatives that are anti-labor.
Hate to say it, but I’m with Ron on this one. These companies have some serious, deep-seated problems: the quality of their cars, the corporate culture that thinks it’s okay to fly in a private jet to go to a meeting to ask for welfare, the insistence that Americans won’t buy fuel-efficient cars.
It’s the last one that bothers me the most. “Americans won’t buy it unless it can do 0-60 in x.y seconds!” said an overpaid Detroit talking head on the teevee the other day. Bullshit! Some Americans want a car that will get us to and from work and the grocery store, that’s cheap to buy and operate, and don’t give a damn about anything else. Strip out the power steering, power windows, A/C, CD player, and maybe even the rear seats. Downsize that gargantuan engine, then downsize it again. Make us a car with the features we NEED, not the luxuries you think we want.
For their monumental cluelessness, the Big 2.5 need to collapse. A leaner, meaner auto company will rise from the ashes, and in the long run that’s better for all of us.
Jamaal, how is it possible for Ford to make a car of the same quality as Toyota’s and to sell it at a price competitive with Toyota’s, if Ford’s labor costs are significantly higher than Toyota’s and those costs don’t increase the quality of the product? There’s nothing inherently bad about paying a lot for labor, even relative to your competitors, so long as that higher-cost labor produces a superior product. But so far as I can tell, paying Ford workers more in Michigan doesn’t cause Ford to make a better product than is made by the Toyota workers in Kentucky, West Virginia, Alabama and Texas.
The high labor costs also may have contributed to part of the Big Three’s bad strategy of over-investing in large vehicles such as SUVs. Large vehicles have a higher profit margin than small vehicles, and so in the short run and due to the instability of U.S. gas prices, taking those profits made sense. It’s easy now to say that the Big Three should have focused on making something like the Camry, but the Camry wouldn’t have given them much profit margin due to their higher costs for labor.
La Lubu,
I would say that paying auto workers in Michigan the same wages paid by foreign companies to auto workers in the South (who in some cases are charged with the responsibility of turning out high quality luxury vehicles) probably is reasonable. Can you rationalize why Ford’s workers should be paid much more than those at the Toyota and Mercedes plants? It’s not like Alabama has state-sponsored health care and thus Mercedes doesn’t have to worry about providing it.
Also, union contracts do provide certain benefits that I honestly NEVER have seen elsewhere, such as the jobs bank program in which people who have been downsized out of their jobs nonetheless stay on the payroll. Anywhere else in the private sector, if you officially have absolutely nothing to do at work for months at a time, you don’t get $31/hour plus benefits; you get two weeks’ severance and COBRA.
in my opinion we would do well to decide what we want from business.
if the emphasis is for business to provide wages in exchange for manual labor then we should treat the business as some type of work program in which wages originate with washington and then pass to the workers and the product itself is incidental to the process of redistributing wealth to those who “deserve” it. if this is what folks want then by all means give the $25 billion to general motors.
if the emphasis is to support a process and structure by which the private company is run in a manner in which profit is sufficient to pay wages and benefits for its workforce and the product itself is vital to the success of the process then give the $25 billion to toyota.
the question for me is: what responsibility does the business have to its employees in the circumstance in which the employee demands (the demand is assumed to be an appropriately negotiated amount ) wages in exchange for manual labor. is the need to place profit first in an effort to sustain profits and resultant wages or is it appropriate to place wages and benefits first and risk a circumstance in which the demand will not support the product and profit is marginalized or erased.
PG, you did read that article, right? That was a negotiated benefit. The union agreed to it not as a sop for lazy, overpaid union workers, but to strongly discourage the company from laying people off. Very similar strategy to the labor movement’s fight for (and obtaining of) legislation regarding overtime—it’s not to put more money in the hands of the select few, but to encourage hiring and discourage layoffs.
We have a similar bank regarding health insurance in the construction industry, to the effect that we have our own section in the Family and Medical Leave Act that governs it—-we bank hours in our insurance plan to cover us during inevitable periods of layoffs. I suppose you think that cost is a net drain on the economy also, and that the economy would be better served if we (construction workers) were ass-out-in-the-breeeze in terms of health insurance, because the ensuing annual bankruptcies (due to uncovered health emergencies) would be so much more beneficial. What about unemployment insurance? Ready to chuck that in the shitter, too?
And do you really think that the cost of living for place like Detroit or Belvidere is just as low as for Kentucky and Alabama? Because if that is so, why stop at autoworkers? Let’s get everybody in this race to the bottom. I’m sure white collar folks in NYC and Boston could effortlessly manage their expenses on $50,000 a year, since those autoworkers in Alabama seem to be managing just fine, right?
