UAW Gets Bad Rap

The United Auto Workers (UAW) recently agreed to new, four-year contracts with auto manufacturers.  The agreements were ratified by the slimiest of margins.  A large number of workers, almost a majority, were, and still are, displeased with their hourly wage – their spendable income – the income badly needed to stimulate the economy.    

As is always the case, the UAW came under the altogether familiar, harsh and irrational criticism they always encounter when wages are at the heart of a dispute.  Management and their bidders immediately point to the total compensation package each worker receives to create an image of greed and unreasonableness within the union and its members.  

In early October Fiat Chrysler Automobile (FCA) workers rejected the first contract offer.  What followed were company press releases designed to divert attention from wage issues to create the image of extravagant demands.  The releases focused on auto workers earning more than $100,000 yearly in BOTH wages and benefits at FCA, Ford and GMC.  They naturally avoided any discussion of wage compensation - the heart of the dispute.

So, let’s look at wages.  Let’s see just how greedy these folks really are.

Auto workers have NOT had an increase in pay for a decade.  Under the new UAW agreement “veteran workers” will receive 3 percent increases in 2015 and 2017.  On average the numbers look like the following:

Current      Increases    New Yrly.

$15.78         $6.72           $31,470

$16.66         $7.34           $36,109

$17.53         $8.47           $41,870

$18.41         $9.59           $48,589

$19.28         $10.42         $56,181

The new pacts put workers hired since 2007 on a path to full wages within eight years.  The membership complained that was too long.  It became a major bone of contention. 

Next is the fact that different salary levels exist in different plants around the country.  Therefore, another response to worker demands was that the total compensation packages in southern plants are some $40,000 less than in northern plants.  It is certainly less expensive to live in Alabama than it is to live in a major metropolitan area like Detroit.  While Alabamans may live comfortably, those in Detroit are struggling. Using Alabama as a means to club Michigan into submission is no different than sending jobs overseas to reduce wage costs to slave labor levels.  This tactic provides not one scintilla of benefit to the American economy.  

The numbers clearly reveal that UAW workers are hardly going to get rich.  Spendable incomes needed to generate an equivalent lifestyle to that enjoyed in the 1960’s would require wages – JUST A WAGES – to exceed $100,000 today.  How negatively would our economy have been impacted if wages had kept pace with inflation?  If the average American workers had gradually advanced forward to making the $100,000 a year income commensurate with meeting the demands of inflation, commensurate with maintaining equal levels of spending power over the years, would we have been less prosperous?  Based upon today’s realities, auto worker demands for increased wages - spendable income – the income badly needed to stimulate the economy – are hardly out of line.  If anything, they are very meager. 

Which bring us to benefits. 

If we are to believe those costs are exorbitant then we need information that is not readily provided and available.  When dealing with the large numbers of individuals under UAW contracts it is safe to conclude the administrative costs alone are likely considerable.  Are those costs met with just union dues or are they part and parcel of the health care package contained in the contract?  We would also need to know how aggressively union officials seek out and employ the most competitive bids for health insurance products and services. 

What we already know is that health care costs alone stretch and burden budgets for everyone today.  A family cannot be without that very expensive security and protection.  To suggest that auto workers or any other employee is getting fat off of this reality is truly disingenuous.  

And the final point:  Is the company burdened or threatened by all these deceptively perceived extravagances?  

Ford Motor Company reported record profits again this year.  As we have seen on more than one occasion, their financial security and mismanagement is insured by federal and state governments as their higher echelon employees enjoy lavish lifestyles. 

This is issue and struggle is reminiscent of the awful battle Minnesota Governor Mark Dayton had to fight in attempting to attain increased salary levels for his state commissioners.  Why are we so terrified at the prospect of an affluent middle class when we know that was the key factor in ONCE establishing America as the greatest country in the world???  We can be our worst enemies.