Monday, December 1, 2008

21st century union busting

John Cole draws the obvious conclusion from several weeks worth of GOP opposition to a Detroit bailout - it's simple union busting. Jonathan Tasini sums it up nicely,

Here is the irony and the obscenity being played out every day: managers at AIG get cash bonuses even though we, the taxpayers, have to bail them out of the mess they created and Robert Rubin continues to inhabit the circles of power even though, on his watch, Citibank came close to collapse and required a massive government bailout...and, yet, Rubin piled up tens of millions of dollars in compensation and no one is asking him to take concessions or give back his loot.

But, the auto worker--the person who came to work dutifully every day and worked in a factory that none of the AIG managers or Robert Rubin would dare spend a day in--is the person who has to take the personal hit and try to make ends meet because the auto execs screwed up.

This is a fucking crime.

Unions have a public relations issue, many people believe many bad things about the way that labor operates and many more people have fundamental misunderstandings about the way unions operate, way labor laws work etc. All of that said as unions have declined over the last 30 years so has the size and wealth of the middle class. The fact that the middle class has seen stagnant wages, rising debt, increased insecurity in health insurance and decreased job security at the same time that the unionization rates have decreased is not a coincidence. Correlation is not causation but a declining organized work force has real consequences.

You may not think that you like unions or need unions but organization of some kind is the only way that individuals can exert any influence - be it in politics or in the economy. Think of it this way, when you buy health insurance do you get a better deal buying a plan as an individual or as part of a group?

Individuals standing alone have little power to protect themselves or effect change in society. Organization is the only method by which the middle-class can exert pressure on our political and economic systems. It's time for the middle-class to wake up and start applying that pressure. The rich are taking care of themselves, who's taking care of you?


Jonny said...

It's not about union busting- it's where Cole misses the point as to the issue. It's about not rescuing companies that are dying on the vine who have reasonable substitutes. The demand for automobiles is a relatively stable one on an annual basis, thus, whatever isn't produced by one of these three will be produced by other manufacturers and ultimately create jobs elsewhere.

The reason we absolutely had to bail out AIG and the large banks is that there simply isn't really anyone left to take on the role of issuing debt for the purpose of leverage to companies. If this doesn't exist, the economy comes to a grinding halt, and not just the US economy, but a lot of the world economy.

I feel bad for the workers who will lose jobs- I really do, but this has little to do with their unions and more to do with companies who just couldn't manage strategy or people. Though, frankly, if you can manage people correctly there should be no need for unions. But that's another topic.

Steve Balboni said...

So we can't bail out the auto industry because their management failed but we must bail out the financial industry because... well.. because their management failed!

1 million (or more) innocent bystanders out of work, the collapse of consumer demand in the industrial midwest and the destruction of our America's industrial base - that's what we can expect. $25 billion to prop up the real economy is a pittance compared to the trillions we're outlaying for the financial industry.

Our economy is in a precarious state and we're not in a position to pick and choose which piece of the Jenga puzzle we can afford to yank out. Yes, the financial sector is critical but so are actual middle class jobs.

As far as what it has to do with unions to the right-wing it has everything to do with unions. They don't attempt to hide their contempt for the UAW and at every turn they lie and distort the actual record in attempts to crush the UAW. If it's not about union busting on some level then why the lies about UAW wages? Why ignore all of the concessions the UAW has made in wages in the last 2 years? Why pretend that the legacy costs have not been shifted from the companies to the union?

Jonny said...

First off, you know me- I'm not particularly a fan of unions, though I recognize in certain circumstances they have their place. That said, I think you missed my overall point- if the largest reinsurer in the world fails (AIG) then you see a collapse of the world financial system of which there is nothing to take its place. You can make the same case for some of the other financial institutions for the realms in which they play.

If the american auto makers fail, it's not like there's no other autos anywhere. There are plenty of other automobiles to buy- Honda, Toyota, etc. It's about not prolonging the pain for when these guys will come back in a few more years to borrow more money because of their inept ability to compete.

The reason we lay out more for the financial world isn't because they are necessarily friends of the legislators (though I will concede that sometimes that has something to do with it, but it's not the overarching effect). It's because lending a billion to the financial industry ends up having significantly more impact than just a billion dollars due to the money multiplier effect. Additionally, there is some likelihood of repayment by the financial services industry, whereas there's little to no likelihood of repayment by the auto industry.

$25b isn't much compared to the financial industry loans, though it also has very little long term impact.