One of the points of this post was the deep resentment folks seem to have toward any bailout money being used to pay middle-class wages to mere blue-collar workers. It’s an area where conservatives and liberals agree—that blue-collar workers like myself shouldn’t enjoy the same standard of living as white collar workers. How dare we! It’s like we are putting on airs or something; not recognizing our betters. Thinking we should own houses and eat well and such.
Labor wasn’t the cause of outsourcing. There are plenty of profitable companies who chose to outsource despite turning a profit at unionized plants—the appeal of super low wages and lack of environmental and labor legislation (and the helpful lack of human rights in most of the destinations of outsourcing) was/is too strong. I have yet to see the same level of vitriol exercised towards the golden parachutes of the well-heeled financial sector.
Again, anyone…..if auto workers are supposed to accept reduced pay and benefits, let’s talk turkey. What should the pay and benefits look like? What should they be rceiving? Now, what should their bosses be receiving? How much of a pay cut should they absorb? I’d also like to see some dissection of what the impact this will have on that area’s economy and the national economy. Frankly, with 70% of our economy dependent on consumer purchasing (since de facto economic policy has been to stop producing and selling any durable goods), I’d like to hear someone’s (anyone’s) bright idea on how eliminating disposable income is a benefit to the economy.
La Lubu,
PG, you did read that article, right? That was a negotiated benefit.
Yes, I did. The fact that a benefit is negotiated does not make it less peculiar to the Midwestern auto industry. You were claiming that these benefits, contrary to RonF’s assertion, were not “benefits that nobody else in the private sector” receives. I pointed out that actually, there is such a benefit that seems to be only for Midwestern auto workers: $31/hour plus health care for being an able-bodied, non-retired worker, doing absolutely nothing. You then say it was a negotiated benefit. OK. How does that make it in any way a benefit that is NOT peculiar to the Midwestern auto industry? Why is the fact that the benefit was negotiated relevant to whether or not it is common in the private sector or available to white collar workers?
Can you name a white collar job in which this is possible? I can’t imagine being able to tell one’s employer, “OK, if you’re going to put all the research materials online and no longer need much of a law library, we law librarians will now demand that you keep all of us on staff, even if you only need two of us, and you’ll just have to pay the other two for doing no work.” In other sectors, advances in technology (investment of capital) allows employers to decrease the amount of labor necessary to produce the same quantity and quality of output (though it also means the remaining workers are more highly paid because they need a higher level of skill and knowledge). Why should the Midwestern auto industry not be able to do what other sectors do?
Unemployment insurance is not comparable to this negotiated benefit, for the following reasons and probably many more:
1) The cost is spread across all employers in the form of a tax, and in three states employees also contribute.
2) The person receiving benefits must seek work in order to continue the benefits. Sitting outside his old workplace doing crossword puzzles doesn’t qualify. He may be required to register with the State Employment Service.
3) Unemployment benefits are time-limited at 26 weeks unless the legislature (state or federal) authorizes an extension.
4) Benefits are based on a percentage of an individual’s earnings over a recent 52-week period. Of my friends who have collected unemployment benefits, none got 100% of the pay and benefits that they got when they were employed.
You bring up the cost of living in the Midwest versus the South as justifying paying the Michigan workers a great deal more than the Alabama ones. But this makes no economic sense; jobs naturally move where they can be done most cheaply while still being done effectively. White collar jobs do get moved all the time, particularly in the tech sector. My uncle the engineer can’t demand that he get paid enough to meet the “cost of living” in Dallas if his employer can just move the job to Delhi. Is the living wage in Michigan $28/hour? (GM autoworker base pay) I agree that employers have an obligation to pay their employees enough to live on, but we clearly disagree on their obligation to pay beyond that.
blue-collar workers like myself shouldn’t enjoy the same standard of living as white collar workers
Depends on what your work is worth to your employer. If your employer will pay you $28/hour because otherwise you will find another job, or your leisure is worth that much to you, then $28/hour is the appropriate wage. Personally, I know lots of white-collar workers who make less than that ($28/hour, 40 hours a week, 50 weeks a year = $56k). They don’t declare that blue collar unionized autoworkers must be looking down on them if those autoworkers aren’t out marching for an editorial assistant’s right to be paid a higher wage.
I just put forward what I thought would be a reasonable level of pay and benefits for Midwestern autoworkers: about the same level paid to their Southern peers working for non-U.S. automakers, but still living in the U.S. without universal health care or any greater social safety net than the Midwest has. Your response was that this doesn’t account for differences in the cost of living, but there’s no requirement that employees doing similar work in different parts of the country be paid different amounts. Many big law firms pay their Dallas first year associates the same amount paid to their New York first year associates. Lawyers in Dallas have a spouse stay home and buy a BMW; lawyers in New York continue to live with a roommate. If they’re doing the same work, and both can afford to live (i.e. afford food, shelter, suits and law school loan repayment), why does the different cost of living mandate that the employer pay one more than the other? The market might force it, if law firms competing for the same associates are increasing their salaries, but there’s no moral imperative to pay people more than a living wage for their geographic locale.
