They Auto Know Better:
Fueling Anti-Union Fires
by Walter Brasch
My local newspaper editor, as he does regularly, once again attacked unions as the problem in America. This is the same editor who once said “all the laziest goof-offs and goldbricks in the newsroom” where he began his career were union officials and that the unionized New York Times editorial writers are nothing more than “limousine liberals.”
For this most recent attack, two days after Thanksgiving, he combined the economy with what he believes are greedy unions.
“[L]abor unions and their leaders are . . . distorting the truth about the American workplace,” wrote the editor. First he set up Andy Stern, president of the Service Employees International Union, who said that “Tens of millions of Americans are working harder than ever just to stay afloat. The latest Census Bureau report shows that wages are dropping and more people lack health insurance . . . a greater percentage of the economy is going to profits than to wages.”
Then, he cut apart Stern’s statement by gleefully citing data from the pro-business pro-management U.S. Chamber of Commerce. The Chamber said that wages, adjusted for inflation, for workers rose 30 percent from 1967 to 2007. Now, 30 percent seems good unless you do the math. That’s about three-quarters of one percent per year, far less than any executive compensation. The editor then added in about 30 percent for benefits. Of course, these benefits also include federally-mandated deductions, like social security, Medicare, and unemployment taxes.
As an afterthought, the editor claimed the “poverty rate dropped from 22.4 percent in 1959 to 12.5 percent in 2007,” mysteriously trying to connect a reduced poverty level with reduced union influence. What he didn’t point out was that 1959 was a recession year, and that between 2000 and 2007, according to the Census Bureau, the poverty rate actually increased from 11.3 percent to 12.5 percent. About 37.3 million Americans are living below the federal poverty level; about 40 percent of all Americans fell beneath the poverty line at least once in the past decade.
Sounding the alarm, the editor tied together Democrats and unions. “[T]he plight of the American worker will grow more dire in the new year, as Democrats push to pass their legislation. . . . The danger is that their union-friendly legislation will hurt rather than help the American economy.” To wrap everything up, the editor of a newspaper with the median circulation of all dailies in America concluded by asking his readers to “consider the current state of the once mighty American auto industry, and ask yourself: What role did the powerful United Auto Workers play in its downfall?”
It’s the workers and those pesky liberal Democrats who the editor blames for America’s economic crises. Unfortunately, this editor isn’t alone in his contempt for the workers.
Dozens of columnists and TV pundits spread the myth that the average auto worker at General Motors, Ford, and Chrysler earns $70 an hour, about $146,000 a year. That figure, supplied by executives at the Big Three, reflects every cost associated with labor, including “legacy costs,” which are are costs of pensions and health benefits for retired workers. Thus, the automakers added up every conceivable cost and divided it by hours worked (pensioners, of course, don’t work) to get the inflated numbers. The reality is that the average UAW member earns about $28 an hour, about $58,000 a year, according to the impartial Center for Automotive Research. What the news media fail to report is that the UAW made significant concessions over the years, including wage cut-backs at Chrysler and a 2007 contract for all three auto makers that created a “second tier” wage level of $14.50?$16.23 per hour ($30,160?$33,758 per year, still below U.S. average wage of $40.405, according to the Census Bureau), reduced benefits, and a retirement plan now administered by the UAW not the Big Three.
Others who attack organized labor claim that UAW worker earn far more an hour than their counterparts at non-American non-unionized auto manufacturers in the U.S., and that’s a reason why the Big Three are failing. However, the reality is that the average wage at the international automakers is estimated at $24?-$25 an hour, less than a $3 differential an hour for UAW first tier workers, according to Jonathan Cohn in The New Republic. Even the most casual observer understands that it costs more to live in the Detroit area than the rural areas where foreign auto makers established their plants.
In contrast to the concessions given up by the workers, Big Three executives still earn multi-million dollar incomes. Alan Mulally at Ford earned $2 million last year, plus additional compensation totaling about $21.7 million, according to the Securities and Exchange Commission. Ford lost $2.72 billion last year. At GM, Rick Wagoner earned $15.7 million last year, according to the Wall Street Journal, while his company lost $38.7 billion. Chrysler’s Robert Nardelli earned $1 in salary last year, but has significant compensation package that is not publicly disclosed. Chrysler lost about $2.9 billion last year.
But, much of the media and the American public still blame workers and liberal Democrats who are favorable to the union movement for the economic crisis that led the Big Three to rev up their corporate jets and descend upon Congress to beg for a $25 billion taxpayer-funded bailout.
Are the workers and those liberal Democrats to blame for car sales being down 45 percent in October for GM, 35 percent for Chrysler, and 30 percent for Ford from a year ago?
Are they to blame for the auto industry going for the quick profit by pushing gas-guzzling minivans, SUVs, and trucks, while foreign automakers began looking at more energy-efficient cars?
Are they to blame that demand for autos has fallen off because Americans were unable to get financing in an economic crisis caused by greed of investment companies, banks, and almost every corporation that issues public stock?
Are they to blame for the auto industry executives opposing public transportation and alternative energy cars?
Are they to blame for auto executives being wrong about just about everything and for spending too much on everything from golf club memberships to private jets?
Are they to blame for the 100,000 factory layoffs in the past three years that also meant more work and no pay increases for every remaining factory worker?
Are they to blame for the auto industry outsourcing its work to countries where labor is paid pennies an hour and then reaping huge profits by downsizing America’s workforce?
Are the workers and liberals to blame for the auto industry cutting health care and retirement benefits in order to maximize profits?
Finally, are the workers and those liberal Democrats to blame because Big Three executives failed to understand that they needed to cut corporate costs when maximizing profits so they could reduce their losses during a Recession or for when their own bad business judgments would cause a catastrophic melt-down?
It may be in the best self-interest of non-unionized media to perpetuate the myth that the economic problems of America are because of the worker. However, such sloppy and inaccurate reporting isn’t in the best interest of the people.
[Dr. Brasch is the author of the recently-published Sinking the Ship of State: The Presidency of George W. Bush, available at amazon.com, bn.com, and numerous independent and chain stores. He is professor of journalism at Bloomsburg University. You may contact him through his website, www.walterbrasch.com or by e-mail at firstname.lastname@example.org]