Ocassional Thoughts of an Independent Progressive Atheistic Humanist
The great Ohio political blog Plunderbund had a great post about some stories appearing in the Columbus Dispatch recently calling for a compromise between the state GOP and labor unions in order to remove Issue 2 from the ballot. Issue 2 is the referendum over Senate Bill 5 that stripped collective bargaining from public employees. It turns out that the Dispatch was closer to the issue than they let on.
Like clockwork whenever an economic downturn hits a manufacturer, the “let’s blame the Unions” criers come out of the wood work. Basically the lie is that due to the massive wages paid to union workers, a company can’t compete with makers in other countries where labor is close to slave wage-wise. Never do you hear that it is the fault of management making poor decisions.
One lie being told is that a UAW member is making $70 an hour.
Sen. Jon Kyl: “For years they’ve been sick. They have a bad business model. They have contracts negotiated with the United Auto Workers that impose huge costs.The average hourly cost per worker in this country is about $28.48. For these auto makers, it’s $73. And for the Japanese auto companies working here in the United States, it’s $48.”
Well I think most union members would be thrilled with $70 an hour but in fact they have been giving concessions back to the companies for many years including a recent GM contract that had the Union take over providing health insurance for its members.
At the core of the new deal is the transfer of retiree health-care payments from GM to the UAW. GM will pay an estimated $35 billion into a trust designed to appreciate in value and pay health-care benefits for retired workers for at least the next 80 years, the union estimated. In return, GM is able to unload a $51 billion burden in retiree health-care obligations from its books, enabling the troubled company to borrow money more easily and move more nimbly against competitors. GM’s health-care liability is more than twice the company’s $21 billion market capitalization.
In exchange for giving up annual raises over the course of the contract and allowing GM to pay new workers a lower wage, the union got job-security assurances. The deal must now be approved by union leaders at a meeting Friday, then by union members. Analysts expect the deal to be ratified.
The credit crunch and other economic issues have hit all auto makers not just the US Big 3.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation’s second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.
“This is one way to look at the economy,” Art Wong, a spokesman for the port, said of the cars. “And it scares you to death.”
And some of the same people balking at providing a loan to the Big 3 didn’t have any trouble giving millions of dollars to foreign car makers to locate in the US
If it’s no surprise that Michigan lawmakers are behind the pitch for a $25 billion lifeline for Detroit automakers, then it might be just as predictable that Southerners would be leading the charge against it.
Southern politicians have spent years luring foreign automakers to build cars in their states, with huge success. South Carolina has BMW. Mississippi recently landed a major plant for Toyota Motor Corp. Alabama boasts plants run by Mercedes-Benz, Hyundai Motor Co. and Honda Motor Co.
After luring foreign automakers, Southerners have big incentive to oppose auto Detroit bailout
Then we have the excessive wages paid to the people who really don’t seem to have any ideas on what to do – the CEOs. For example in 2007, General Motors CEO Rick Waggoner made close to $20 million in total compensation.
But of course it is all the Unions fault – right?
Charles M. Madigan wrote an op/ed piece in the Chicago Tribune Tuesday complaining about Democrats deciding to take on retailer Wal-Mart. He starts out telling us about a couple of jobs he had that paid little for the amount work he did and the other negatives that came with it. Of course he makes the tired claim:
It paid a pittance, created an immense amount of sweat and made the drinking man thirsty.
The strange thing about these jobs is that I was happy to have them at the time. They put money (and at the fast-food place, stolen pieces of fried chicken for the walk home) in my pocket.
Also, those were the jobs available.
Then Madigan tries to give us an unemotional lecture on retail economics. He writes:
Work is honorable. I would love to see people make more money. I would like them to have comfortable lives, nice homes and, most of all, relief from money troubles.
Wal-Mart probably does too, so they would have more to spend.
The problem is that has nothing to do with the retail business.
The company is in a strong position in most of its locations because, I am sure, it is the only show in town for lots of people who are eager to work. It has crushed its challengers.
That spells relatively low wages.
Is that right or wrong?
The marketplace doesn’t make decisions like that. No one got rich working in a mom-and-pop corner store, either, so we should shed the notion that something noble has passed. Low-wage jobs are still what they have always been, low-wage jobs. The nation runs on these realities. Go read up on coal mining. People risked their lives for a couple of bucks a day, if they were lucky enough to get work.
Madigan is right. The desire to have people make more money and have unfettered lives has nothing to do with the system of retail business. It is just that – a system. It doesn’t control our lives, we control it. There is the human factor.
The humans who run Wal-Mart make the decision to move into a small town, undercut the local businesses in prices, and become the only game in town. That is their business plan. They manipulate the consumer and the system for their own ends.
The profits go to the owners – the shareholders. They spend money from their advertising budget to pretend they care about the community. The Wal-Marts of the world only care about the bottom line. Period.
I would have more respect for Wal-Mart if it played on a level playing field. The last time it did was back in the 1950’s when Sam and his wife Helen were “mom and pop” store owners in Arkansas and a large discount chain moved in. It seems they became rich….