I’d like to hear someone’s (anyone’s) bright idea on how eliminating disposable income is a benefit to the economy.
Why is giving disposable income to Midwestern autoworkers going to create more benefit to the economy than giving it to levee-builders in the Gulf? At least in theory, there’s a finite amount of money, and I’d rather have it go to building necessary infrastructure that will provide a long-term benefit to the U.S., than to subsidizing jobs at companies that are demonstrably not competitive in their industry.
Why is the fact that the benefit was negotiated relevant to whether or not it is common in the private sector or available to white collar workers?
And I gave you an example, insurance bank hours, that is standard-issue nationwide for unionized construction workers. An argument could just as easily be made that such a deal shouldn’t exist; that our covered care should immediately be terminated (unless we make COBRA payments), and that abolishing bank hours for health insurance would allow plans to lower cost, thus allowing contractors to lower the scale and be more competitive. Net gain for the industry and all that. Socialize wealth, privatize risk (as the risk of not having health insurance would be solely borne by the individual workers). Or not. After all, COBRA payments are already between $700-$1000 per month, not easily born by unemployment insurance. Which means one could expect a significant number of families would be left without health insurance. Considering that 50% of bankrupcies in the United States are due to medical bills (some of those bankrupcies occuring with people who did have insurance), this is a problem, no?
See, what you’re missing when I say it was a negotiated benefit is that there was something in it for the company, too. I mean, unless you are assuming that companies really enjoy paying folks to sit around and do crossword puzzles. What was in it for the company was skilled workers not leaving for other fields, as very, very few people are voluntarily willing to go without that safety net of a paycheck for extended periods of time. That’s part of the reason why my industry has bank hours for health insurance. You can talk young, healthy, childless people into going without health insurance; it’s significantly harder to get older people with families to do so. Having a benefit like this is critical to people who enter arenas of work where periodic layoffs are part of the game plan. Having a job bank is one way of controlling the costs to the company. Otherwise, the company would be in the position of paying higher wages to accommodate workers (who would need to save after-tax income to get by during layoffs, as unemployment is significantly lower than wages) and would inevitably deal with the higher costs associated with higher turnover rates, as skilled workers jumped ship. The union did not want idle workers; the union figured that the company would get tired of paying idle workers and do more to put people back to work, since they were getting paid working wages anyway. That strategy, that gamble with the company, failed. Yet like magic, labor gets the blame.
Not to mention, the “high wages” (actually, standard-issue middle-class wages) so resented when blue-collar workers are the ones taking them home, are a tradeoff for the lost years of our lives and higher risk of injury, including permanent ones that come with our jobs. Mind you, I’m not whining. I knew what I was in for when I took my job—but you can rest assured that I wouldnt have done so for low wages and no benefits. Apparently, I’m not the only one—even with the generally good wages and benefits that unionized construction workers have, there is a nationwide shortage of skilled tradespeople that will only get worse as the baby boomers retire in droves. It takes a while to teach a person a skilled trade. Those skills are, in fact, valuable (even though we don’t have alphabet soup after our names).
Our employers—that is, for those of us who are unionized—-don’t pay us that wage because that is what we are worth as individuals. They pay us that wage because we stand together collectively and say that’s what the work is worth. That’s where the “bullying” image comes from. The so-called “free-market” ideal is for people to stand as individuals and negotiate with their employers individually. There isn’t any recognition that under such a system, literally all the power rests with the employer—an individual employee has nothing to bargain with. Surely you don’t believe it’s complete coincidence that in nonunion environments, employers freely, magically choose to pay white men more than anyone else because white men are freely, magically better negotiators? (another benefit to the union environment—equal pay!)
Really, why should unemployment insurance exist? Do you know what “seeking work” means to laid off union construction workers? Do you know what I do? I “sign the book” —-that is, sign the hiring list at the union hall. My union hall, and any other union hall I’m willing to drive to in order to find work (unemployment doesn’t require that you seek work outside your geographic jurisdiction, but I sign every book within a two hour drive. If my daughter was grown, I’d expand that radius, but as it is I’m a single parent and can’t do overnights for about another decade). Then, I wait. Yep, wait, as in wait for a call to go to work. Sometimes I do crossword puzzles, sometimes I get online, read books, play guitar, exercise, finish home improvement projects, go hiking or mountain biking—-you get the idea.
