FAIR USE NOTICE

FAIR USE NOTICE

A BEAR MARKET ECONOMICS BLOG


This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. we believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law.

In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

FAIR USE NOTICE FAIR USE NOTICE: This page may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This website distributes this material without profit to those who have expressed a prior interest in receiving the included information for scientific, research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107.

Read more at: http://www.etupdates.com/fair-use-notice/#.UpzWQRL3l5M | ET. Updates
FAIR USE NOTICE FAIR USE NOTICE: This page may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This website distributes this material without profit to those who have expressed a prior interest in receiving the included information for scientific, research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107.

Read more at: http://www.etupdates.com/fair-use-notice/#.UpzWQRL3l5M | ET. Updates

All Blogs licensed under Creative Commons Attribution 3.0

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 Unported License.

Tuesday, May 28, 2013

Seven Reasons Why the Labor Movement Has Stalled


Dissident Voice: a radical newsletter in the struggle for peace and social justice


Seven Reasons Why the Labor Movement Has Stalled

A self-described “McGovern Democrat” whom I shall call “Fay” told me that, alas, she could no longer support organized labor because, in her own, stunning words, “unions have become too powerful.” A UCLA honors grad and longtime political activist, Fay is probably the most “left-wing” person I’ve ever personally known.

She dropped this bombshell on me despite the undeniable fact that (1) labor is clearly outmanned and outgunned, (2) private sector membership is less than 7-percent, (3) the middle-class, which was “invented” by organized labor, is shrinking faster than the glaciers, and (4) without institutional resistance, businesses will run wild on us. My initial thought? If we lose the support of smart people like Fay, we’re sunk.

There’s no denying the labor movement has stalled. While there still seems to be strong and genuine “pro-worker” sentiment throughout the country, there’s precious little codified social/political activism to go along with it. In a recent edition of CounterPunch, Jeffrey St. Clair provocatively questions the very existence of a “leftist movement.”

St. Clair notes, “There is, of course, a Left ideology, a Left of the mind, a Left of theory and critique. But is there a Left movement?” It’s a fair question. Clearly, anything resembling a Left movement has, historically, included an active and energetic show of support for organized labor. And just as clearly, that show of support is disturbingly absent.

Listed in no particular order are seven factors that have contributed to the decline of the American labor movement.

1. Federal and state laws co-opted much of what organized labor used to provide. People think unions are anachronistic because the government now handles the welfare of working people. Although it’s true that many job-related rules have been enacted into law, if the government were indeed looking after the welfare of working people, the rich wouldn’t be getting richer and the middle-class wouldn’t continue to erode.

2. Democrats have abandoned organized labor. Unions continue to donate money, but Democrats continue to disappoint them. When labor complains, Democrats tell them to shut up and be patient. When labor threatens to seek help elsewhere, Democrats laugh in their faces and say, “Who are you going to ask? The Republicans?”

3. Manufacturing jobs have been sent abroad. Because big-time manufacturing was once the gold-standard of organized labor, when those jobs left (not to avoid paying union wages, but to avoid paying American wages), the heart and soul of industrial unionism left with them.

4. The propaganda is working. Astonishingly, labor’s enemies have been able to convince people that unions are corrupt and sinister. It gives us no pleasure to admit this, but had it been revealed that the IRS was unfairly focusing on labor unions (instead of conservative groups), the public likely would not only have accepted it, they would’ve rejoiced in it.

5. American individuality is resistant to collectivism. We Americans are a remarkably self-sufficient and independent-minded people. That trait is both our strength and weakness. The 19th and early 20th century U.S. labor movement—the social/economic phenomenon that defined us a nation—was largely led by European immigrants whose cultures embraced collectivism and proletarian rights. Those days are over. An every-man-for-himself philosophy now permeates the workplace.

6. Union leaders are lazy and unimaginative. Too many of these union honchos seem to care more about covering their butts and finishing out their careers than going head-to-head with management and reinvigorating the membership. Instead of the firebrands of old, they’ve become bureaucrats and glorified clerks.

7. People don’t want to be identified as “working class”. It’s hard to launch a political movement led by working people when there’s only a few self-avowed members of the working class willing to step up to the plate. Understandably, given what occurred in post-Reagan America, maintaining one’s pride as a working man or woman is difficult.

Instead, today’s working class Americans see themselves as budding entrepreneurs and future millionaires, temporarily forced to earn a living by other means. It’s just a matter of time before they hit it big. Not exactly the folks you’ll see marching in Labor Day solidarity parades.

David Macaray, a Los Angeles playwright and author (It’s Never Been Easy: Essays on Modern Labor), was a former union rep. He can be reached at: dmacaray@earthlink.net. Read other articles by David.

Thursday, May 2, 2013

Who Will Lead the U.S. Working Class?


 

Who Will Lead the U.S. Working Class?

 


Michael D. Yates(mikedjyates [at] msn.com) is associate editor of Monthly Review and editorial director of Monthly Review Press. He is the author of Why Unions Matter and Cheap Motels and a Hot Plate, and the editor of Wisconsin Uprising: Labor Fights Back, all published by Monthly Review Press.

This article is based upon an interrogation of two books: Gregg Shotwell, Autoworkers Under the Gun: A Shop-Floor View of the End of the American Dream (Chicago: Haymarket Books, 2012), 200 pages, $17.00, paperback; and Jane McAlevey with Bob Ostertag, Raising Expectations (And Raising Hell): My Decade Fighting For the Labor Movement (New York: Verso Books, 2012), 318 pages, $25.95, hardcover. Each book is about an iconic union. Gregg Shotwell writes about the United Auto Workers (UAW), and Jane McAlevey the Service Employees International Union (SEIU). What they report gives us reason for both deep concern and hope concerning the future of organized labor.
The U.S. labor movement is in disarray, with declining union density and fewer members each year. There have been positive signs of movement revival, such as the revolt of public sector workers in Wisconsin in 2011 and the Chicago school teachers’ strike in 2012. But overall, the future of the labor movement does not appear very bright. In what follows, we examine the state of organized labor through the lens of the recent history of two unions, as seen by a rank-and-file worker and an itinerant union organizer. We ask what kind of people might lead the U.S. working class.

The U.S. labor movement is in disarray, with declining union density and fewer members each year. There have been positive signs of movement revival, such as the revolt of public sector workers in Wisconsin in 2011 and the Chicago school teachers’ strike in 2012. But overall, the future of the labor movement does not appear very bright. In what follows, we examine the state of organized labor through the lens of the recent history of two unions, as seen by a rank-and-file worker and an itinerant union organizer. We ask what kind of people might lead the U.S. working class.

The United Auto Workers


Gregg Shotwell, now retired, was for more than thirty years a rank-and-file machine operator for General Motors and Delphi, one of the world’s largest auto parts manufacturers. Angry with the UAW’s increasingly cozy relationship with the companies, he started an in-plant broadside, Live Bait &Ammo, which he hoped would be bait for the bosses and ammo for the workers. His provocative and lively prose, combined with good fact-based analysis, struck a chord with his fellow unionists, and the newsletter gained a wide circulation in union auto plants. His book is an organized collection of Live Bait & Ammo essays, covering developments in the UAW and the automobile industry from the late 1990s until the Federal government’s bailout of General Motors and Chrysler in 2009. The wonderfully rendered essays are cries from the heart of workers degraded daily by their employers and betrayed by their union.
Some background on the UAW will put Shotwell’s dissidence in historical perspective. The UAW was forged in the courageously fought and radically led sit-down strikes of the Great Depression. Its members, their families, and their communities built upon these bitter struggles to make the UAW a militant industrial union. Not only did those who labored on the assembly lines and in the shops transform themselves from factory serfs to class-conscious workers, but they also took control of the shop floor from a management notorious for oppressive treatment of its “hands.”

Shotwell tells a story on the first page of his book that illustrates the power of the union:

I hired into GM and joined the UAW in 1979. I didn’t know much about how unions worked. I soon learned. At six thirty one morning, we were sitting around sipping coffee and trying to wake up to a new day of the same old shit. A foreman who was new to the area told us to get up and get to work. “Right now,” he said. “I’m the boss.” We said, “Yes sir, boss.” We went right to work. Thirty minutes later, every machine in the department was down. The skilled trades came out, tore the machines apart, and went off to look for the missing parts. They didn’t come back. There was no production that day. Every department behind us went down like a domino.

