- Jun 6, 2007
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On the UAW Union labor disputes with the Big Three U.S. Automakers both sides seem to be very unreasonable and not on a path that is good for the country. The UAW asking for a forty percent wage hike is totally out of line it was only 2009 when the American people were facing realistically all three of these automakers going out of business and the loss of this vital industry for the nation and the future for this industry holds many storm clouds Washington Is Forcing EV vehicles on the industry and it is unclear whether they will be affordable and meet the needs of the American people so the UAW needs to enable the automakers to be competitive so they can survive and prosper long term. On the other hand the automakers have to be considerate of their workers, inflation since the pandemic has really walloped ordinary Americans whether it be food or housing costs the automakers make a very good profit they should see their workers have a good middle class life!
To this end the automakers have offered a twenty percent wage increase over a four and a half year contract what is fair based on current wages and the bite of inflation and what the prosperous automakers should be doing for their workers is to give their workers an immediate twenty to fifteen percent raise and over the course of the four year contract give them a yearly COLA based on the consumer price index (for it is not clear inflation is under control at least through 2024 and 2025). Further the contract should front load the wage levels at two to three year intervals to help the workers have a higher standard of living earlier. The following is based on media reports what I mean here by front load is that currently a UAW full-time worker starts out at $18.00/hour and over the course of eight years rises to $32.00/hour and it seems every year they get a bump I don't know the exact contract terms but let us say it is in equal amounts $1.75/hour increase every year. So theoretically and generally speaking if you paid the worker $$20.86/hr for the first three years and at the end of the third year raise it to $23.00/hour and at the end of the fifth year raise it to $26.75/hr and then at the end of the eighth raise it to $32/hr the company would not lose anything because it would equal the current arrangement. Now if the companies would be fair and raise all the current wage rates twenty percent and the final eighth year rate fifteen percent the pay level would be $25.00/hour to start and at the end of the third year it would be raised to $27.60/hr and at the end of the fifth year it would be raised to $32.10/hour and the final eighth year rate would be $36.80/hour which would be fair. The union calls this system a tier system but it really is a pay level system and the UAW condemns it as unfair because it argues that is treats people as second class persons because it results in workers doing the same work but getting paid different wages but that is not a fair and good analysis people should be compensated for their tenure at the business all the time, effort and their life they expended doing the work of the business that all this is compensating workers based on how much of their time and their life they have given to the business!
The UAW has made a lot of complaints about the automakers part time workers it is a bogus and not persuasive complaint. First off and most importantly union part-time workers become full-time after two years at GM and Ford, the UAW should require Stellantis to agree to such terms. Part-time workers give the automakers valuable ability to control their costs that should not be taken away from them. However, the prosperous automakers should pay them a decent livable wage currently they start at $16.00/hour they should be bumped up to $20.00/hour (what Stellantis has proposed) and at the end of their first year they should be bumped up to $21.25/hour and get the COLA raise every year over the length of the contract. The automakers calling these workers part-time workers is really a misnomer because they work full-time hours for the automaker, it is more accurate to call them non-permanent workers. Since they are working full-time for the employer after three months they should be able to participate fully in the automakers 401K plan and after six months of employment they should be able to participate fully in the automakers employer provided health insurance.
The UAW needs to drop this crazy idea of a four day, thirty-two hour work week, they operate in America and America has a long history where it is a prosperous country because it is a hard working and industrious country and its people are such UAW don't ruin the American character; the UAW is going to hurt America if it establishes such a precedent! It is a red herring and nonsense to say the threat of Artificial Intelligence mandates this, AI is a tool just like robotics it poses no significant threat in the near future to UAW jobs! The UAW needs to drop its demand of a defined pension plan the automakers cannot allow themselves to be saddled with such financial obligations of a pension program it will put them on a trajectory to bankruptcy no question. Along the same vein providing for workers in their retirement, this is the role of the 401K program and I don't know the details of the Big Three Automakers 401K plan but if it is like what is common in America's economy it is deeply flawed and the UAW should negotiate a fix until the Congress and the President do their job in this area and enact legislation which mandates this fix which I have advocated for many years. The common 401K program provides that the employer will match the portion of the wages the employee diverts from his or her wages into this investment account. for retirement up to a certain percentage of the employees overall wages, I think the current match of the automakers is 6.4 percent of the workers wages. The problem with the typical 401K program is that many employees cannot afford to put part of their wages in their 401K account so they miss out on the company match they miss out on this retirement money from their employer coming to them and since most employers don't have defined pension plans these workers when they reach retirement age have little retirement money and as America is seeing are facing real hardship and even homelessness. What the UAW should negotiate and Washington should mandate through legislation is that the employer (the automaker) must put eighty percent of the maximum it will match on the employee's contribution regardless of whether the employee puts any of the employee's wages into the 401k account not requiring one-hundred percent so as to leave some incentive for the employee to make a contribution. Finally on this issue the UAW would be prudent to negotiate that a significant portion like twenty-five percent of bonus and profit sharing checks workers get from the automaker get diverted into workers 401k program because money in this program grows tax free it is a very valuable way to build a retirement safety net.
The UAW needs to keep in mind Washington is forcing the U.S. auto industry on this big gamble to EVs the financial ramifications to U.S. automakers is a big unknown the conversion is going to a huge amount of money and it cannot be known whether there will be a good or profitable return on the investment. The automakers need to have the flexibility to cut things if they need to to survive. I don't think it is fair to preserve a right to strike if an automaker is closing down a plant unless the automakers is shipping that work to a right to work or non-unionized plant or outside the country. The UAW union especially their leadership should remember that the White House and the Democrat Party leadership is cheering you and they fully support you and will largely continue no matter what but ordinary Americans could turn on you if you act unreasonable and unfair ordinary Americans have a mixed feeling about Unions, school unions during the pandemic shut down schools way longer than they needed to resulting in significant harm to children that has left a lot of bad blood toward unions. The UAW is holding some good cards here and can win a good pot but don't get greedy because you could end up largely blowing it!