Isn’t that terrible? Shouldn’t I be sitting in silence at some table somewhere, at least? Or out breaking big rocks into smaller rocks? Because the thing is, I’m not going to get back to work any faster by pounding the pavement. Contractors aren’t going to call us in to work any faster if we’re impeding traffic at their doorsteps than they are if we patiently wait for the work to be let.
So what’s the benefit to the economy by having unemployment insurance? Well, because by having it, you can keep skilled, experienced workers in avenues of work that would otherwise experience continual womanpower (or manpower, if you will) shortages (or, lack of people that can actually perform the job rather than just warm bodies to fill a position). It keeps wages lower, because otherwise you’d have to pay a higher wage to make up for the missing paychecks. It keeps local economies moving, because it keeps disposable income flowing (people are notoriously unwilling to spend money during times of economic insecurity). In short, it helps keep the balance.
But anyway, back to the original point of the post. While you are correct that companies can and do outsource even white collar jobs, I’ve noticed a distinct lack of clamoring in what shamelessly passes for “liberal” circles these days for an upsurge in the outsourcing of white collar employment. I haven’t breezed past any white collar hipsters advocating the outsourcing of their (and their friends and families) jobs to India, because it would be most excellent for the global economy (y’know, raise the standard of living in India, lower cost for consumers in the United States, yadda yadda).
Speaking of those lower costs for consumers that come with outsourcing, have you noticed the price of outsourced products or services coming down any? Yeah, me neither. Seems like the owners of maquiladoras aren’t really interested in passing along that consumer savings. Go figure.
Look, Henry Ford didn’t pay his workers what he did because he was such a big advocate for organized labor. Auto workers making high wages buy vehicles. That’s the legacy we’re dealing with here, not “bullying” unions. What the United States has yet to figure out is how to build an economy based on (a) consumer spending, combined with (b)rapidly, dramatically decreasing purchasing power and less disposable income. Now, you can make any argument you’d like about what working class people ought to expect in terms of our standard of living, that we need to divest ourselves of any dream of homeownership, or sending our kids to college, or working a humane number of hours that don’t beat our bodies and minds to death, or whatever—just don’t expect us to agree with you.
That’s what boggles my mind—that we are actually expected to say, Yes! I make too much money! My annual income should only be $30,000 (as was posited by a Feministe commenter)! Fuck that. I’ll keep on fighting for an increased standard of living, and better working conditions, thank you very much. That such arguments are made by people whose own working conditions owe damn near everything to organized labor (like weekends? thank a union member! again, my pleasure), boggles the mind even further.
The dramatic difference between how the proposed big three bailout is talked about, as opposed to how the Wall Street bailout was talked about on the liberal blogosphere is a huge reason why “something’s the matter with Kansas.” Bedda matri, if these are my “friends”, who are my enemies, again?
And I gave you an example, insurance bank hours, that is standard-issue nationwide for unionized construction workers.
Which is fine, but it’s not the benefit I’m talking about, which is far more expensive, and, in contradiction of what you implied to RonF when he said that the Midwestern auto industry has benefits that one doesn’t see elsewhere in the private sector, seems to be peculiar to the auto industry. You were saying that these auto workers were just getting the same benefits that white-collar workers take for granted; I pointed out that no, in fact these auto workers are getting benefits that would seem completely bizarre to white-collar workers.
You’ve made a good case for unemployment benefits, which I agree with anyway, but you haven’t made much of one for paying someone 100% of their prior wages and benefits while they wait around for more work to open up, at a plant that has installed technology specifically to reduce the amount of labor necessary.
See, what you’re missing when I say it was a negotiated benefit is that there was something in it for the company, too.
Yes, and according to the article, what was in it for the company was that the union would agree to a technological upgrade in the plants that was going to make certain laborers unnecessary.
Do you have any evidence for your claim that the company actually did it to ensure that “workers [were] not leaving for other fields”?
They pay us that wage because we stand together collectively and say that’s what the work is worth.
And how do you come up with that number? Does someone sit down and figure out how much it costs to own a home and send children to college, divides that by what is deemed a “humane” number of hours (I’m expected to spend at least 55 hours a week at my job; my husband makes the same base salary but get better benefits and bonuses at his job, and he’s expected to spend at least 65), and says “this is what the work is worth”?
There isn’t any recognition that under such a system, literally all the power rests with the employer—an individual employee has nothing to bargain with. Surely you don’t believe it’s complete coincidence that in nonunion environments, employers freely, magically choose to pay white men more than anyone else because white men are freely, magically better negotiators? (another benefit to the union environment—equal pay!)