The next morning, the same foreman said, “Good morning, gentlemen.” Then he left us alone to do our jobs.

The shop floor was our turf. We controlled the means of production because we were the masters of the means. We didn’t plan this direct action. It was automatic. It was natural. We called it “showing the boss who’s boss.” That’s what old timers taught me about unionism.1

As his book makes clear, this does not happen today. The UAW has hit hard times. Membership has plummeted from a peak of 1.53 million in 1979 to 380,719 in 2011. Most commentators point to the decline of domestic manufacturing in the United States and the corresponding increase in the foreign operations of U.S. car companies, along with a ruthless anti-union strategy begun by employers when profit margins fell sharply in the mid–1970s, as the reasons for this. However, Shotwell provides many examples of how the failure of the UAW to organize the foreign “transplant” automobile manufacturers in the United States and the auto parts segment of the industry has also played a major role.

Much of Shotwell’s book shows why the UAW has not organized the nonunion sections of the industry, and worse, how it has become complicit with capital in making certain that these will not be organized. The union has, in effect, become the junior partner of the companies. As he says about former UAW president Ron Gettelfinger:

Gettelfinger is a corporatist: that is, he believes our fortunes as union members are tied to the company’s apron strings. At the Ford sub-council, where union members convened to devise a bargaining strategy, he invited Lord Ford and his stooges to explain how sacrifices would be necessary. Ford’s problems are not the fault of union members or union wages. Does Ford invite UAW members to Board of Directors meetings to advise them how they should make sacrifices for the good of the community?

The beginning of the UAW’s demise can be found in the employer backlash against the radicalization of much of the labor movement during the Great Depression and the tremendous strike wave after the Second World War. The latter, along with the onset of the Cold War, provided good public relations cover for the corporate counteroffensive, as a war-weary public wanted to buy the commodities they were not able to purchase during the war (and still could not because of the strikes) and also began to succumb to relentless Cold War propaganda against the Communists. The first big postwar victory of capital was the Taft-Hartley legislation, which, among other things, compelled union officers to sign an oath stating that they were not Communists.

Most union officials signed the oaths, and many leaders used refusals to sign as an excuse to purge radicals from their ranks. The UAW was home to a large number of reds, and they were among the best, most class- conscious members and leaders. Unfortunately, Walter Reuther, one of the leaders of the agitations that helped form the union in the 1930s, used Taft-Hartley to red-bait his left-wing opponents and win power.

Reuther and his successors parlayed the postwar prosperity of the industry into pacesetting wages and benefits for autoworkers. At the same time, they built a UAW political machine, the Administrative Caucus—Shotwell refers to it as the “Rollover Caucus”—which has been called accurately a “one-party state.” They worked out an “accord” with employers: the union promised to let the bosses manage free from the threat of wildcat strikes and work slowdowns. In return, the corporations agreed to regular wage increases, cost-of-living adjustments, and generous health-care and pension benefits. UAW leaders used the power of incumbency to contain any challenges to their control of the organization.

As democracy in the UAW waned and members chafed at the union’s concession of workplace control to management, rank-and-file movements arose. The union suppressed these efforts, but it was impossible to eliminate dissent altogether. One of Gregg Shotwell’s UAW mentors, the late Jerry Tucker (who wrote the Foreword to the book), engineered several “work-to-rule” campaigns at UAW plants in the Midwest. Patient education convinced workers to slow down production by sticking strictly to the letter of their collective bargaining agreement and their supervisors’ instructions. Workers refused to show the initiative that makes every workplace run smoothly and efficiently. Inevitably, production fell dramatically. As Shotwell notes, each of these “in-plant” work stoppages succeeded; all concessions that management wanted were denied, workers won better contracts, and none lost their jobs.

Tucker became so popular that he was elected a Regional Director. But when he brought his rank-and-file empowerment strategy to the national union leadership, they mounted a vicious campaign to unseat him (union staffers were forced to give part of their salaries to his opponent’s campaign). He lost his directorship, but then helped form the New Directions movement to wrest control of the union from a leadership now far removed from the shop floor. These efforts failed, but the New Directions spirit lived on. Shotwell and other union dissidents began Soldiers of Solidarity, to return the UAW to its members. Work-to-rule, national strikes, solidarity, an end to concessions, and union transparency are the weapons Soldiers of Solidarity argues are needed if automobile workers, and by extension all laborers, are to reverse the downward spiral in which the working class finds itself.

There are startling revelations of UAW autocracy and disdain for the rank-and-file in Autoworkers Under the Gun, which the author describes in vivid language but can be simply summarized here:

• Members cannot democratically influence what the union does. The union’s conventions are run dictatorially, and most of the delegates are appointed staff persons. The chair silences the microphone when dissidents make critical comments or ask embarrassing questions. “You’re done brother, shut off the mic,” UAW president Yokich said to Shotwell at a union convention when he had had enough of Shotwell’s trenchant analysis of the union’s self-imposed weakness.

Dissidents are spied upon, and the top officers routinely lie about what they have done in collective bargaining. Shotwell gives especially detailed examples for his employer, Delphi. Union leaders guaranteed Delphi workers that they would always have the same contract provisions as GM employees, that GM would still be the majority owner of Delphi after it was spun off by GM. Not only were Delphi workers soon earning a fraction of what those at GM earned, but they lost all their GM pension credits. Things only got worse when Delphi declared bankruptcy.

Autocracy in the UAW is so blatant that the Administrative Caucus voted to transfer tens of millions of dollars from the union’s seldom used strike fund to pay the salaries of the national staff. Interest on the strike fund is similarly diverted.

• The UAW sells its locals short. It does not inform them about national negotiations; complex issues are presented to members at the last minute, with dire warnings that failure to agree will lead to disaster. The union settles national agreements before local agreements have been completed, leaving the locals with little leverage over their employer.

A particularly egregious example Shotwell gives of the union’s betrayal of its locals concerns Local 2036 in Henderson, Kentucky. The UAW sanctioned a strike against wheel supplier Accuride in 1998. When the workers rejected a company proposal but agreed to return to work, the corporation locked them out. A dance then began in which the union paid strike benefits, then stopped payments, threatened the local with trusteeship, and, in 2002, when at least 100 employees were still holding solid against Accuride, disavowed any interest in representing the workers. The disavowal letter was sent to the company but not to the long-suffering strikers. The union never organized solidarity actions by union members who were installing the scab wheels in Ford and GM assembly plants. The best it did was urge GM, Ford, and Chrysler to convince Accuride to settle. Shotwell contrasts the UAW’s (in)action with that of the Canadian Auto Workers (CAW), which seceded from the UAW in 1984: “When Navistar attempted to bust a Canadian Auto Workers (CAW) local, CAW president Buzz Hargrove said, ‘We are prepared to shut down all of our operations. We are not going to allow them to scab our plants and steal our members’ jobs.’ The CAW kept scabs out and won a fair contract.”

• As capital’s anti-union campaign accelerated in the 1980s, the UAW rejected a militant counterattack, as New Directions was demanding. Instead, they embraced class collaboration—more benignly called partnership, or “jointness.” The union and the corporations would work together to ensure the profitability of their joint enterprise. If workers labored hard to make their plants more profitable, employers would share some of the money with them. The union agreed that foreign competition, mainly from Japanese manufacturers, was the source of industry distress. To beat the foreigners, UAW members would have to work harder, smarter, and in cooperation with their employers. The tacit deal was that if the workers did not go along with this, the union would discipline them itself.

To sweeten the pot, the corporations agreed to pay several cents per hour of employee labor into jointness funds, set up as independent corporate entities and administered by union and management. These funds, which soon contained millions of dollars, are not subject to the financial disclosure obligations that unions have under the Landrum-Griffin Act, and the UAW has refused to show the members how the funds’ monies are used. Shotwell tells us that they, in part, pay the salaries of hundreds of union staff persons who work in the plants as the union counterparts in labor-management teams that deal with all manner of workplace issues.

With jointness and the jointness funds, the UAW committed itself fully to a class-collaboration strategy. Corporations have as their aim the accumulation of capital, made possible by the exploitation of wage labor. The latter is realized by management’s attainment of as much control as possible over the labor process, that is, of how work is performed. Labor-management cooperation means that the union is an ally of its class enemy, committed to helping it achieve its goals.
The first targets of the union-employer partnership were Japanese automakers, who were accused of unfair competition. The degree to which the company-union partners vilified the Japanese can be seen in an early program paid for by the funds, a week-long educational, with mandatory attendance by every union member. I witnessed this firsthand when I taught economics in a one-day session in such a program to groups of Pittsburgh autoworkers; the session held just prior to mine was an eight-hour orgy of Japanese bashing, with the most blatant stereotyping of Japanese culture and behavior.

