Saturday, December 06, 2008

Middle-Class UAW? How About Upper-Class.

Maybe the chart above offers one reason that 61% of the American public oppose a bailout of the troubled U.S. auto industry.

According to
data from Chrysler, a UAW assembler earned $64,100 in monetary wages in 2006 (not including benefits), and a UAW electrician earned $74,800 in monetary wages. According to BLS data (available here from Economagic), the average manufacturing wage in mid-2006 was $16.78 per hour, meaning that the average manufacturing worker earned cash income $33,560 in 2006, or about half of a UAW worker.

Stated differently, a UAW assembler earned 91% more in monetary wages than the average worker in the manufacturing sector, and a UAW electrician earned 123% more in wages than the average manufacturing worker.


Moreover, there's been a lot of discussion lately about how "unions built the American middle class, and the middle class is what makes America run." But is a typical UAW worker really "middle class"?


Consider a married couple, both UAW workers, one assembler and one electrician, making a combined household income of $139,000 in 2006. Is that a "middle class" household? Hardly, it would be an upper class household, since that household income would put them close to being in the top 10% of American households (see
2005 data here, I'm assuming that UAW wages in 2005 would be comparable to 2006).

Considering that $44,389 was the median household income in 2005, even a single-earner UAW household would definitely be in the top (upper) half - a UAW assembler earning $64,100 would be in top 35%, and a UAW electrician earning $74,800 would have been in the top 28%.

This is actually a tribute to the amazing success of the UAW - it was able to not just build a middle-class of autoworkers, it was actually able to elevate its members from the middle class into the upper-income class, even though most UAW workers had (have) only a high school degree. Unfortunately, that success could not be sustained in the long-run, and UAW wages have to come to back down to realistic levels, e.g. the $16.78 average hourly wage that prevails in the rest of the manufacturing sector, before the wages push the Big Three into bankruptcy. Is there anything so special about auto assembly manufacturing work that it justifies a 91% premium over the rest of the manufacuring sector? I don't think so.

44 Comments:

At 12/06/2008 9:20 PM, Blogger PeakTrader said...

The "$44,389 was the median household income in 2005" is only for wages and salaries. Info in link below (100 YEARS OF U.S. CONSUMER SPENDING, BLS REPORT):

http://www.bls.gov/opub/uscs/report991.pdf

 
At 12/06/2008 10:35 PM, Anonymous Don Lloyd said...

"...According to data from Chrysler, a UAW electrician earned $64,100 in monetary wages in 2006 (not including benefits), and a UAW electrician earned $74,800 in monetary wages. According to BLS data (available here from Economagic), the average manufacturing wage in mid-2006 was $16.78 per hour, meaning that the average manufacturing worker earned cash income $33,560 in 2006, or about half of a UAW worker...."

Typo - should be 'assembler'.

Regards, Don

 
At 12/06/2008 10:38 PM, Blogger Mark J. Perry said...

Don: Thanks, it's fixed now. Thanks for pointing out the typo.

Mark

 
At 12/06/2008 10:56 PM, Blogger bix1951 said...

Too many secrets
I wonder why public companies are not more forthcoming with the details of income and expenses. I would think that info should be open to all.
Lots of complaining about wages of UAW workers. How many salaried at GM? What do they earn? Could they be let go to save money?
Heard a great thought from a Siemens exec.
"Don't worry about the economy unless you have 100%market share."

 
At 12/06/2008 11:03 PM, Blogger OneCleverCookie said...

After having worked in several capacities in the automobile business from retail sales, F&I Manager, and finally an UAW assembly line worker, I know first hand that this bailout is targeted to help the Unions survive. If the Big 3 were to go Chapter 11, they would survive, albeit not as heartily, but survive none the less. These companies Cannot compete with these mill stone labor contracts around their necks. It's just that plain and simple.

 
At 12/06/2008 11:10 PM, Blogger bix1951 said...

"I always tell my salespeople-if you don't have 100% market share why do you worry about the economy? Worry about the customers and key competitors."
Joe Kaeser being interviewed by Maria Bartiromo.