I honestly haven’t found that to be true in my non-unionized work experience. When I was looking for my first full-time job, I received three job offers that carried different levels of pay and benefits. I opted for the job that didn’t seem likely to provide as much satisfaction, but did have the highest level of pay and benefits and would allow me to live in Northern Virginia instead of San Francisco or Austin. The job in SF would have been for the federal government; in Austin, for a non-profit; in NoVa, for the private sector. The salary for the federal government and non-profit jobs were publicly stated; there was no way to pay white males something different than the rest of us. In theory the private sector job could have been paying me discriminatorily, but one reason I decided to go with it was that it was a company founded and run by an African American to serve underprivileged populations, and had a lot of women in top management. (One of my bosses was Hillary Clinton’s “black friend” at Wellesley.) I find it unlikely that such a company would pay a white male with the same resume in my position more than I was paid.
When looking for summer jobs in law school, I could indeed engage in some bargaining with law firms, about when I’d need to start, how many weeks I could work, whether I could split between two firms, etc. In a good economy, in some fields and at certain levels, individual employees do have a lot to bargain with: they individually are valuable and worth courting. I acknowledge that it isn’t true for employees in other fields who are just starting and haven’t accumulated a lot of valuable skills, and isn’t true for anyone in really bad economy.
Henry Ford didn’t pay his workers what he did because he was such a big advocate for organized labor.
Certainly not — he was a paternalist. He saw himself as creating his own little world in which he would direct his employees on how to spend their $5/day wages, which would not be on cigarettes. But for those of us who reject having our employers know what’s best for us, Ford isn’t the kind of guy we’d want to work for, even with his generous wages.
I’ll keep on fighting for an increased standard of living, and better working conditions, thank you very much.
And how will you fight for it? By making yourself a more valuable employee, or by insisting that Congress legislate it and then pay for it when your company no longer can? I’m in favor of people’s fighting to make their lives better; I’m just a little worried when they’re supposed to be in the private sector, making goods to be sold to individuals, yet are getting their paycheck from taxpayer dollars. If I’m paying someone’s wages and benefits, I want that person to be providing public goods: teaching in public schools; providing national defense; building non-toll roads and bridges. If I’m paying for someone to build the Ford F-150, the F-150 should be in my driveway.
The dramatic difference between how the proposed big three bailout is talked about, as opposed to how the Wall Street bailout was talked about
Can you point to five liberal bloggers, with a Google Pagerank of at least 4, who said that the banks needed to be bailed out in order to provide income to the i-bankers working there? Every non-investment banker in NYC, from Megan McCain on down to the hippies in Williamsburg, loathes i-bankers and had a frisson of schadenfreude at the news that they were losing their bonuses and might even be laid off, thus helping to pop the housing bubble here and allow other people to rent and buy property.
Personally, the arguments I saw for the bailout were not that it needed to be done because it would be too destructive to the economy to lay off a bunch of MBAs, but that if we let banks fail again we’d be in the destructive spiral that we had during the Great Depression. Moreover, some financial institutions have been allowed to go belly-up — who in the liberal blogosphere have you seen weeping for the brothers at Lehman?
See, what you’re missing when I say it was a negotiated benefit is that there was something in it for the company, too. I mean, unless you are assuming that companies really enjoy paying folks to sit around and do crossword puzzles. What was in it for the company was skilled workers not leaving for other fields, as very, very few people are voluntarily willing to go without that safety net of a paycheck for extended periods of time.
The benefit to the company was that their labor force wouldn’t go on strike and disrupt their business to the business’ detriment and the advantage of their competitors. Which worked out fine in the 80’s, but sucks now because they have competitors who never had to concede that in negotiations because they automated up front. They don’t suffer by having to pay non-productive people.
Sometimes I do crossword puzzles, sometimes I get online, read books, play guitar, exercise, finish home improvement projects, go hiking or mountain biking—-you get the idea.
Has studying up and learning skills that might enable you to change your career to one where you have less risk of getting laid off come up? See, here’s the deal; neither you nor I have the right to work with one set of skills and earn a living wage with them our whole lives. That’s what’s hit these people in the auto industry’s job bank and why the concept of it being an advantage for keeping skilled people around so that they’d not leave for other fields falls apart. They’re not getting called back. The automation worked. Their skill sets are obsolete and those jobs are gone, gone, gone. The best thing for the auto companies right now would be for them to go out and do just that; get some training and get another job, even if they have to move away to do it.
I’ll keep on fighting for an increased standard of living, and better working conditions, thank you very much. That such arguments are made by people whose own working conditions owe damn near everything to organized labor (like weekends? thank a union member! again, my pleasure), boggles the mind even further.
Keep on fighting, by all means. But don’t expect me to pay for that standard of living by voting for my tax money to be given to your employer. Don’t expect me to pay for it by buying goods that I can get more cheaply, of better quality and made by American workers from one of your competitors. Don’t expect to get it by pricing your labor out of the market.