Once the competitive ethos began to be instilled in union members, the focus shifted from foreign competition to that between domestic automobile companies. Workers at GM were now in competition with those at Ford and Chrysler, even though they were in the same union. From there, it was a short step to pitting employees at one plant against those at another of the same company. So as the corporations began to close plants to remain competitive, workers were forced into a competitive mode, doing whatever they could to keep their particular plant open. Solidarity went out the window, replaced by a war of all against all.

Shotwell predicted what would happen:

Competition between workers will decimate, not solidify, our ranks. A Competitive Operating Agreement is a Trojan horse loaded with three lethal concessions:
  1. the expanded utilization of temps, which is in effect two-tier;
  2. the implementation of nonunion labor into the plants;
  3. the manipulation of union members as “team leaders” in supervisory roles.
He was right. The end result was a sequence of corporate demands and union concessions: lump-sum wage increases instead of percentage raises built into the base wage; two-tier wage agreements in which new hires earn much less than senior workers (now less than half as much); fewer benefits, with workers paying more and more for them; defined contribution pensions instead of defined benefit plans; pensioners sacrificed to ease the pension cost burdens of the businesses; and on and on, with no end in sight.

Union givebacks ultimately led to the decimation of the UAW during the Great Recession. GM and Chrysler declared bankruptcy, and the federal government demanded—and received—draconian concessions from the union in return for a bailout, in which the owners suffered nothing. And in a final blow to workers and the union, partnership and the resultant worker demoralization helped make possible the recent enactment of a right-to-work law in Michigan, the very cradle of industrial unionism.

Throughout all of this, the automobile manufacturers continued unilaterally to pursue their interests. While the union bashed the Japanese, the corporations partnered with Japanese companies. They took the profits they made from union concessions and invested them in foreign operations, which, the author informs readers, are now the major source of their profits, and where corporate assets are not subject to U.S. bankruptcy laws. They began to spin off their parts components, converting them into quasi-independent corporations that now supplied modular components to them (such as steering wheel assemblies and seats). These new entities either operated union-free or, with UAW cooperation, remained union but with much lower wages and benefits, and weaker work rules.

A union that collaborates with employers, must, by definition, be hostile to the rank and file. In any workplace, laborers face a relentless enemy. Management continually imposes new stresses on the workers, routinely violating the collective bargaining agreement. A cooperative union must then either negotiate ever-weaker contracts or ignore the grievances that workers file. As Shotwell documents in the latter case, when workers grieve they must confront the union-management teams in the plant, both parts paid for by the employer, who have a stake in shunting the grievance aside or settling it jointly in a corporation-friendly manner, regardless of the needs of the aggrieved employees. When this fails and grievances accumulate, the national union simply concedes them in the national bargaining. When workers protest, the one-party state votes them down.

What then should workers do? How do you wage a struggle against both your employer and your union? Shotwell is a proponent of “work to rule,” which he correctly sees as a potent form of sabotage that both pressures employers to settle disputes with workers and helps workers stop and reverse the erosion of their control over the labor process. But to put this into practice will require much patient organizing both inside and outside the workplace. It will be a difficult process, but really there is no other choice, except complete capitulation. As he poetically puts it:

Strike back.
Strike back because your brothers and sisters are laid off.
Strike back because you hate the bastards.
Strike back to redeem your dignity.
Strike back for full employment.
Strike back to abolish inequality.
Strike back because your job is a bore and your boss is an ass.
Strike back for freedom.
Strike back to restore the balance of power.
Strike back because you are human and care about life.
Strike back to break the corporate chokehold.
Strike back to get the leeches off our backs.
Strike back for more democracy.
Strike back because they never listen to you.
Strike back to control the means of production.
Strike back because Medicare doesn’t cover prescriptions for your mother.
Strike back because politicians retire in splendor.
Strike back because injunctions are only against unions and never against management.
Strike back because judges are the lackeys of industry.
Strike back because no one believes in the system.
Strike back to show we can strike back.
Strike back.

The Service Employees International Union


Unlike Shotwell, Jane McAlevey was never a rank-and-file worker. She was appointed to various union staff positions after working in a number of social-change organizations. Most of her book describes her tenure as executive director of a large local of public and private sector workers in Las Vegas. She tells readers that Raising Expectations is about organizing; it is, but it is also a memoir centering on herself and her wars with the SEIU’s top leadership. Nonetheless, she has much of interest to say about both how successfully to help workers organize unions and negotiate good collective bargaining agreements and why most unions do neither.

Just as with Shotwell’s book, McAlevey’s account of her time with SEIU should be put into historical perspective. Founded in 1921, the Building Service Employees International Union (BSEIU) initially organized janitors, elevator operators, window washers, and doormen. It eventually began to organize other types of workers and to merge with other unions. In 1968, it became the SEIU, and since then it has continued to grow and to merge, most notably with a majority of the locals of the left-led hospital workers’ union, 1199. Today the SEIU is one of the largest labor organizations in the country, with about 1.8 million members. It is a major union in health care—where McAlevey did most of her SEIU work—with nurses, hospital staff persons, nursing home employees, and home health-care workers among its members.

The two persons most associated with SEIU’s rapid growth are John Sweeney and Andrew Stern. Sweeney led the large New York City local of SEIU, the often-corrupt Local 32BJ, and moved from there to the presidency of the national union, where he helped engineer the famous Justice for Janitors organizing drives. Not long after Sweeney became president of the AFL-CIO in 1995, Stern was elected SEIU’s president.

Stern believed that only by raising union density, through organizing in a particular market, could a union gain enough power to improve the lives of its members and achieve enough political leverage to gain further improvements, for its members and the entire working class. However, Stern’s other ideas undermined this model’s logic. Like most top union leaders, he was a proponent of labor-management partnership and an enemy of the strike. He said that strikes and class struggle were remnants of a bygone era; the modern union had to offer employers “added value,” that is, a bigger bottom line. As we saw with the UAW, such a philosophy ultimately weakens the union and stifles democracy.
As in the UAW, the SEIU’s partnership strategy faced internal resistance. And like the UAW, the SEIU is a one-party state, intolerant of internal rebellion. Stern demoted or fired those who opposed him and trusteed (took over) dissident locals. When one of the largest, most militant, and successful locals, California’s United Healthcare Workers (UHW), led by Sal Rosselli, was trusteed in January 2009, SEIU’s UAW-like class-collaboration trajectory reached its logical conclusion. Rosselli was an Executive Board member; a great organizer; had work experience as a SEIU member; had helped workers win pacesetting wages, benefits, and working conditions; and was a strong advocate for patients in the hospitals his local had organized. However, in 2007–2008, he began to question SEIU’s partnership approach and to argue in favor of greater membership control over the national union through direct rank-and-file election of its top officers and board members, rather than the convention selection method used by SEIU that was more easily controlled by Stern. This won him Stern’s enmity. Rosselli then defied Stern further by bringing a platform of reforms and constitutional changes to the union’s convention in Puerto Rico in 2008. He ran as an independent for election to the Executive Board, but was defeated by the Stern slate. A few months later, Stern trusteed his local. Rosselli and his allies left the SEIU and formed a rival health-care workers’ union, the National Union of Healthcare Workers (NUHW). This organization has achieved considerable success, but it has faced unrelenting hostility from SEIU, which has spent millions of dollars filing lawsuits against NUHW and individual members of it, and has actively colluded with employers to defeat NUHW in certification elections.

Jane McAlevey’s account of her labor union work begins during the exciting early days of John Sweeney’s New Voice team, which took charge of the AFL-CIO in 1995. The new officers were committed to organizing, and the author tells us that she was tapped to help lead an innovative project in Stamford, Connecticut, one that would build union power by concentrating on what she calls in her book, “whole worker organizing.” Unions would aim to organize the “whole worker,” that is, not just in the workplace but in all of the institutions and structures that constitute working-class life.

The major tool McAlevey used in Stamford, and in all of her organizing efforts, was Power Structure Analysis (PSA). She describes the PSA as follows: “You identify the real power players in a given community or area, determine what the basis of their power is, and find out who their natural allies and opponents are. Based on that knowledge, you formulate a plan for enhancing the power of your allies and neutralizing that of your opponents.”