 
At 12/07/2008 3:57 AM, Blogger bobble said...

here's the problem in the united states right now; there is plenty of 'supply', there is no demand. the last ten years of demand has been heavily financed by mortgage equity withdrawals. that dog no longer hunts.

american workers have been downsized, offshored, replaced by H1-b's, union busted, and underpriced by illegal immigrants. basically they have no pricing power. they consider themselves lucky to have any job at all, forget the pay. we can debate whether this is 'fair' or not. but, the reality is, they just don't make the money they used to.

if you want the economy to improve, you need to increase demand, not supply.

 
At 12/07/2008 5:08 AM, Blogger Tom Davis said...

"Is there anything so special about auto assembly ... I don't think so."

Of course it doesn't actually matter what you think, it only matters what the market will bear. And as it seems that market is not willing to bear such high costs you might have mentioned that.

Of course the market does seem to bear a significantly higher wage for assemblers, just not quite that high. If only UAW workers were significantly more productive, then the market would even bear that.

I would be very interested in seeing the relative productivity of UAW members vs. workers at other auto-assembly plants in North America.

 
At 12/07/2008 10:04 AM, Blogger mwf247 said...

Response to bix1951-
I have been a salaried worker in the automotive industry for 29 years, and I would be happy to shed some light on that situation. First of all, where have you been if you have not heard of all the salaried employees being released? Granted, the hardships faced by salaried employees are always kept much lower key, because the media only seem to want to report issues that affect the union. There have been so many things that have been indiscriminately taken away or changed over the years, I can not remember them all, but to list a few: 5 supplemental days off, COLA, raises, increased pay for health care, stock savings, overtime not paid, etc. And I am an engineer, and make less that the UAW electrician. How’s that for fair wages?

 
At 12/07/2008 12:11 PM, Blogger Walt G. said...

I knew I should have been a UAW electrician instead of a UAW pipefitter; they make all the good money :)

I can't argue about the wage amounts. They seem about right. However, I think the transplants need to be on your graph. And UAW skilled trades should be compared to non-UAW skilled trades.

I would also like to point out that many skilled trades have at least associate degrees or better and spent four years in a rugged training program, which included college courses, being paid less than a line worker for 1/2 of their apprenticeship. With production downtime costs calculated in the hundreds-of-dollars-per-minute, don’t think a good skilled tradesman is not worth his pay. Would you pay $33-per-hour for someone to fix a machine that is making 20 hoods-a-minute at $300-per-hood? I most certainly would, no matter how you look at it, that’s pretty good ROI.

The 2007 UAW/GM contract actually provides wages for new hires less than the average worker in the manufacturing sector. Is that a kick in the butt or what? Any rational discussion of what the UAW should do has to include what they have already done: Read the 2007 agreement if you want to be fully informed instead of brainwashed. Sure GM has problems, but has anyone noticed that there is a worldwide recession going on? How could you handle a 40% drop in revenue/income? Don’t let the gloom and doom GM naysayers, who are actually more interested in union bashing than looking at all the relevant financial alternatives, keep you from examining all the facts.

 
At 12/07/2008 4:10 PM, Blogger OBloodyHell said...

HEY!!

The UAW just wants it all to be FAIR!

And they're going to fight for higher wages until EVERYONE in AMERIKKKA////// sorry THE OBAMA NATION has an above-average income!!

Hey, it's only Right and Just.

:oP

 
At 12/07/2008 9:53 PM, Anonymous Anonymous said...

just for grins, along with your anti-union arrogance, ("why are these mere **proles** making good money?!?"), would you like to put up a comparison chart between UAW wages vs., say, the wages of college professors at public universities?

make the graphs for wage growth with bennies from 1970-present? making sure you include the professorial 3-month summer break in the calculations?

would you like to bet which graph would be steeper? which group's wage growth would be more meteoric? which group makes more than the other?

didn't think so.

just as plumbers are more beneficial to a society than are philosophers, so too are autobuilders than professors. philosophy doesn't get you running water; professorial pontifications won't get you from place to place reliably. mock the useful people at your peril, friend. or maybe you and you alone have the power to make things work by merely *talking* about them working.

 
At 12/08/2008 3:43 AM, Anonymous poor boomer said...

Class is about more than income; it's also about how you make your living and your degree of autonomy in making your living.

There are class differences between business owners, business managers, and hourly employees.