Weekends? I had to come into work at 0200 Good Friday this year. I get calls on the weekends. I do network analysis and engineering and I’m on call 24/7. But I get paid more than $28/hr. I wouldn’t presume to tell you how much money you should make. I’m just damned if I’ll accept you telling me how much money you should make and that my taxes should either directly or indirectly support it. Take it up with your employer, but leave the government out of it.
As it happened, I’ve worked for one company that got bought out, one company that merged and one that went Chapter 11. Had to change my job each time. In the Chapter 11 case I essentially got sold; I was called into the office and told that they were outsourcing what I did to a new company and that I was working for them now. The new company told me that I wasn’t going to get a raise for at least a year, which was bad news considering that I hadn’t gotten one the year before. I told them “Look at what I do. What is the market out there for that? You have 30 days to give me a raise or I’ll start looking for another job.” The upshot was that they came to me 30 days later and asked for another 30 days and then came through with a raise. In the merger case I was flat laid off. I hit the streets and made dozens of calls, went on interviews, and landed a job before my benefits ran out. In the case of the buy-out I was told that I was going to have to move from the Chicago area to Nashville. As soon as I heard that I looked for another job and found one in a few weeks.
At no point did I figure that anyone – not the employers, not the government and not you – owe me a job at what I was making and using the same skill set I had used in the previous job. Negotiate all you want, but just because you’ve talked someone into giving you something doesn’t mean that they’ve been smart and that if they’ve screwed up it’s something that a third party has to make good.
La Lubu,
You make a lot of statements about what auto workers are worth.
Doesn’t that usually link to scarcity? In my varied career, I have been worth a fair bit because I can do things that not many people can do, but a lot of people want done. If I work in a job where there is no benefit to my skills–if I become a ditch digger–then those things don’t earn me more salary.
Of course, I have changed jobs radically over time in an effort to keep my skills relevant and my job prospects high…
So right there is something that I have no problem asking you, or anyone else I am being asked to bail out, to take care of: If people don’t want to hire you for what you know how to do, then try to learn to do something that people want to hire you for. Everyone else does it; you can too. And if unions PREVENT you from doing so, then I do not think that’s a benefit.
And how do you come up with that number? Does someone sit down and figure out how much it costs to own a home and send children to college, divides that by what is deemed a “humane” number of hours (I’m expected to spend at least 55 hours a week at my job; my husband makes the same base salary but get better benefits and bonuses at his job, and he’s expected to spend at least 65), and says “this is what the work is worth”?
Gee, you make that sound so difficult. How do we come up with that number (at the negotiating table)? Pretty easy. By the time it’s time to negotiate another contract, the wages we are receiving already have less purchasing power than they did three years ago when we settled for that rate. We negotiate for wages that take up our standard of living back up to where it was when we started the last contract, and hope that our projections for the next year or two is accurate (as do the contractors ;-)
See, contrary to popular belief, it’s not the working class that are the greedy bastards, looking to get something for nothing. I’d be perfectly happy with year-round full-employment, rather than having to occasionally resort to unemployment insurance, but it comes with the territory. I made my choice of employment based on my skills, interests, and sheer dumb luck (of being chosen for the apprenticeship program, which is competitive). I thought it was a better deal than college, and still after twenty years feel that way. Since I now hold what we in the trades call a “management puke” position ;-), I’m even more convinced that the white collar world was not for me (but no, the paychecks haven’t bounced yet, so here I remain). The cost of living for any given geographic area is what it is—one doesn’t need a sophisticated cost analysis to see what is left in one’s account after paying the bills.
As for working hours, I’m a firm believer in “8 hours for work, 8 hours for rest, 8 hours for what you will.” Old-school labor attitude. I know there are some folks who love their jobs so much, they can hardly believe they’re getting paid to do them. There are others who find complete satisfaction in their employment, and have no other interests than work-related ones. Most people do not fit into these categories. I love my work (well, I loved my work out in the field. behind a desk? nope. can’t say I love it. or even like it much on most days. what I like is the steady income. my ideal would be to have that full employment, yet have it be in the field. but I digress)—but I have a deep, serious enjoyment of other activities, also. I have a daughter, for one—I’d rather not work overtime since it takes away from family time. Another factor in my choice of employment is that the 40-hour week remains the standard. That allows for a balance of time. I realize that by doing so—by not choosing a form of employment (that would require roughly the equivalent level of education and experience that I possess, though comparisons among industries is kinda dicey) that requires more on-the-job hours, I’m making less money. That’s ok. I’m satisfied with the standard of living that I have, and only want to keep it going. That’s a common attitude amongst tradespeople.