The “quantitative phase” involved an “exhaustive study of demographics, voting trends, political donations and the like.” To this, she added “the qualitative phase,” an “equally exhausting pooling of the collective knowledge of our members.” The quantitative part of the PSA was conducted by professionals, hired by McAlevey, while the second was done by the members themselves.

Not only was the PSA important as a descriptive device, pinpointing who had power, but it also served as an educational tool. With it, McAlevey taught workers about power and showed them how to increase and use their own strength. In Stamford, the PSA-inspired mobilization of the members of the unions participating in the project succeeded in increasing union membership in the area, stopping the planned demolition of a large tract of public housing (where many union members lived), and winning millions of public dollars to improve that housing. And in nearly all of the places McAlevey worked in her ten years as an organizer, the PSA technique proved exceptionally useful: in identifying public housing as a key concern of workers in Stamford; in mobilizing support in Kansas City to stop the sale of a public hospital; in figuring out in several places which local politicians could be compelled to support her organizing efforts and which could be defeated in elections; and in how to pressure employers to meet bargaining demands.

Most of McAlevey’s organizing was done for the SEIU. She agreed to work for the SEIU because it had the money to make organizing possible, but she tells readers that the union was riven with “turf wars” waged by various powerful union chieftains, and that these hampered her efforts wherever she went.

McAlevey was an unusually talented organizer. So, even though she frequently ran afoul of union turf wars, she always managed to have powerful allies who sought out her skills. In 2004, she was appointed Executive Director of SEIU Local 1107 in Las Vegas. Her four years there were tumultuous. The local had 9,000 members—some were county public employees and others worked at private and public hospitals—but many of the workers under contract were not in the union. The local’s officers were not much concerned with organizing; finances were in disarray; contracts were expiring; some negotiations had stalled; prosperous private hospitals remained unorganized; and member morale was low.

McAlevey set about bringing 1107 to life and making it grow. She had considerable success. Her account of what she did, and why, makes for riveting reading and valuable “how to” lessons for organizers. It is what anthropologists call “thick description,” so detailed that the description itself becomes an analysis. How does an organizer identify the persons in each department of a workplace who are its natural leaders? How do you get them to lead the union, or in some cases, become union members? How do you meld the leaders into a coherent team? How do the leaders organize the workers? How do you prepare workers for inexorable employer antagonism? How do workers show the employer that they are not afraid? How does the union win allies politically and in the community who will help it defeat adversaries? How does an organizer negotiate the tensions that might exist between local and national union strategies? These and many other questions are effectively answered by the author as she tells readers what she and her allies did in “Sin City.” McAlevey’s ability to think and act creatively is graphically and humorously portrayed in her description of her first bargaining session with a large private hospital.
Breaking with typical bargaining protocol, which limits the union negotiating team to a few members, she had scores of nurses at the bargaining table, with individual nurses making the initial union proposal to the flabbergasted management team. Not only was the employer thrown off guard, but the workers felt a sense of empowerment that carried over to future sessions.
The Las Vegas chapters of the book are exceptional in terms of the nuts and bolts of organizing and bargaining. In them, she conveys a message of utmost importance to those who want to rebuild the labor movement. Workers can be organized. They are willing to join unions in large numbers, even when they face hostile labor laws, brutal employer opposition, and considerable personal risks.
McAlevey’s work in Las Vegas was short-circuited, according to her, by the endless turf wars in SEIU. She says,

I operated on the assumption that, if you just kept winning in a principled way, the work you were doing would create the conditions for its own continued existence. The people at the top might not like you…but if you consistently succeeded at the assignments they gave you, ultimately they would give you more assignments and the work would go forward. I was wrong…. Past a certain point, winning actually becomes a liability, because the people at the top will feel threatened by the power you’re accumulating unless they can control it; they cannot imagine that your ambition would not be to use that power in the same way they use theirs. It took ten years of banging my head on a wall to finally knock that into it.

The militant local she had built was, in her view, just too much for Stern, who was more interested in partnering with the employers against whom McAlevey was waging war. The pretext for her departure took place in 2007 when she faced charges by members of her local of illegally interfering with elections to the local’s Executive Board. She writes that she was unaware that she had violated any laws. She says that she was so burned out from the constant turf wars and several years of nonstop work that she was simply “off her game” and caught off guard. To keep the peace, she agreed to resign her post in June 2008, as did the local’s president, who had been her long-time adversary.

While Raising Expectations contains much of interest, it contains critical flaws: problems that are reflective of what is wrong with organized labor in the United States, and are associated with the intra-union power struggles and top-down governance criticized by the author.

For example, the author has a limited sense of history, of the truth that we all build on the efforts of those who came before us. Nothing that McAlevey did was new, but she often writes as if it was. She makes it appear that she invented Power Structure Analysis, at least its adaptation to labor organizing, when in fact such techniques have often been used by labor unions. Jerry Tucker did a sophisticated PSA in his 1978 defeat of a right-to-work initiative in Missouri, and in many other campaigns. Similarly with “whole worker organizing,” she ignores a long history of union efforts to integrate workplace and community organizing. Packinghouse workers in the 1930s spread their organizing from the meatpacking plants into the workers’ communities, leading the drive for the racial integration of local businesses. Unions have built hospitals and housing for their members. The UAW strongholds in Michigan and Ohio created entire “union towns,” in which victories in the factories translated into the creation of local working-class democracies. This history escapes McAlevey, who gives the impression that every situation in which she finds herself is a tabula rasa, to be filled by her innovative strategy and tactics, always in the face of ignorant and recalcitrant labor leaders.

McAlevey also often fails to see that building a labor movement is a collective effort. She makes much of her isolation in the right-to-work state of Nevada. However, Las Vegas is not an isolated town in the nonunion South. It is home to a strong labor movement, with a vital and large union of culinary workers, and considerable political muscle. Furthermore, California, with strong unions facing the same employers she did, was just across the border. Private-sector hospitals in California had been organized, with workers winning superior wages, benefits, working conditions, and patient protections. She would not have been able to win good contracts with the private hospital corporations in Las Vegas without the prior success of her California counterparts. Yet, she gives them no credit and seems to go out of her way to say that they did not help her at all, which, I have learned since reading her book, is not true.

Finally, a reasonable reader might question the depth of her commitment to rank-and-file workers. She frequently denigrated the local’s officers, but instead of doing a PSA of the local to find out how they could be won over to her vision, she illegally tried to overthrow them. She argues that a modern union needs a paid professional staff, presumably comprised of people like her, recruited from outside of the local union. But it seems not to have occurred to her that the rank-and-file members could be trained to be professionals, to do anything she could do, and with the advantage of having performed the work of the members they represented.

I was surprised to find out, again after reading the book, that despite all of her sharp and accurate criticisms of Stern and the SEIU leadership, she agreed to serve on the national union’s Executive Board in 2007; in fact, she was appointed by Stern. Then in 2008, she ran (and won), on Stern’s team, in Executive Board elections, after the SEIU had long since gone down the path of UAW-like partnership. How is it possible that you can be a champion of member empowerment and serve on the very executive body of a union that opposes it?

Conclusion


The trajectories of the UAW and the SEIU tell us something profoundly depressing about organized labor in the United States. Despite their radically different histories and recent growth rates, both unions embraced labor-management partnership with gusto, with the attendant autocratic leadership, member disempowerment, and limited gains from collective bargaining. How can this be? Consider something I once wrote:

organizations workers form to combat their oppression will find it difficult to avoid being influenced by the hegemony capitalism seeks to impose over society. It has been the rule rather than the exception that labor unions become bureaucratic and conservative, even if they were radical in the beginning. The labor movement in the United States, for example, was an active participant in the anti-worker Cold War, purging and persecuting its left-led unions and radical union leaders. Unions in the rich capitalist countries have actively supported the imperialism of their nation’s businesses and governments. Unions around the world have been sexist, racist, and homophobic, dividing workers just as surely as have the employers they fight against.2

Capitalism brings forth behaviors and modes of thought in its own image and likeness. We are forced to act in certain ways if we want to survive and prosper. But these cannot liberate us; they only help to recreate an oppressive system. Unions might raise wages, improve working conditions, and force governments to enact worker-friendly laws. These are good things, but they do not challenge the rule of capital. And if unions come to mirror their class enemy, they would not even be able to achieve these victories. If the UAW and the SEIU hold themselves up to a mirror today, the faces they see will be those of GM and Health Corporation of America.