A well-paying manufacturing job does NOT make one upper class.

 
At 12/08/2008 8:38 PM, Blogger mwf247 said...

“Anonymous”
In the graph you are requesting, the top of the “UAW” bar would be far too close to the top of the “college professor” bar, which is a big reason the automotive industry is in such a predicament. Are you saying that you can justify UAW wages because you can find a wage that is actually higher? One wage is based on free supply and demand market, and the other is based on an artificially forced wage that is out of line with other jobs having the same requirements. Also, there are various ways to judge what is “beneficial to society”. You have offered one. I would venture that many of those “makers” you hold in such high regard are very likely “taught” by someone. And depending on what they make, it might even be a professor.

 
At 12/09/2008 8:29 AM, Blogger Naunihal said...

Mark -

how do you square the numbers reported by the car industry with this? I'd love to see a post which breaks down the different claims made by the different sides on the issue of base pay alone.

http://www.associatedcontent.com/article/1234921/average_uaw_pay_28_not_70.html

"The UAW reports, and news organizations have confirmed, that the average wage for a veteran auto worker is $28 per hour. Many cashiers and nurse aides and burger flippers still will perceive that this is too high, but at least the number is in perspective. Furthermore, the Big Three automakers have negotiated to bring general entry level wages down to as low as $12 per hour."

 
At 12/09/2008 9:23 AM, Blogger Walt G. said...

Well, at $12-per hour, guess who will pay to send those workers' children to college. You can either pay someone enough to provide for themselves and their families or subsize them through other means. The same goes for not provding affordable health care to employees. Don't automatically assume savings at the employers' end does not end up being a cost at the taxpayers' end.

 
At 12/09/2008 2:53 PM, Anonymous Anonymous said...

To Anonymous,
Let's see... after 4 years of college, then 5 1/2 years of PhD training (living off of a stipend about half of a non-unionized assembly worker), 5 years post-doctoral training (living off of a wage comparable to that of a non-unionized assembly worker) I finally land a professor job at an Ivy League University. And my salary is... less than than a UAW electrician. So yes, I would be happy to look at a comparison between UAW workers and college professors, and it would become very evident that pay in this case is not commensurate to the level of training.

 
At 12/09/2008 3:03 PM, Blogger Benjamin said...

There's clearly a flaw in comparing a relatively specific category like "UAW Assembler" to a much vaguer category like "Manufacturing Average." Much less using annual totals, rather than non-overtime hourly rates. On the other hand, the prole-defending Anonymous is quick to set their sights on salaries for philosophy professors, and the Michigan system's numbers don't exactly support such a case: The handful of people who are able to get jobs in a major university system like UMich fall into the UAW salary spectrum after promotion to Associate. I suppose I'm more disappointed in the Economist/Management Professor's laziness than the anonymous class-baiting of the commenter, but none of it is particularly illuminating.

I might also observe that anyone so passionate about unionized auto workers might also have some sympathetic thoughts for other workers who organize themselves into dues-collecting, collectively-bargaining labor organizations.

 
At 12/09/2008 3:20 PM, Anonymous McDruid said...

Wow!

Except those numbers aren't true.

First of all, you use industry propaganda figures to compare to data from a different source. What does the BLS say about the auto workers?

$49,270/yr for all Motor Vehicle Production workers (Union & non). "Team Assemblers" is $42k/yr.

http://www.bls.gov/oes/current/naics4_336100.htm#b51-0000

Secondly, why are you comparing "Electricians" to "Manufacturing Average?" I'd expect electricians to get paid more (or at least differently).

Thirdly, the BLS table you link to only gives hourly wages, not yearly. Thirdly #2, why don't you use BLS data directly?

All-in-all, this continues the same kind of dishonest reporting you showed in your tables on hourly UAW wages.

 
At 12/09/2008 3:38 PM, Anonymous Anonymous said...

The original article strikes me as fundamentally dishonest. I'm not sure the "average manufacturing job" is anything like an autoworkers job. The vast amount of manufacturing that remains in America is light manufacturing isn't it? Does this "average manufacturing job" include textile manufacturing? Does it include t-shirt screnprinters? Does it include producing kitch items for museum shops? What is the average manufacturing job?