PG, I’m glad that you haven’t experienced an unequal paycheck, but yours is the outlying experience. The Bureau of Labor Statistics reveals that unequal pay is the standard experience for women and men of color; union contracts require that people are paid commensurate with job title, training, and years of experience (as do civil service jobs). That eliminates the typical wage gap by setting objective standards. I know free-market advocates insist on the objectivity of the bottom line, but that ignores the fact that decisions on pay are made by human beings, who can and often do act nonrationally, even when it costs them (literally or metaphorically) to do so.
Now, when I said this:
The dramatic difference between how the proposed big three bailout is talked about, as opposed to how the Wall Street bailout was talked about
I claimed that folks in the liberal blogosphere were anxious to give even more handouts to wealthy bankers. I do recall the phrase “bite the bullet” being used to describe the necessity of bailing out Wall Street to avoid impeding economic doom. That the same impending economic doom would ensue in any failure to support workers at the big three isn’t getting much play in the comment sections—there’s an attitude of fuck ’em, we have to draw the line somewhere (so jeez, let’s draw it across the throats of working people). There’s a thread at Pandagon and one at Feministe (though Jill took her original post down after being called out on it), there’s one at Obsidian Wings—-I have no idea if any of those place meet your google ranking qualifications; I have never searched for anyone’s google rank (it’s irrelevant to whether or not I find a blog worth reading). Look around.
Has studying up and learning skills that might enable you to change your career to one where you have less risk of getting laid off come up?
Gee, thanks for the vote of confidence, RonF. Yeah, I do stay current with the Code, and have been far more vigilant with pursuing opportunities to expand my knowledge, but Shit Still Happens. Part of it is the nature of the industry itself (feast or famine), part of it is ongoing sexism in my geographic area towards women in the trades, but the fact remains—if I had the ability to travel, I would work year round. I’m a single parent, I value stability in my daughter’s schooling (we’re just now getting to that point where she’s losing the preemie-lag-time in learning; not in the mood to screw with the current success rate), so right now, I’m willing to trade a certain loss of income in return for the benefit of family stability (and lower cost of living—I’d be employed more often if i lived where you are—you’re the Chicagoland guy, no?—, because the track record of contractors vis-a-vis women in the trades is much better than it is downstate. The tradeoff would be a lower standard of living due to the higher cost of housing, higher property taxes, higher utility costs, higher childcare, etc. The pay scale is higher, but not enough to make up for the expenses. “Lower standard of living” in that instance also includes “less money to contribute towards retirement savings.”) Also, it probably bears mention that in my line of work, the best form of training and learning is on-the-job, working. Contractors are aware of that too, and tend to postpone layoffs to the extent that they can. I’ve never worked for anyone that wasn’t glad to see me come back, and I’ve heard around the hall that my good reputation precedes me (a lot of the brothers and sisters worked in other jurisdictions when the local scene went to hell in recent years—hence my current “management puke” job—and brought back well wishes from people I’ve worked with on the road. That made me feel good). Point being, that my layoff time tends to be short, and I use it as substitute vacation time, since my industry does not offer paid vacation time and I’m reluctant to take unpaid vacation time off.
In all cases, I’d rather be working than on unemployment. I do enjoy my work, and just as importantly, I take pride and find identity in it. There seems to be a default assumption that blue-collar people don’t take pride in our work; that we don’t feel an attachment to what we do. (hence, my reluctance to change careers. I can’t think offhand of anything I would enjoy doing anywhere near as much, and frankly, I don’t work in anything close to a “dying industry”, just an industry that is on the frontline to ebb and flow with the economy.) The people with those assumptions need to talk to my daughter, who I’ve thoroughly bored to death by pointing out he number of projects here and elsewhere that I’ve worked on (“look hon! mama worked in that building, too!” “yeah, what-everrr” gotta love nine-year-olds). I’ll bet those autoworkers filling in the boxes of their crosswords would rather have been building cars. There might not be television shows or feature films dedicated to telling our (labor) stories, but trust me—we feel the same pride that the recognized heroes (police, firefighters, military, doctors, etc) feel towards their work.
As for get some training and get another job, , that’s exactly what many people did in the 1980s, only to be in time for the new rounds of outsourcing in recent years in the tech and medical industries. It has been national economic policy to outsource as much work as humanly possible, while simultaneously slashing college tuition assistance and childcare assistance (necessary for those who have families to get that much vaunted retraining). This is not tenable. Free-market arguments about bootstraps and trying harder focus on individuals and the necessity to overcome odds, while ignoring the primacy of critical mass. Critical mass? Yeah—no bailout, and watch the U.S. economic card house fall. It’ll affect you too, RonF; you don’t have enough geographic isolation to escape the immediate fallout, and no one has enough isolation geographically or otherwise to avoid fallout from the full-scale crash.