And still, capital’s power is never absolute, and this is what gives us hope. The brutality of its rule always calls forth rebellion. Shotwell and McAlevey show us two kinds of rebellion. Shotwell’s is rooted in the daily misery of his fellow workers. He expresses what they feel and helps make them conscious of the sources of their subjugation. His essays reflect their desire for escape from the bosses’ control and to use democratically what is rightfully theirs—the union they and their forebears sweated to create. When automobile laborers look at Shotwell, they see themselves. When they read his words, they feel what he expresses. He is an organic intellectual, risen up from the ranks to give voice to his class.

Shotwell grasps that it is only through the power workers have in their workplaces that they can challenge capital. Work-to-rule is his preferred method of class struggle, but he is not averse to anything that might defeat the employers. Upon the intelligence and efforts of the Shotwells of the world, and with their leadership, a working-class movement worthy of the name might yet be made, one that both the employers and their union junior partners will fear.
McAlevey’s rebellion, however, centers too much on herself. Her actions were not rooted in the daily work experiences of those she helped organize and whom she represented at the bargaining table. This was not just because she did not have such work experiences. She simply does not have a working-class consciousness, a sense of herself as an interchangeable part of a collectivity. Her sensibility is essentially bourgeois—individualistic and narcissistic. Collective give-and-take, much less self-criticism, are not in her vocabulary. When workers see her, they do not see themselves, just her. In the end, capital and the union chieftains are not afraid of such people.

While these two books chronicle the specific experiences of two people in two unions, they contain the seeds of several general lessons for building a labor movement. First, unions as presently constituted are hostile to the attainment of class power. They are often nearly as much the enemy of workers as are employers. Second, people from outside of the working class can ally themselves with workers, but they cannot comprise the bulk of its leadership. Such persons cannot understand what it means to be a worker, to feel the stress and alienation of the assembly line, the hospital ward, the office cubicle. Unless they at least spend time laboring in such places, they are bound to be separated from those they lead. Third, the most important thing experts can do is teach workers to become experts. Workers must lead themselves, and there is no reason why they cannot learn whatever is necessary for them to do so. Fourth, a labor movement has to concern itself with every aspect of working-class life: jobs, unemployment, community, politics, family, the environment. Fifth, while workers can be organized and unions can make their lives better, unless these efforts are part of an explicitly anti-capitalist project, victories will always be partial and temporary. Human liberation will never be at hand unless we strive for the abolition of the working class, for an end to wage labor, for a society in which the empowerment and improved circumstances of each is but a moment in the struggle for the collective betterment of all.

Notes

  1. ↩ Unless otherwise noted, all quotations are from the Shotwell or the McAlevy book.
  2. ↩ Michael D. Yates, “Removing the Veil,” from In and Out of the Working Class (Winnipeg: Arbeiter Ring Publishing, 2009).

Tuesday, April 2, 2013

When America Came 'This Close' to Establishing a 30-Hour Workweek





Labor  


Saturday, April 6, 2013, marks the 80th anniversary of a long-forgotten event in American history that bears remembering, especially by progressives.



The April 15, 1933 issue of Newsweek, one of the first in the magazine’s history, contains a remarkable cover headline:  Bill cutting work week to 30 hours startles the nation. Indeed only nine days earlier, on April 6th, the Black-Connery Bill had passed in the United States Senate by a wide margin.  The bill fixed the official American work week at five days and 30 hours, with severe penalties for overtime work.

In his new book, Free Time, labor historian, Benjamin Hunnicutt of the University of Iowa, explains that the bill originally had broad support as a means of increasing employment during the recession and maintaining full employment in the future.  

“We stand unflinchingly for the six-hour day and the five-day week in industry,” thundered AFL president William Green to a labor meeting in San Francisco that spring.  Franklin Roosevelt and Labor Secretary Frances Perkins also initially endorsed the idea, but the president buckled under opposition from the National Association of Manufacturers and dropped his support for the bill, which was then defeated in the House of Representatives.  

In its place, Roosevelt advocated job-creating New Deal spending and a forty-hour workweek limit, passed into law on October 24, 1938, as part of the Fair Labor Standards Act.

But we came that close to an officialthirty-hour workweek in America.  Close, but no cigar…

KELLOGG’S SIX-HOUR DAY

Nonetheless, many American companies did go to a 30-hour workweek during the depression, most prominently, the Kellogg Cereal Company, which established five-day, six-hour, shifts in December, 1930.  Kellogg’s and the workers split the pay loss resulting from the cut in hours; Kellogg’s initially paid his workers for seven hours a day, but upped that to the amount they had previously received for eight-hours work two years later, when he saw that hourly productivity had soared.  

In his earlier books, Work Without End and Kellogg’s Six-Hour Day, Hunnicutt reports that the measure added 400 new jobs to Kellogg’s Battle Creek, Michigan, work force, while improving family and community life dramatically.  After World War II, Kellogg’s began abandoning the six-hour shifts in favor of eight hours, largely because increasing benefit packages made it cheaper to hire few workers and keep them on the job longer.  But the end of the six-hour shifts didn’t come until 1985, when the last six-hour workers were told that if they didn’t accept the longer work days, Kellogg’s would leave Battle Creek.

The six-hours workers were angry but there was little they could do to prevent the change.  They held a “funeral,” complete with a mock coffin, for the six-hour day at Stan’s Place, a local Battle Creek pub, and Ina Sides, an African-American woman who had worked most of her life at the plant, wrote a eulogy:

 
Farewell, good friend, oh six hours!

Tis sad, but true,

Now you’re gone and we’re all so blue!

Get out your vitamins, give the doctor a call,

Cause old eight hours has got us all.


In 1992, I traveled with Hunnicutt to interview former thirty-hour week workers in Battle Creek.  They spoke movingly of the free time they had when they worked shorter hours—“you weren’t all wore out when you got home,” one man told me.  One couple, Chuck and Joy Blanchard, who had both worked at the plant, claimed that the six-hour day made Chuck a “feminist” long before the women’s movement.  He and his wife shared the housework and he was a “room parent” at his children’s school.

The Blanchards spoke to us about how crime had gone up and volunteering down in Battle Creek after the six-hour day ended, as people had less time to look out for their neighborhoods.  The Blanchards said they had little materially, but their lives, blessed with abundant leisure, were happier than those of young families today, who seem to have so much more stuff, but never enough time.

NO VACATION NATION

If the idea that the thirty-hour work week almost became the law of the land EIGHTY years ago comes as a shock, consider a New York Times headline on July 31, 1910:

HOW LONG SHOULD A MAN’S VACATION BE?  PRESIDENT TAFT SAYS EVERY ONE SHOULD HAVE THREE MONTHS

At a time when workers produced a tenth of what they do today, William Howard Taft, a conservative Republican, argued that all workers needed two or three months of holiday time each year to improve health, family connections and productivity.  Yet, more than a hundred years later, Americans average two weeks of paid vacation and a quarter of us get none at all.  

When the organization I represent, Take Back Your Time worked with Florida Congressman Alan Grayson to propose a very modest paid vacation law in 2009, we were practically accused of plotting the end of western civilization as we know it, and of “trying to turn our America into a 21st Century France,” as if we were going to force everyone to appreciate good food and wine.  All this, when the evidence shows that stress from overwork plays a role in five of the six leading causes of death in the US and that workers who don’t take vacations are twice as likely to have heart attacks as those who do.

How is it that the world’s richest country is one of only a handful (the other five are tiny and poor) of countries with no law requiring paid vacations (although residents of Puerto Rico are guaranteed 15 days off each year)?

How is it that we understood the need for shorter hours of work in 1910 and 1933 but have forgotten it today?

REMEMBRANCE AS A CALL TO ACTION

Progressives who want to end unemployment in a way that improves health and limits unsustainable economic growth should be advocating that America provide real vacation time and shorten working hours.  Although workers often say they’d prefer more money to more time, the evidence shows they appreciate the time off when they get it.  

A recent experiment with a compressed four-day workweek (albeit with ten hour days) was extremely popular in Utah.  

More importantly, in Amador County, California, workers voted 71 to 29 percent to retain a reduced work-week of four nine-hour days rather than return to a five-day, forty hour week with higher pay. See “Life Away From the Rat-Race: Why One Group of Workers Decided to Cut Their Own Hours and Pay” (AlterNet, July 2, 2012).

