Screw the Newbies: AP's Lament on Plight of New UAW Hires Ignores the Union's, Obama Admin's Roles in Creating It

June 19th, 2010 12:06 AM
uaw2There several annoying aspects of today's Associated Press report on the plight of newly-hired employees at U.S. auto plants represented by the United Auto Workers.

Mentioned by writers Dee-Ann Durbin and Tom Krisher, but not until their eleventh paragraph, is the fact that new workers, whose starting wage (mentioned in Paragraph 2) is "about half what veterans make under their current contract," have to "pay the same union dues as those who have been at the plant for years." But the AP pair didn't tell readers how much those dues payments are, and how harshly they affect entry-level workers. The web site estimates that it's in the neighborhood of $700 at Ford and Chrysler, and as much as $950 at Government/General Motors. When you're making $14 an hour, that's not chump change; it's about 34-46 cents per hour, or about 2.5% - 3.3% of base pay. A union official (not directly quoted) deadpans that "he understands their resentment." Sure.

As bad as that easily rectifiable AP oversight is, it's not the worst reporting error Durbin and Krisher committed. The following excerpted sentence is, in several ways:

Last year, as GM and Chrysler tumbled into bankruptcy, workers agreed to concessions, including the lower starting wage and suspension of cost-of-living raises that could amount to thousands of dollars over the life of a contract.

The AP pair gives readers the impression that the "concessions" were some kind of major giveback by UAW President Ron Gettelfinger and his merry band of negotiators. The truth is that the "concessions" really amounted to next to nothing for current workers. The UAW itself even said so in communications with its members.

The most obvious point to make about the "concessions" is that there has been virtually zero official inflation since they took effect. But it goes beyond that, as I noted in a related post (at NewsBusters; at BizzyBlog) in October of last year.

In that post, I included a graphic of the first page of a “contract outline” presented by the union to its members shortly before the changes therein were ratified in May 2009, which is reproduced here (red box added by me):


The key sentences inside the red box are the following (bolds are mine):

For our active members, these tentative changes mean no loss in your base hourly pay, no reduction in your health care, and no reduction in pensions.

.... Unfortunately, in this process our retirees are required to make difficult sacrifices as is explained later in the summary.

As I noted last year: "In other words, the UAW protected its currently working members, the ones who get to vote on contracts, from any meaningful sacrifice, while hosing its retirees, who don't get to vote."

These virtual non-concessions for current workers were only possible because the Obama administration and its car-czar managers hijacked the bankruptcy processes at GM and Chrysler, shafted creditors' contractual and common-law rights (certain secured creditors at Chrysler; unsecured bondholders at GM), poured tens of billions of dollars of taxpayer money into the emerging entities, and kept the existing union contracts essentially intact. In a normal bankruptcy, the union contracts at a minimum would have become fair game for meaningful negotiation, and at worst could have declared null and void.

Durbin's and Krisher's description of "lower starting wage" for new employees as a "concession" is also seriously inaccurate in two ways.

First, those at the negotiating table and the UAW members they represented at the time conceded nothing. They pushed the lower wage onto future union members (with, as noted earlier, no reduction in their fixed cost of union membership).

Beyond that, the $14 an hour is not something new employees will endure for a few years while their pay is gradually stepped up to full scale over a 3- to 5-year period, as has been the case in several previous "two-tiered" contracts. The "lower starting wage" is for all practical purposes a "permanently lower wage." This section of the AP pair's report proves that point:

Bobbi Marsh, 32, was hired at a GM plant in Lordstown, Ohio, two years ago, making $14 per hour. With raises she now makes $16, but that's still less than half the wage of her father, a machinist at the Lordstown plant.

Her father's job helped pay for her college and family vacations. She is afraid she will not be able to provide the same for her 10-year-old son.

"I feel bad for my child because I want him to have the same opportunities I had when he was my age," she said.

In other words, Ms. Marsh is acknowledging what Durbin and Krisher won't directly admit -- that her wage is not wired into the contract to catch up to a level anywhere near that of her father's.

Thus, new UAW hires are shouldering the burden of the union's decades-old unstated rules:

  1. Concede nothing for workers who get into the club early enough.
  2. To adhere to Rule Number 1, first shortchange new members with two-tiered wages, whereby they can still get into the club in 3-5 years.
  3. To adhere to Rule Number 1, next shortchange retirees (who can't vote on contract changes).
  4. To adhere to Rule Number 1, after Rules 2 and 3 have been exploited as much as possible, give new members the permanent shaft.

These rules, which in essence amount to a current member protection racket, explain the wholly justified resentment cited earlier. According to this link, starting wages at Toyota in Georgetown, Kentucky are $18-$25 an hour. The UAW rules just outlined are why GM, Ford, and Chrysler newbies start making less, and will continue making less.

The current administration in Washington is ultimately responsible for making the political decision to preserve the UAW's current member protection racket. Hades will probably freeze over before we'll see the Associated Press or any other establishment media outlet acknowledge that harsh truth.

Cross-posted at