PG
I’ve been at work all day and just checked back in. To reply, there may be some signficant cost differences between a traditional union stronghold like Detroit and some other plants in the south. But UAW does have representation in many Toyota plants in the south. My original point, though, was that the big 3 refused to produce quality products a long time before these latest problems came to plague. From the late 70s onward they have been playing catch-up and the latest debacle that was their trip to Washington recently shows them to still be behind where they should be.
My main concern is if we give these companies this money, then will they actually make the changes they say they will to make themselves competitive. They’ve been saying they will change for years. We are already sinking a shitload of money to try and free up the financial markets, I don’t want the government to throw in an additional 25 billion dollars into a black hole. These are not just problems of liquidity. These are problem of competitiveness. You can’t improve competitiveness by simply throwing more money at these people.
My main concern is if we give these companies this money, then will they actually make the changes they say they will to make themselves competitive.
My thinking? No. Throwing more money at these companies as they are currently structured just kicks the can down the road. Again I say; tell them “No money unless you go Chapter 11. Then we’ll finance your restructuring, which will include a complete replacement of current management and a renegotiation of contracts; labor, vendor, everything.”
As for get some training and get another job, , that’s exactly what many people did in the 1980s, only to be in time for the new rounds of outsourcing in recent years in the tech and medical industries.
So get some more training and learn another job. I’ve been in IT for a long time, but I end up working a different job in it about every 3 years. I spend time during job “x” training for job “y”. I don’t wait for something to happen and then train for a new job; I just assume that the job I have won’t last forever.
It has been national economic policy to outsource as much work as humanly possible, while simultaneously slashing college tuition assistance and childcare assistance …
Not sure what you mean by “national economic policy”. If you mean that it’s a policy set by the American government or some kind of conspiracy among corporations I’d say you’re wrong. If you mean that market forces are affecting most corporations in a similar fashion and they are all finding similar steps to be the path of least resistance to respond then I’d say you’re right.
(necessary for those who have families to get that much vaunted retraining)
Each time I retrained myself I used neither college tuition reimbursement nor childcare assistance. But then, I didn’t go to college to get training. I read books, got work to send me to a one-week training course a couple of years ago, and then studied some on company time and some on my own. So I got some assistance from my company, but I also used my own resources.
This is not tenable. Free-market arguments about bootstraps and trying harder focus on individuals and the necessity to overcome odds, while ignoring the primacy of critical mass. Critical mass? Yeah—no bailout, and watch the U.S. economic card house fall. It’ll affect you too, RonF; you don’t have enough geographic isolation to escape the immediate fallout, and no one has enough isolation geographically or otherwise to avoid fallout from the full-scale crash.
True. I have seen the Tier 1 support folks here (the people you first talk to if something’s wrong with your network) get their jobs outsourced to Poland. They’re just as smart as the people here, their English is passable, and their standard of living is lower so they’re willing to work for less than we get paid. The biggest factor in the adoption of this kind of outsourcing is not that all of a sudden the economy went south or people got greedy; the reason it happened is because technology developed to make it possible. The advent of high-speed networks based on faster and faster routers and switches, the replacement of copper wire with fiber-optic cables and the development of new protocols and new operating systems with better security means that someone on the other side of the planet can provide you with certain services as easily as someone in the same city. That wasn’t possible a few years ago.
So my choices are mixed. I can get out of the business and find a job to do that you can’t outsource. I can stay in the business and hope to hold on until retirement. Or I can keep increasing my skills and make it worthwhile for my employer to keep me on. I’ve chosen the latter. So far it’s working. I think it’ll continue to work for a while. Part of that is because the differential between my standard of living and the standard of living in areas where people know how to speak English and manage networks is dropping, so outsourcing is no longer as attractive as it once was.
Another factor is that people are finding out that there’s a difference between the American worker and the European one. The American worker works harder and longer. He or she doesn’t insist on going home on the stroke of 5 PM even if you have a Severity 1 outage that’s not fixed yet. The American worker doesn’t take 4 or 6 weeks off in the middle of summer. Their English is better (usually). They have more of a service mentality. And a lot of companies, especially financial ones, will not allow internal data to leave U.S. borders – and they interpret Piotr from Warsaw linking in to an American network or server to examine a network as just that. It turns out that the rush to outsourcing was not an unalloyed good to the companies that did it or their customers.
Critical mass? Yeah—no bailout, and watch the U.S. economic card house fall.
As I say above, I’ll favor helping out the auto companies. I just don’t favor helping them try to sustain the illusion that they don’t need to make radical changes. I’ll help them restructure, but I’m not in favor of throwing good money after bad.