Undoubtedly, for poor workers, shortened hours would need to be combined with a higher living wage minimum, as they would otherwise take on extra jobs to make up for reductions in pay that usually accompany shorter work-time.  But in fact, there is no reason why a nation (the US) where the median worker has seen almost no pay increases since the 1970s despite a doubling of worker productivity, should not reduce working hours without a pay cut, at least for the middle-class and the poor.  

Eighty years ago, the American Federation of Labor and the United States Senate understood that the healthiest and most sustainable way to reduce unemployment was to sharply reduce working hours.  The anniversary of the Black-Connery’s bill passage in the Senate marks a time to pause and ask why progressives aren’t raising this issue again.
 
John de Graaf is a filmmaker and co-author of "Affluenza: The All-Consuming Epidemic" and “What’s The Economy For Anyway?”

Tuesday, March 26, 2013

Across the board, union workers get higher pay

ajc


The Atlanta Journal-Constitution

The Biz Beat



Across the board, union workers get higher pay




(Associated Press)
(Associated Press)


Follow us on Twitter @AJCBiz

You’re sure to strike a nerve in many circles if you bring up the topic of unions and, in this case, union wages.

Unions have been receiving a lot of attention lately. Just this week Michigan’s governor signed right-to-work legislation that makes it illegal for unions to compel non-union employees in the private and public sectors, with some exceptions, to pay dues. (Georgia is also a right-to-work state). AT&T continues to negotiate new agreements with some of its unionized employees, although its 22,000 wireline workers in Georgia and other parts of the Southeast recently ratified new three-year contract.

CNN Money, relying on Bureau of Labor Statistics data, has looked into how the average pay of the top unions in this country stacks up against non-union workers’ wages. The bottom line is that across the board union wages are higher. Here are some of CNN’s highlights:

Government workers: “These workers make a median of $973 a week, roughly $230 more than their non-union counterparts.”

Teachers: “The union members earn $224 a week more than non-union educators, with median weekly earnings at $1,038.”

Firefighters and police officers: “Union workers make about $1,008 a week, and non-union workers make $627.”

Factory workers: “Union workers make about $836 a week, $56 a week more than non-union employees.”

Construction workers: “Union workers earn about $361 more per week than their non-union counterparts.”

Transportation and warehousing workers: “Union employees earn about $215 more per week, or 30%, than non-union workers.”

Utilities workers: “Union employees in this industry tend to earn 10.2% more per week than non-union workers.”

Georgia ranked 49th in union membership in 2011, with 3.9 percent of wage and salary workers belonging to unions. About 12 percent of U.S. workers belong to unions.

Autoworkers Earning Less in U.S. Happy to Compete Again

Bloomberg





Debbie Werner is the face of an American workers’ revolution.

In a break with decades of U.S. auto-union tradition, the prevailing wage paid to new unionized autoworkers is less than that of the average laborer producing items ranging from metal and wood products to food and beverages.

Werner has lived through it all: She joined General Motors Corp. in 2008 before its bankruptcy, lost her job when the factory closed and then was rehired in 2011 when it opened again after the bailout -- joining thousands of new workers earning about half what autoworkers were paid before 2007 and without traditional pensions and retiree health care.

Part of President Barack Obama’s re-election platform is his 2009 decision to support an $85 billion bailout for the U.S. auto industry, the subject of a vigorous exchange at this week’s presidential debate. Less understood is the new class of autoworkers who, even before the bailout, started taking jobs that gave up decades of union gains and agreed to an uncertain economic future to bring thousands of jobs back to American factories.

“In 1960, an autoworker was the symbol of high productivity, global leadership and a middle-class future,” said Harley Shaiken, a professor of labor relations at the University of California at Berkeley. “Today, an autoworker is a symbol of all the pressures of the global economy.”

Werner, though, said she couldn’t be happier.

“It’s just an opportunity for me,” said the 30-year-old, who installs seat-belt covers and dashboard parts on Chevrolet Sonic and Buick Verano cars at General Motor Co. (GM)’s factory in Orion Township, Michigan. “It’s a better life for my kids.”

Union Concessions

Since 2007, the United Auto Workers has agreed to let automakers hire new workers who forgo traditional retiree health care, equal pay for equal work, job security and pensions in exchange for jobs that would have gone to Mexico or Asia. About 13 percent of GM, Ford Motor Co. (F) and Chrysler Group LLC hourly workers, or 15,155 employees, now are entry level.

The union’s concessions were inconceivable -- and easily rejected by labor leaders -- just a few years before. Now, as many as half the workers at the Michigan factory assembling Sonic and Verano sub-compact cars make less than the $19.10 hourly average U.S. manufacturing wage and lack traditional union retiree benefits.

The U.S. economic recovery has been built on the shoulders of autoworkers such as Werner, who left a $9 an hour job at a nursing home in November to earn $16.78 an hour at GM, and David Ramirez, 39, who earns $18.41 an hour installing mounting brackets for transmissions at the same plant. In August 2011, he escaped an $8 an hour job making doughnuts at Wal-Mart.

Significant Gains

While the rest of the U.S. economy continues to lag, the significance of the auto industry’s comeback is hard to overstate. Autos contributed 18 percent of the 2.2 percent average rate of growth for gross domestic product in the recovery that began in the third quarter of 2009 -- when GM followed Chrysler out of U.S.-backed bankruptcy -- to the second quarter of 2012, according to data from the Commerce Department.


The U.S. auto industry sold cars in September at a faster rate than in any month since March 2008, before the failure of Lehman Brothers Holdings Inc. GM earned $9.19 billion last year. Automakers throughout the U.S. have been on a binge of hiring that has led to third shifts in eight states.

“This is the reason we have job growth in the United States,” Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, Michigan, said in an interview. “I don’t think we would have seen the new investments and the job growth in the United States without some movement in labor costs.”

Closing Gap

The compromises will close the labor-cost gap at GM, Ford and Chrysler factories with those at U.S. plants for Toyota Motor Corp. (7203) and Honda Motor Co., Dziczek said. By 2015, GM’s total cost for wages and benefits will be about $59 an hour, compared with $56 at Toyota. In 2007, GM estimated the gap with Toyota at $25 to $30 an hour. Chrysler’s average hourly labor costs may fall by 2015 to $53, lower than Toyota’s, CAR said.

The price is steep in terms of an elite working-class standard of living that has been a hallmark of the UAW, said Shaiken, the labor professor. The risk is that the concessions will spread through the U.S. labor market in much the same way union gains of the past seven decades have benefited workers, he said.

‘Reasonable’ Lifestyle

“They’re making a wage where hopefully they can have a reasonable family life,” Michigan Governor Rick Snyder, a Republican, said in an interview at Bloomberg’s New York headquarters. “Everyone had to make some sacrifice. The cost structures were so high.”

Until now, autoworker pay has never dropped below the average industrial wage since Henry Ford instituted the $5-a-day wage for factory workers in 1914, according to a comparison of historic prevailing UAW wages provided by Ford in 2011 and pay data from the U.S. Bureau of Labor Statistics.

Applying the hourly rate for Werner and Ramirez to a 40- hour week, 52 weeks a year, would total about $35,000 to $38,000 annually. Overtime and other premiums, such as for working night shifts, can increase those totals. This is unfamiliar territory for a U.S. autoworker: between the 2011 median income of $50,502, and the poverty line of $23,000 for a family of four.

“Henry Ford pioneered it and the UAW and other industrial unions ensured it became a feature of life for the American worker,” Shaiken said of the middle-class lifestyle. “This just underscores that we’re in a very troubled time.”

Werner’s Arrival

Werner doesn’t feel troubled by her new job at GM. It’s much better that what she confronted four years ago, when she first came to GM for a temporary job at the Orion plant, which was then building Malibu sedans. Her cousin, who works at another GM factory in Michigan, helped her get that job. GM was about to enter bankruptcy and the plant was expected to close.


“In 2008, it was very depressing,” Werner said in an interview over lunch at a Denny’s restaurant not far from the elementary school her two sons attend in Sterling Heights, Michigan. “Both the permanent employees and the temps knew they were going to get let go.”

She said she didn’t want to live on unemployment benefits after the plant shut down, so she took the job at the nursing home. In the meantime, she went back to school to add a bachelor’s degree in health-care management to her associate’s degree in business from Baker College. Her bills mounted. Her sons, ages 6 and 8 now, heard “no” way more often than “yes,” she said.
“I gave up on GM,” she said. “I didn’t think I’d ever go back.”