To this end the automakers have offered a twenty percent wage increase over a four and a half year contract what is fair based on current wages and the bite of inflation and what the prosperous automakers should be doing for their workers is to give their workers an immediate twenty to fifteen percent raise and over the course of the four year contract give them a yearly COLA based on the consumer price index (for it is not clear inflation is under control at least through 2024 and 2025). Further the contract should front load the wage levels at two to three year intervals to help the workers have a higher standard of living earlier. The following is based on media reports what I mean here by front load is that currently a UAW full-time worker starts out at $18.00/hour and over the course of eight years rises to $32.00/hour and it seems every year they get a bump I don't know the exact contract terms but let us say it is in equal amounts $1.75/hour increase every year. So theoretically and generally speaking if you paid the worker $$20.86/hr for the first three years and at the end of the third year raise it to $23.00/hour and at the end of the fifth year raise it to $26.75/hr and then at the end of the eighth raise it to $32/hr the company would not lose anything because it would equal the current arrangement. Now if the companies would be fair and raise all the current wage rates twenty percent and the final eighth year rate fifteen percent the pay level would be $25.00/hour to start and at the end of the third year it would be raised to $27.60/hr and at the end of the fifth year it would be raised to $32.10/hour and the final eighth year rate would be $36.80/hour which would be fair. The union calls this system a tier system but it really is a pay level system and the UAW condemns it as unfair because it argues that is treats people as second class persons because it results in workers doing the same work but getting paid different wages but that is not a fair and good analysis people should be compensated for their tenure at the business all the time, effort and their life they expended doing the work of the business that all this is compensating workers based on how much of their time and their life they have given to the business!
The UAW has made a lot of complaints about the automakers part time workers it is a bogus and not persuasive complaint. First off and most importantly union part-time workers become full-time after two years at GM and Ford, the UAW should require Stellantis to agree to such terms. Part-time workers give the automakers valuable ability to control their costs that should not be taken away from them. However, the prosperous automakers should pay them a decent livable wage currently they start at $16.00/hour they should be bumped up to $20.00/hour (what Stellantis has proposed) and at the end of their first year they should be bumped up to $21.25/hour and get the COLA raise every year over the length of the contract. The automakers calling these workers part-time workers is really a misnomer because they work full-time hours for the automaker, it is more accurate to call them non-permanent workers. Since they are working full-time for the employer after three months they should be able to participate fully in the automakers 401K plan and after six months of employment they should be able to participate fully in the automakers employer provided health insurance.
The UAW needs to drop this crazy idea of a four day, thirty-two hour work week, they operate in America and America has a long history where it is a prosperous country because it is a hard working and industrious country and its people are such UAW don't ruin the American character; the UAW is going to hurt America if it establishes such a precedent! It is a red herring and nonsense to say the threat of Artificial Intelligence mandates this, AI is a tool just like robotics it poses no significant threat in the near future to UAW jobs! The UAW needs to drop its demand of a defined pension plan the automakers cannot allow themselves to be saddled with such financial obligations of a pension program it will put them on a trajectory to bankruptcy no question. Along the same vein providing for workers in their retirement, this is the role of the 401K program and I don't know the details of the Big Three Automakers 401K plan but if it is like what is common in America's economy it is deeply flawed and the UAW should negotiate a fix until the Congress and the President do their job in this area and enact legislation which mandates this fix which I have advocated for many years. The common 401K program provides that the employer will match the portion of the wages the employee diverts from his or her wages into this investment account. for retirement up to a certain percentage of the employees overall wages, I think the current match of the automakers is 6.4 percent of the workers wages. The problem with the typical 401K program is that many employees cannot afford to put part of their wages in their 401K account so they miss out on the company match they miss out on this retirement money from their employer coming to them and since most employers don't have defined pension plans these workers when they reach retirement age have little retirement money and as America is seeing are facing real hardship and even homelessness. What the UAW should negotiate and Washington should mandate through legislation is that the employer (the automaker) must put eighty percent of the maximum it will match on the employee's contribution regardless of whether the employee puts any of the employee's wages into the 401k account not requiring one-hundred percent so as to leave some incentive for the employee to make a contribution. Finally on this issue the UAW would be prudent to negotiate that a significant portion like twenty-five percent of bonus and profit sharing checks workers get from the automaker get diverted into workers 401k program because money in this program grows tax free it is a very valuable way to build a retirement safety net.
The UAW needs to keep in mind Washington is forcing the U.S. auto industry on this big gamble to EVs the financial ramifications to U.S. automakers is a big unknown the conversion is going to a huge amount of money and it cannot be known whether there will be a good or profitable return on the investment. The automakers need to have the flexibility to cut things if they need to to survive. I don't think it is fair to preserve a right to strike if an automaker is closing down a plant unless the automakers is shipping that work to a right to work or non-unionized plant or outside the country. The UAW union especially their leadership should remember that the White House and the Democrat Party leadership is cheering you and they fully support you and will largely continue no matter what but ordinary Americans could turn on you if you act unreasonable and unfair ordinary Americans have a mixed feeling about Unions, school unions during the pandemic shut down schools way longer than they needed to resulting in significant harm to children that has left a lot of bad blood toward unions. The UAW is holding some good cards here and can win a good pot but don't get greedy because you could end up largely blowing it!
