Tuesday, October 18, 2005

Decent Wages And Benefits For Workers Essential In Free Enterprise System

Normally, I'm not an admirer of New York Times columnist Paul Krugman, who loses no chance to rail away at President Bush, the War on Terror and sundry other matters from a weakly-liberal point of view. As the NYT public editor has observed, he is not always accurate or truthful.

But Monday, Oct. 17, Krugman had a column which should not be ignored. He pointed out that the bankruptcy at Delphi, formerly the parts division at General Motors, could provide the impetus or an excuse for a new round in wage and benefits cutbacks at General Motors itself. GM just obtained concessions on medical care benefits from the auto worker's union, the UAW.

The lead story in the L.A. Times today, by David Streitfeld, also summarizes these trends and is thoroughly alarming.

What is happening in the airlines, in too many of the big manufacturing industries, everywhere we look these days is that American business, pleading foreign competition and rising costs, is forcing the unions to abandon hard-won labor contracts and accept what amounts to a lower standard of living.

If this continues, one of the essential foundations of the American system, namely the ability of the workers to buy the products they produce, is going to be eroded.

It was Henry Ford, who, with the $5 dollar day, began paying his workers enough for them to be able to afford to buy Model T's. This brought about a revolution in living standards and made most Americans prosperous.

Now, that is all being eroded. And at the same time, the big companies are paying their executives more and more and entering into outrageously high severance agreements, such as Mark Willes got after he allowed Times-Mirror to collapse.

Krugman wrote yesterday, "There was a time when the American economy offered lots of good jobs -- jobs that didn't make workers rich but did give them middle class incomes. The best of these good jobs were at America's great manufacturing companies, especially in the auto industry.

"But it has been a generation since most American workers could count on sharing in the nation's economic growth. America is a much richer country than it was 30 years ago, but since the early 1970s the hourly wage of the typical worker has hardly kept up with inflation...

"Now the last vestiges of the era of plentiful good jobs are rapidly disappearing. Almost everywhere you look, corporations are squeezing wages and benefits, saying that they have no choice in the face of global competition. And with the Delphi bankruptcy, the big squeeze has reached the auto industry itself."

It's a good argument. Krugman concludes, "America's working class has been eroding for a generation, and it may be about to wash away completely. Something must be done."

One thing to be done is to return the Democrats to control of Congress next year. Ineffective and confused as the party often is, Democrats will still do a better job of protecting American workers than the Republicans.

And, of course, in the special election here in California, the electorate should reject the Schwarzenegger trick, backed by the foolish editorial page of the L.A. Times, to disarm the public employee unions.

The time may come for a general strike of a day or two by working people in this country. That would send a powerful message.

Many of the current bad trends stem from evil globalization. This is having the effect of leading many working Americans back to being peasants.

Yes, we have to defend ourselves in the War on Terror. But in doing that, the Bush Administration often seems willing to throw out the baby with the bathwater, and let American workers lose the resources they have had since Henry Ford and Franklin D. Roosevelt.


Anonymous Anonymous said...

Ken –

Do you know what a “benefit” is, as it relates to employment? It is an enticement to attract the better qualified individuals and induce them to join your firm, rather than your competitor across the street.

Pension plans, profit sharing, and yes, health care, are all examples of benefits which Leftists, and other misguided souls have confused with rights.

Now having been in the position of trying to recruit qualified technical people, I can tell you that these supposed “rights” are all but guaranteed, since the demand greatly exceeds the supply and it would be impossible to snag someone even remotely qualified without offering all the expected benefits.

If, on the hand, you want someone to screw on door panels, you can offer considerably less than the average GM/Delphi rate of $65/hr (wages + benefits) and find an ample supply of employees, even in this country.

But I find your recitation of this statement particularly naïve:

“It was Henry Ford, who, with the $5 dollar day, began paying his workers enough for them to be able to afford to buy Model T's.”

Ford was not giving them money to spend somewhere else (i.e., health care). Explicitly implied in this statement was that he wanted his money reinvested in the company. If you think Henry Ford was a noble do-gooder, I suggest you read up on the man.

Ken – this is a second chance to find out about free enterprise system. In spite of being cloistered in the Times building for 39 years, you’ve made a first step by publishing this blog and allowing feedback. I encourage you to take many more bites of the apple…


10/18/2005 2:03 PM  
Blogger Matt Weinstock said...

There are two sides to this story. The union leaders and GM execs combined to make this mess. They still don't have a desirable car as far as I can see. Both sides give lip service to the consumer (who ultimately write the checks), but the design quality, reliability, and value are not up to Japanese standards. Maybe the only solution is importing more illegal aliens and getting the wage down to $6. an hours. Unions and employers both seem to want more illegals here.

Oops - sarcasm.


10/19/2005 4:28 PM  

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