‘Amazingly Hard’

The Orion plant closed in November 2009. While GM said at the time it might open at some point, workers weren’t sure.

One of them was Rachelle Wakefield, 27, a lower-paid, entry- level worker who got into the plant originally thanks to a referral from her father, Pat Sweeney, president of UAW Local 5960, which represents workers there. After Orion closed in 2009, Wakefield landed a different job with the union: calling members to help them find services and support to get back on their feet. In many cases, the phones of the 40 or so workers she tried to reach each day were disconnected because they couldn’t afford service. Many lost their homes.
“It was amazingly hard,” Wakefield said. “It was scary. We didn’t know if we were ever going to come back.”

Factory Changed

In August 2011, Orion did open, as a very different plant. The agreement means there are fewer of the expensive, specialized workers known as “skilled trades.” In addition, union workers share some of the 4.3 million square feet under the factory roof with outside subcontractors who do non-assembly jobs for even lower pay than entry-level GM workers, Sweeney said.

Orion began making Sonics in August 2011 and in November added the Verano.
On Nov. 24, Debbie Werner got a call to be at the Orion Township plant the next day if she wanted her old job back. She was a temporary worker until June, when she was hired full-time. All her benefits will kick in shortly after a probationary period expires, she said.

Suddenly, this $16.78 an hour job that seems austere by auto standards looks to Werner like a comfortable life, an escape from the hardship facing so many other people still struggling to dig out from the 2009 recession.

‘Real Christmas’

Werner has moved out of government-subsidized housing and bought a newer sport-utility vehicle with leather seats and a built-in television screen. She’s planning to use profit sharing next year to look at buying her first home.

“Now I can take my kids to Chuck E. Cheese,” she said. “They actually had a real Christmas last year and I’m debt- free.”

She picks her boys up from school, sometimes making a stop at McDonald’s, before she heads to the plant for a 5:30 p.m. shift start. Her father watches the boys overnight. She carpools with her sister, who is now a temporary worker at the plant, making a regular stop each night for cigarettes and energy drinks to get ready for the shift. She gets out in time to take the boys to school and then goes to sleep, she said.

“I think things will all just go up from here,” she said. “I feel secure in my job. I feel like I have room for advancement.”

Decades Past

Werner’s relative prosperity is a sharp contrast with the lives autoworkers lived in past decades when UAW members often made 20 percent to 50 percent more than the prevailing manufacturing wage -- particularly from the mid-1980s, according to U.S. data. Overtime during a truck boom in the late 1990s meant some workers cleared $100,000 a year.

The pay, which is still about $58,500 before overtime for a traditional worker, meant they could afford a robust middle- class life with perks such as cottages in Michigan’s northern vacation areas and collections of snowmobiles, jet skis or motorcycles. A fixed pension and health care plan helped workers maintain many of those perks in retirement.

The onslaught of cheaper models churned out by non-union workers with lower labor costs at the U.S. factories of Toyota and Honda finally weakened U.S. automakers to the point where the union was forced to make compromises in 2007 they had long resisted, said Art Schwartz, a top GM labor negotiator who worked on the agreement that created the entry-level workers before he left GM in 2009.

Share Erosion

GM, Ford and Chrysler’s share of the U.S. market fell from 87 percent in 1970 to about half of the market in 2007.
“The UAW lost their grip on the situation when the transplants came in and they couldn’t organize them,” Schwartz said. “They came to the realization that something needed to be done.”

The deal Schwartz helped craft allows automakers to hire new workers at a wage about half what traditional members were paid and exclude them from the current $36,000 a year retiree pension plans traditional ones will get, a benefit first negotiated in 1949.

Instead of the pension, the new workers such as Werner and Ramirez have a 401(k) program that includes a small provision toward health care. Under today’s contracts, the new workers may eventually reach the same pay as traditional workers. They never will receive the fixed pension or paid retiree health care.

The U.S. autoworkers went further than others: In 2006, Volkswagen AG employees in Germany agreed to extend their work week by six hours for no extra pay in return for VW’s promise that all of its German factories would remain open. The deal was an important part of VW’s renaissance.

Too Late

While the concessions were profound, they came too late to prevent GM and Chrysler from slipping toward bankruptcy in late 2008.

When the automakers first sought a bailout in late 2008, members of Congress cited UAW pay as an issue. They demanded the UAW and automakers eliminate the so-called jobs bank, a plan added in 1984 that allowed workers whose plant closed or job was eliminated to continue to receive most of their pay without having to work until they retired or found a new factory job.

Now, thanks to the UAW’s flexibility, lower paid entry- level workers and the ability to start the factory with a “clean sheet” design that allows for efficient technology, GM can afford to build small cars in Orion instead of Mexico, said Gerald Johnson, GM’s North America manufacturing manager since 2002.
Many of the techniques learned in Orion Township are spreading to other GM plants, Johnson said.

UAW Gains

As U.S. automakers hire new, lower-cost workers the UAW has posted two straight years of membership gains, to 380,719 members last year, according to a March union filing with the U.S. Labor Department. UAW membership peaked at 1.5 million members in 1979.

The UAW has said that Chrysler and GM can have as many as 25 percent of their workforce represented by entry-level workers by 2015 and Ford is capped at 20 percent. If the automakers have more workers than that in 2015 at the entry-level wage, some of those workers may be eligible to make $28 an hour.

Already, 9 percent of GM’s 49,500-member UAW workforce is entry-level, according to the automaker’s data. About 12 percent of Ford’s 42,700 hourly workers are new hires and 20 percent of Chrysler’s 27,000 hourly workers were entry level in June.

The UAW wasn’t allowed to strike GM and Chrysler in 2011, a condition of the bailout. In 2015, it will be a traditional bargaining session and if companies are still posting healthy profits, workers may try to get back some of the benefits they gave up, Dziczek said.

“What I make right now, I could live off of it,” Werner said. “Do I want to live off of it the rest of my life? No -- $16 an hour, single mom, is not going to put two kids through college.”

No Grumbling

While some workers may grumble about people who do the same job at the Orion factory and make more money, Ramirez isn’t one of them. He lost a GM factory job in 2009 at a plant that was closed in the automaker’s bankruptcy. He spent two-and-a-half lean years scraping by as he hoped and waited to be called back.

Besides the doughnut stint at Wal-Mart, Ramirez also tried to pay the bills by cutting lawns and by making doughnuts at a Tim Horton’s fast-food restaurant alongside a woman who had to live out of her car with her daughter.

Now, Ramirez says he feels he has been delivered from the edge of poverty onto a pathway to prosperity. Not only did his new GM job allow him to pay off his mounting debts, he also was able to afford what was once the epitome of American automotive luxury: a Cadillac. Sure, it’s an eight-year-old Caddy, but it beats the 21-year-old Ford Taurus he was driving.

“People were just surviving and now we have great jobs,” Ramirez said. “We’re the wave of the future.”

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net; Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much





Frederick E. Allen
Frederick E. Allen, Forbes Staff
I am the Leadership Editor of Forbes.
Leadership
12/21/2011 @ 5:42PM |207,422 views

How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much

LEIPZIG, GERMANY - NOVEMBER 05:  Workers assem...
A BMW assembly plant in Leipzig, Germany.


In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”

There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”

Mund points out that this goes
against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.
As Michael Maibach, president and chief executive of the European American Business Council, puts it, union-management relations in the U.S. are “adversarial,” whereas in Germany they’re “collaborative.”

Does such a happy relationship survive when German automakers set up shop in the U.S.? No. As a historian observes in the article,  “BMW is a German company and it has a very German hierarchy and management system in Germany,” yet “when they are operating in Spartanburg [in South Carolina] they have become very, very easily adaptable to Spartanburg business culture.” At Volkswagen’s Chattanooga plant, the nonunionized new employees get $14.50 an hour, which rises to $19.50 after three years.

The article’s author, Kevin C. Brown, asked Claude Barfield, a scholar with the American Enterprise Institute, why the German car companies behave so differently in the U.S. He answered, “Because they can get away with it so far.”

 Read the complete Remapping Debate article here.