Besides that it is so ugly to see someone who would so begrudge a worker his salary that he wold hold them up to ridicule and class jealousy. Didn't we used to pray "Bless the hands that have nourished us" before meals? Now some prick wants to push the average salary for someone who works with their hands and stands on concrete all day down towards 35K?

Lastly if the big three go and their unions are disbanded what is that the pay going to be for that average manufacturing job going to be? You get rid of the high salary manufacturing jobs is the horrid reality that a non-union manufacturing job is more like 20-25K going to become apparent?

 
At 12/09/2008 3:42 PM, Anonymous Roger B said...

Everyone points the fingers and seems to have an opinion that that 'other guy' doesn't deserve what he is getting. In most cases, those UAW workers are good, hard working people that traded years of work for years of school. Does it make them less of a person? Who are you to say they don't deserve their salaries?

To the professor of the Ivy League university, your earning potential is now much higher than a line worker, yet you are complaining about the years you had to live on a stipend in order to get to your level. A line worker works now at $12/hour, just above burger manufacturing, in order to make ends meet, and his earning potential is never going to be as high as a professor of an Ivy League school. For that matter, Mr Perry, who's income is listed as 108K/9 months; are you worth that amount? How do you justify it?

I am biased, and admit it. I believe unions help every worker, directly or indirectly. Study their history and we often all benefit from the work of a few who were able to stand up, often beaten or killed, in order to have basic human dignity. I don't care if you make a million a year or $8 an hour, you deserve the same dignity. We so easily forget this when times are tough.

The only criticism I agree with is the belief that the UAW is more concerned with the job held, not the person holding that job. That's not referenced in the article, of course, but a common sentiment.

 
At 12/09/2008 4:28 PM, Anonymous Anonymous said...

This is a very dishonest post in any one of a number of ways.
It's also telling that you don't reply to the honest criticisms.

If I were you, I'd be slightly ashamed - this sort of blatant manipulation of facts and figures (using BLS figures in one case, ignoring them in another; using the MEDIAN as a meaningful statistic to judge class representation, etc.) is something you expect out of a Fox News correspondent...

Actually, they're usually slightly better.
There's plenty of ways to criticize the unions - and plenty of ways to criticize the board rooms - but doing it in such a purposefully lazy and misleading way calls into question the validity of anything that comes out of your mouth.

 
At 12/09/2008 5:05 PM, Anonymous Anonymous said...

Not commenting on the article itself, which (as others have pointed out) has errors. But instead, focusing on some of the comments above...

There is no validity to this line of reasoning: "I worked hard doing x for n years, spent y dollars on school or training, and I still make less than somebody who did something else." I understand your frustration, but your wage is not a reward for training. Doctors are not expensive because medical school is expensive, but the other way round. If you have an MBA from Stanford and you make less than a bus driver, then go be a bus driver and quit complaining.

 
At 12/09/2008 5:28 PM, Blogger Jack said...

I am curious as to how many hours the UAW workers are putting in to pull down these annual totals?

Your BLS worker seems to be putting in 2000 hours a year.

 
At 12/09/2008 5:54 PM, Blogger Tom said...

If the big 3 has steered their production into making vehicles that people would actually buy, and stopped spending money suing the government to avoid raising their fuel economy averages, we wouldn't be here.

Blame the worker for their blind confidence in the nit wits running the companies and not seeing the inevitable result. Discussing worker salaries at this point is just diversionary.

 
At 12/09/2008 6:02 PM, Blogger The Littlest Gator said...

you miss the point entirely. It is not that the UAW guys get too much, it is that non union manufacturing jobs get paid too little. Don't punish the union for doing it's job and getting some of the millions from the fat cat owners and making sure the actual hard working employees get paid a fair and living wage. 33,000 for a tiring, difficult and often dangerous manufacturing job is criminal.

 
At 12/09/2008 7:22 PM, Anonymous Anonymous said...

I love how everyone carps about union wages. How 'bout this for a comparison: workers versus execs? If these executives can take home multi-million dollar compensation packages, while running the company into the ground, why should everyone bitch about the guys doing an honest days' work?
Remember folks, it's not the workers designing these cars, and making the financial decisions.

 
At 12/09/2008 10:05 PM, Anonymous mcdruid said...

