Detroit's autoworkers should accept less pay
Excerpts from Wednesday’s Washington Post online reader chat with financial columnist Steven Pearlstein, on the UAW strike settlement.
Q. I sure would like all those people criticizing the UAW to consider taking a voluntary wage cut to $12 an hour and also paying sharply higher monthly premiums for health care. I also am sick of the term “legacy costs” rather than the reality: The companies want to break their contracts with retired workers because they are costly. … The workers are asked to contribute cash out of their pocket to pay for management’s poor decisions. The alternative: impoverishment.
A.Suppose a company’s wages and benefits have got way out of line, with serious consequences for the competitiveness and profitability of the company. It’s losing lots of money. If you are a worker, you can gripe and say, “Why should I have to take a $12 pay cut?”
Or you can say: “Look, we obviously got way above market for my set of skills, I had a good run at above-market wages, and now I have to decide if I want to work for a market wage, which is less, or try to earn more by looking for a new job. But I understand that if I don’t agree to cut my wage, there won’t be a company left to work for for very long, or it will file for bankruptcy reorganization and I’ll be paid $12 less anyway, only my pension will be seized by the creditors.”
You chose to see it only through the narrow lens of the worker and come up thinking it’s unfair. But was it “fair” that, for all those years when the Big Three owned the U.S. market, people paid more for their cars (on a quality-adjusted basis) than they should have so these workers could earn twice what other American workers did with the same skills, working under the same conditions?
Q. Yes, we have unions to thank for the weekend, and for much of the work-safety rules, and many other things that have been recognized to have positive net benefits in all jobs (mundane things like bathroom breaks). … When they have gone beyond that, they have effectively negotiated for things that workers really do not demand except in the context of the strike-game that they used to be able to control the outcome of. Now that that game is broken, unions should perhaps retreat to issues that are still broadly fair and relevant.
I think it would be fantastic if unions more enthusiastically fought for basic workers’ rights internationally, the lack of which in so many other countries puts American companies at a competitive disadvantage and ultimately threatens a wide scope of jobs.
A.Interesting take. I would say that too much of the energy of the union movement has gone into maintaining above-market wages and benefits for the old industrial unions and too little into organizing and winning acceptable wages for workers much further down the income ladder. This is why the Service Employees International Union has the right take on a lot of things, because the janitors and hospital workers and hotel workers and garbage collectors that it organizes are the ones who suffer the most economically and need the clout of collective bargaining to obtain basic things, like health insurance, sick days and pregnancy leave.
Q. This whole UAW issue makes me realize how irrelevant and out of touch unions are in America. Sweatshop workers in south Asia need protection, not these folks. Who do the UAW people think they are? I have never seen such entitled workers in my life. I have a college degree, master’s degree and work 50 hours a week (no paid overtime), I help pay my health insurance and know that once I quit I am fully responsible for it. So please explain to me why semi-skilled workers in an auto plant think they are entitled to free health care for LIFE and 100 percent job security?
A.When union members hear that they just see red, because they think they earned it fair and square. Their reference point is never the marketplace. It is always the last contract (and what the company executives make). And the UAW is one of the worst in this regard, because Detroit is such an insular business culture. It’s that insularity that led to Detroit losing touch with its customers. And it leads to union contracts that make sense only if you are sitting in Detroit.
