Who's benefiting from the largess?
By Robyn Blumner
St. Petersburg Times
By Robyn Blumner
St. Petersburg Times
We are too generous to workers. That is the mantra
repeated over and over as the reason for the foundering of America's
great industries. Last week we heard it from the automobile industry,
the week before it was the lament of the airlines, and in prior years
the tune was sung by steel and textiles.
Apparently we can no longer afford the luxury of
providing America's industrial work force with a decent living, health
care and retirement security. Top executive pay may still be climbing
through the roof, but rank-and-file labor costs in America's
manufacturing sector have nowhere to go but down, with China as the
model.
Wall Street cheers any move in that direction. General
Motors stock climbed 7.5 percent on the day last week it announced that
a tentative agreement has been reached to cut health care expenses for
union members and retirees by $1 billion annually. The stock rose even
as the company reported its largest quarterly loss in more than a
decade.
Owners like to celebrate when workers lose out.
Can you imagine being a Delphi employee today? The
country's largest automotive parts maker filed for Chapter 11 bankruptcy
on Oct. 8 as a way to get out from under its labor contracts. Delphi's
33,000 hourly workers across the United States, who now make an average
of $27 per hour, may be looking at $10 to $12 per hour going forward.
You tell me how a family that budgeted for a $56,000
annual income cuts corners to live on $25,000. It doesn't happen without
homes being foreclosed on and kids being pulled out of college. But even
that much sacrifice might not be enough. In China, Delphi's workers make
$3 an hour. How does $6,000 a year sound?
Oh, and Delphi's workers shouldn't bother looking for
relief from the bankruptcy courts. At the behest of the credit card
industry, Congress has transformed those courts from places where
Americans could get a fresh start into collection agencies, where debts
become burdens in perpetuity like the chains on Jacob Marley's ghost.
But if you're a big company looking to abrogate promises
made to Joe Lunchbox after he put in 20 or 30 years of loyal service,
the courts are open for business.
If Delphi workers won't agree to concessions that
undercut their way of life, the bankruptcy court will do it for them. If
United Airlines has underfunded its pension system by $9.8 billion and
Delta Airlines by $10.6 billion, no need to fret -- the bankruptcy court
will wipe away the liability and sock the federal Pension Benefit
Guaranty Corp. with the bill.
I understand that these companies are waking from the
opium dream of protectionism and that some of their promises have been
unrealistic for a long time. But why is it that workers alone seem to
end up paying for decades' worth of myopic decision-making by
management?
Take the American auto industry. Why did it take Japanese
competition in the 1970s before Detroit started making more dependable
vehicles? Why has the industry fought so hard to hold down fuel economy
standards when a little innovation on this front could have given the
industry a competitive edge?
Rick Wagoner, the chairman of GM, whines that $1,500 of
each car sold goes to pay health costs, a burden that their competitors
in Japan and Germany don't face. Well, guess what? Those countries have
national health care programs.
Maybe if GM and the rest of our dying auto industry had
spent as much time and money supporting the Clintons' health care plan
in 1993 as they have lobbying against automobile safety features and
emissions limits, they wouldn't be in this fix. And, more important,
neither would their workers.
Last week, the Republican-controlled Senate again
declined to raise the federal minimum wage from its current $5.15 per
hour. This wage has been at a dead standstill since 1997, yet since then
Congress has given itself six pay raises totaling $28,500. Since then in
the private sector, top executive salary and bonuses (not including
stock options and other in-kind compensation) have increased by more
than 70 percent, according to the Economic Research Institute. But we
can't afford to raise the floor for those scraping by.
America's future cannot be a bright one if the best ideas
that our industries have for bringing us into global competitiveness is
to drive their middle-class work force into penury. We are not too
generous to workers. We are too generous to the people who employ them.
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Robyn Blumner writes for the St. Petersburg Times. blumner@sptimes.com
Robyn Blumner writes for the St. Petersburg Times. blumner@sptimes.com