I think those who are asking about Dr. Perry's university salary are barking up the wrong tree. How much does he make from the Mackinac Center for Public Policy, and who funds them?

It doesn't take a lot of education or brights to reverberate industry propaganda.

(A quick glance at the Mac Center home page indicates that they have global warming denialists on board, that may be a clue as to who funds them.)

 
At 12/10/2008 11:28 AM, Anonymous Anonymous said...

I heard a UAW worker the other day on the radio saying that he was collecting his retirement and in two years, when he could collect SS, that SS amount would be deducted from his retirement amount.
Thus keeping his retirement income the same.
How in the world did that come about?
I can't imagine the union members agreeing to something like that.

 
At 12/10/2008 5:59 PM, Anonymous Anonymous said...

Death of Detroit....thank the UAW!

Here are some quick facts:

1) $1,500 to $2,000 of every car goes to pay the health care costs and benefits of UAW employees.

2) GM pays $17 Million dollars a year for Viagra

3) $75 is the average cost per hour of an autoworker. That is based on a 40 hour work week - with overtime this figure gets even more ridiculous.

The UAW will say, "Well, that is not their hourly take home pay". The bottom line is it costs $150,00a year to keep an autoworker employed, with overtime this figures goes up.

People with MBAs, PhDs and business owners don't make that after expenses -

Capitalism is an interesting thing in that market forces determine what somone or something should cost - let the UAW workers find other jobs -then we will see what their true worth is - keep in mind if they made good cars at a good value they would not be in this mess!

 
At 12/10/2008 10:20 PM, Anonymous Anonymous said...

My father has worked for GM for over 35 years. His college education was cut short after three years because of his military service in Vietnam and he has received numerous amounts of specialized training and education for the work he does in the auto-industry. I definitely would consider are family middle class because of the financial and economic circumstances we face. I've experienced the medical insurance cuts, seen the layoffs, and witnessed the anxiousness felt by auto-industry communities. My father makes pretty good money, not anything like the averages reported in other posts, but because he has worked his way up through a company and remained loyal to them. Younger generations will never consider working at a company for their entire lifetime because they fear they will be screwed come retirement time. (which is whats going to happen to these workers without the bailout). And yes, these industries are trying to cut out workers and lower wages. My father is offered a buyout weekly to retire but doesn't because he is still healthy enough and young enough to work. Plus, he doesn't want to be a wal-mart greeter. Over-time is almost unheard of and there is an extremely long waiting list to get the work. I come from a family of five. I am the youngest and I am about to finish up my senior year at college. My parents probably help me with about 10% of my college fees because that's all they are able to. I work with truly lower income people and many of them are previously laid-off works from industries that went international. What's so wrong with a company trying to provide well for their employees instead of focusing on making the largest profit possible. America better start learning how to take care of their own soon or we will all be in a much more severe economic situation than we are now.

 
At 12/10/2008 10:25 PM, Anonymous peter said...

One equation you have to figure into the annual wages of the UAW auto workers is the number of hours worked per year. Case in point- you may try to take the gross wages and then include benefits, then divide it by 2020 hours and arrive at an hourly wage that might be schewed. I had three neighbors who all worked at Ford as assemblers. Those guys worked 6-10 hour days a week and sometimes a 7th. If you start figuring in 2 hours of time and a half per day, 8-10 hours of time and a half for Saturday and 8-10 hours a day for occasional Sunday work it can drastically affect the year-end wages. Then this information is erroneously used as ammo against the workers- they work the manditory overtime then catch hell from everybody for making so much money by year's end. You need to figure their wages on a basis of 2020 hours of straight time and about 300-400 hours of overtime on average. 350 hours of overtime is equal to 525 hours straight time, add that to the 2020 hours and you get around 2600-2700 hours. That same thing happened where I used to work- I had to work double-shifts on m-w-f of each week sometimes. At the end of the year I was wore out. Then some folks said I must be one of those greed union workers (I am union)because I would end up making $50K per year. Nothing like working 60-70hr work weeks in 120-135 degree heat and being accused of being greedy. Some people ought to try working 16 hours in that heat then trying to stay awake to get home,then be back to work inside of 8 hours. No wonder safety was bad.

 
At 12/10/2008 10:51 PM, Anonymous Peter said...

Dear Mark, one might consider the BLS average manufacturing wage in the US that you cited of $16.78 is not keeping up with inflation due to the pressures of out-sourcing/off-shoring of manufacturing. Everybody is right where the corporatists want them- running scared for their jobs, no time to ask for a raise/ too busy trying to maintain our healthcare and competing with the Chinese $1.00 hour wages with no beanies. Point is- a lot of the workers that have been able to continue to advance are the union folks who can bargain for better wages and benefits. The desparity in wages and benefits between union vs. non-union is about 27%. You say if a married couple make $139K together they are no longer middle-class, interestingly enough just last week they had a show with people that were marginally millionaires- net worth of $3-4 million, and they felt they were "middle class millionaires" because they still worried about healthcare, their children's educations, etc. GEEZ. A married couple probably put in overe 5,000 hours of work for that $139K don't forget- you see, it is just a matter of how you spin it. The government considers a company with $50,000,000.00 in annual sales "Small business". With a 20% profit margin that would be $10 Million. Would you consider that "small business" in the same order that you would consider two people working to make $139K way out of line???

 
At 12/11/2008 2:03 AM, Anonymous DJ said...

I live in Anderson IN (pop. 60,000), a former GM town. Current median income for a household is $32,577 (less than the price of a new Chevy 1500 truck). There were 3 different GM factories that hired 20,000 to 30,000 employees. With A-Buyers discount, how many of those families bought a new GM car and a new GM truck or a sportscar and a used GM vehicle for their kids a year. They could buy them, drive them for six months and sell them for $1,000 above the purchase price of the next years model. How many are doing that now? They have been forced into retirement and may buy one as the warranty runs out. As jobs were lost to automation and foreign plants my father would say..."Who do they think are going to buy their cars!" As jobs were outsourced to Elwood to a non-GM UAW factory and the sons of the Anderson GM UAW employees were hired at $11/hr, my father would say "Do you really think they are going to be able to buy a new GM car?" It seems obvious that demand is gone. Jobs and demand have followed the money overseas. Did you see the news special where GM may make Russian car manufacturers extinct? Where did the capital to do that come from? Did Russia give them that money? There are currently less than 75,000 GM UAW employees. My town had over a third of that at one time. Who decided to change that? Both sides did. If Delco went out on strike, it shut GM down in a week. So it seemed GM decided to divide and conquer. Hope they like their spoils.

 
At 12/11/2008 2:23 AM, Anonymous Anonymous said...

To the person that has 14.5 years of higher learning, congratulations. Meanwhile, another person has been working those 14.5 years at the same place, doing the same thing, exposed to the same workplace hazards, toxins and same bad jokes. They have went through an apprenticeship and are now a journeyman. They probably work for someone like you that's underpaid, fresh from the land of academia full of ideas and no experience, who knows everything about everything except for what that person has learned over the past 14.5 years. Hopefully GM keeps you around long enough for you to absorb what they have learned and maybe you can fix GM's problems.

 
At 12/11/2008 2:27 AM, Anonymous Anonymous said...

The CEOs of Chrysler Group, Ford and GM earned a combined total of $24.5 million in salaries, bonuses and other compensation in 2006.

And to think you foolishly thought the stockholders only paid $17 million a year for Viagra!

 
At 12/11/2008 2:38 AM, Anonymous Anonymous said...

I attended classes and labs where the grad assistant was doing all the work while the professor was concentrating on their grants. Grant money which benefits the pockets of the university and the prof.

 
At 12/11/2008 9:26 PM, Blogger Greg O said...

I would like to see some statistics on how much money has gone from the average worker's wages to the upper management. We often hear about the huge wages and bonuses management get, yet they still seem to run their businesses into the ground each recession. If you went back to the lower management wages and distributed that income and bonuses to the workers, then I believe workers would all be getting higher wages. Those higher wages would enable them to buy new cars and pay off their mortgages.
The absurdity is a company is not supposed to be uncompetitive when it pays its management high wages, but is uncompetitive when they pay their workers higher wages. Money is money and it comes out of the profits no matter who it gets paid to.
This union bashing is just a smoke screen for giving the money to the rich instead.

 
At 12/12/2008 1:28 PM, Anonymous Anonymous said...

Supply, demand, and competition apply to executives a lot like they apply to groups like the UAW. It may take more market influence for things to shake out than in other cases, but the rules are still basically the same. You can't expect to haul down a salary well above your "comparable peers" in any market for very long, especially in markets that become global since they have a tendency to support more competition. When you cost yourself out of competition and/or market demand, you eventually fail. Greed, foot stomping, finger pointing, and fact bending don't increase your market value and so have no effect. Working hard to create a desirable product at a competitive price (free from influences that would alter value or price) has a much stronger effect, even in times of recession.

 
At 12/12/2008 7:16 PM, Blogger Greg O said...

"Greed, foot stomping, finger pointing, and fact bending don't increase your market value and so have no effect. Working hard to create a desirable product at a competitive price (free from influences that would alter value or price) has a much stronger effect, even in times of recession."

Giving $x of company money to management instead of union workers makes no difference to whether their products are competitive or not. This talk of the UAW reducing their wages is fine, but often in the past this money just ended up in bonuses and wages for management.

When workers spend money they stimulate the economy, we know this because economists are proposing stimulus the same in effect as giving workers a pay rise. The problem with the car industry may not be the UAW being too strong, but too weak and not covering all car factories in the US.

All that is happening now is since progressive taxation has lessened the profits are going more to the rich instead of the working class and so people cannot buy things and pay their mortgages.

 
At 12/12/2008 9:53 PM, Anonymous Anonymous said...

There is enough blame to go around. People complain about the salaries of the workers and people complain about the salaries of the CEOS. They both are taking to much money out of the business. but the most money spent is not in salaries but in extras. The brass get bounses and stock options. UAW put in things noone else ever heard of like a fund of if you lose your job and run out of unemployment you still get 3/4 of you salary. if you get $64 an hour you still get $48 for sitting on you butt. Nobody deserves that. If you have a company in trouble everyone needs to tighten their belt to help. If you don't want to help bail out and find another job if you can. That goes for everyone from the boss on down. The stock owners are supposed to make sure the boss does.

 
At 12/12/2008 10:25 PM, Blogger Greg O said...

I don't think the bailout is a big deal, the car companies have paid far more than this in taxes over the years. Bailing them out can be seen as a tax refund or an investment to get more tax revenues later.

The high oil prices were caused by oil speculators linked to Republicans, because Saudia Arabia and other based their prices on the BWAVE system, using the futures markets. This is what caused the car company problems not mismanagement and not the UAW.

The problem is if this is an excuse to weaken unions in general. Breaking unions has always been a way for management to get rich, and weaker unions will just lead to the profits going to management instead of workers. Balance needs to be restored between labour and management as it is in many overseas countries.

The UAW needs to make concessions like the shareholders and management are losing money and stock value. However GM and Ford have been profitable for a long time paying high wages rather than giving all the money to management, and there is no reason why the key to making cars in America is to rip off workers for CEO bonuses and stock options.

There is only so much profit to divide between management and workers, and to press for your share is not class warfare.

 
At 12/28/2008 7:39 PM, Anonymous Anonymous said...

well.. i don't have alot of facts, figures, ect to base my opinion but i do know this. I've worked as an assembler and tech in the aerospace industry in a non-union shop and make ~$19.00... after 10 years.. and the idea that some one who does the floor work in developing flight controls makes on average less than some one stamping hoods sounds a bit off balance

 
At 1/11/2009 5:07 PM, Blogger Machiavelli 2.0 said...

Poor boomer -
While you are certainly right that a manufacturing job, however well paying, does not make one upper class, and also that there is a class difference between different types of workers (hourly, managerial, owners), I think you overlook the far more fundamental elements of class.

You say: "Class is about more than income; it's also about how you make your living and your degree of autonomy in making your living."

But the truly upper class don't earn a living at all - they inherit it. I would argue that class is defined by living only to a small extent, but by education, manners, tastes, degree of culture, and social connections far more so. For instance, Donald Trump meets your standard - he owns his business,and quite obviously makes a nice wage - yet he is not and will never be upper class. The only way to become upper class is by birth or marriage.

 

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