A tale of two systems

Original Reporting | ByKevin C. Brown | Alternative models, Labor
 
Dec. 21, 2011 ­— American autoworkers are constantly told that high-wage work is an unsustainable relic in the face of a hyper-competitive, globalized marketplace. Apostles of neo-liberal economic theory — both in the public and private sectors — have stressed the message that worker adaptation is necessary to survive. Indeed, Steven Rattner, President Obama’s “car czar” during the restructuring of General Motors and Chrysler in early 2009, spoke last week of his regret that the federal government had not required the United Auto workers to take a wage cut at that time to enhance the competitiveness of those companies, comments similar to those he made in a recently published book (after the outcry created by last week’s remarks, Rattner yesterday backed away from them, though reiterating his view that more “shared sacrifice” would have bolstered American competitiveness).

Apostles of neo-liberal economic theory — both in the public and private sectors — have stressed the message that worker adaptation is necessary to survive.
Governments, too, the globalists have contended, should not think that markets can or should be controlled. As Remapping Debate reported earlier this year in an article about the role of large consulting firms in the promotion of the notion that national policy can and must allow global capital a free hand, McKinsey & Co. was already arguing back in 1994 that “a national government has no choice but to move forward to embrace the global capital market unless it wants to harm its own citizens, its economy and its own purposes.”

But the case of German automakers — BMW, Daimler, and Volkswagen — tells a different story. Each company produces vehicles not only in Germany, but also in “transplant” factories in the U.S. The former are characterized by high wages and high union membership; the U.S. plants pay lower wages and are located in so-called “right-to-work” (anti-union) states.

It turns out that “inevitability” has nothing to do with the differing conditions; the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.

Sales and profitability

In 2010, over 5.5 million cars were produced in Germany, twice the 2.7 million built in the United States. Average compensation (a figure including wages and employer-paid benefits) for autoworkers in Germany was 48.97 Euros per hour ($67.14 US), while compensation for auto work in the United States averaged $33.77 per hour, or about half as much as in Germany, all according to 2007 data from the Bureau of Labor Statistics. For Germany-based auto producers, the U.S. is a low-wage country.

Despite German companies’ relatively high labor costs in their home markets, these firms are quite profitable. An examination of the latest publically available financial statements of BMW, Daimler (Mercedes-Benz cars), and Volkswagen reveals strong sales and profits even in the midst of the currently weak consumer markets in Europe and the U.S. In 2010, for example, BMW, produced 1.48 million cars (63 percent of them in Germany), and earned a before-tax profit from its automotive division of 3.88 billion Euros. The Mercedes-Benz car division of Daimler, likewise produced 1.35 million cars (72.4 percent in Germany) in 2010, and earned a before-tax profit of 4.65 billion Euros.

Race to the bottom in the U.S.

Officials in anti-union states have long sought to lure businesses with the promise of free rein in relation to labor (and to regulation more generally). Sen. Lamar Alexander (R -Tenn.) delivered the weekly Republican Party address this past June, telling his listeners frankly that, when he was Tennessee’s governor in 1979, the state’s right-to-work law was part of his successful pitch in getting Nissan to open an auto plant.

It turns out that “inevitability” has nothing to do with the differing conditions; the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.
 
Alexander participated in a ceremony celebrating the opening of a new Volkswagen assembly plant earlier this year near Chattanooga, and again he cited the state’s right-to-work law as among the reasons that Volkswagen chose to come there.

At that Chattanooga plant, according to a company spokesperson, new employees earn $14.50 an hour, with wages gradually rising to $19.50 after 3 years on the job.

A representative of BMW’s Spartanburg plant declined to divulge wages employees earn in its South Carolina (non-unionized) facility, but the Washington Post reported last year that employees at the plant earned $15 per hour.

Workers at American companies have seen their wages eroded. As Remapping Debate has reported, the UAW has made significant concessions on wages, especially through the creation of a permanent “Tier 2” level for all new employees. Whereas incumbent “Tier 1” workers earn about $28 an hour, all new UAW hires at the GM, Ford, and Chrysler earn around $15 per hour.

The companies have argued that this new tier is essential. Marci Evans, a Ford spokesperson, told Remapping Debate, “It is our [Ford’s] preference to build competitively in the markets we sell in.” She added, “reduced cost through introducing an entry level [Tier 2] workforce” is an important part of that strategy.

Gary Casteel, the Region 8 director of the UAW, the region covering the whole southeast of the country, acknowledged the creation of “Tier 2” as “concessionary,” and said, “It’s never attractive to not have equal pay for equal work, but when you’ve got Nissan hiring in Mississippi for $12.50…and Volkswagen for $14…how are we going to maintain a wage level when our competition is doing this?”

The counter-example in Germany

Workers in the German auto industry maintain high wages and good working conditions through two overlapping sets of institutions. First, in the auto industry, virtually all workers are unionized members of IG Metall, the German autoworkers’ union. With such union density, workers have considerable power to keep wages high. German autoworkers have the right to strike, but as Horst Mund, head of the International Department of IG Metall explained to Remapping Debate, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties.”

According to historian and author Marko Maunula, “There is no real industrial nationality anymore.”
 
In addition to high trade union density supporting the power of German autoworkers’ wages, the German constitution itself includes a second mechanism for keeping employees involved in the decisions of the firm for which they work. The Works Constitution Act provides for the creation of Works Councils in each factory. The Works Councils provide a mechanism through which a company’s management must work with employees, whether they are in a union or not, on issues affecting work life, such as shop floor conditions, scheduling shifts, and other issues particular to the factory. This system, according to Mund, institutionalized “direct contact for workers’ representatives with management at various levels, from lower to middle to senior management in daily affairs. So you exercise some kind of dialogue where you don’t always wear your management pin or your union pin.”

Mund points out that the German example goes “against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages…despite our possibility to influence companies, the economy is working well in Germany.”

Are German unions nice and American unions nasty?
Mund says “there are strong contradictions between the way companies that…are used to dealing with unions in Germany, behave differently when they go elsewhere, not only in the U.S., but also in other countries.” What accounts for the differences?

Michael Maibach, president and chief executive officer of the European American Business Council, described this apparent difference by saying that union-management relations in the U.S. were “adversarial" as opposed to the "collaborative” German model. J. Ed Marston, a spokesperson for the Chattanooga Area Chamber of Commerce, likewise told Remapping Debate that “Workers councils in Germany promote cooperation between workers and managers and they deliver value and they continue to thrive…Compared to UAW, where there is an adversarial relationship.”

German union official Horst Mund sees the lauding of “cooperation” in the German context as profoundly misleading, saying companies "would not talk to us either if they had the choice.”
 
According to Mund, however, “The accusation that American unions are more radical and destructive…definitely has to do with the hostile environment in which the unions have to act. How can they be constructive and friendly if their asses are kicked all the time?” Mund sees the lauding of “cooperation” in the German context as profoundly misleading, saying “they would not talk to us either if they had the choice.”

Mund emphasized the importance of the trade union and works councils in maintaining workers’ participation and high levels of remuneration, and said that the focus was not to maintain the good will of individual firms. He said, “Companies in Germany, while they are bound by law to work with us in works councils, and we are present on supervisory boards, they just have to do this. For most of the companies, not for all, it is not something they would do if they were not forced to do that. The companies are there to make profit, and in the eyes of many managers we are not conducive to making as much profit as possible, but rather a hindrance.”

“Because they can get away with it”

Marko Maunula, a historian and author of the book, Guten Tag, Y’All: Globalization and the South Carolina Piedmont, 1950-2000, told Remapping Debate that foreign-based manufacturers like BMW “are very cognizant of the political climate of communities,” and they behave differently depending on the legal and social context within which they find themselves. Globalization over the last 20 or 30 years, Maunula suggests, has resulted in a situation where “there is no real industrial nationality anymore.” Though “BMW is a German company and it has a very German hierarchy and management system in Germany…when they are operating in Spartanburg they have become very, very easily adaptable to Spartanburg business culture.”

Coming from a very different perspective, Maibach told a very similar story: unlike in Germany, where unionization and high wages are normalized by law and custom, “the U.S. has a different tradition” and “companies have a choice to make” about where to locate their facilities, often deciding on places where the risk of unionization is lower.

Mund relates the initial perplexity of his American counterparts in response to the anti-union stance taken by German automakers in the U.S.: “In the past we frequently had the impression that our American colleagues thought we would just have to talk to management here in Germany in the sense that ‘look, behave decently, you know us, we’re the good guys, our American colleagues from the UAW they are equally good, so behave mutually and everything will be fine.’”
“But,” Mund said with understatement, “It is not working like this.”

When asked why German firms operate so differently with respect to labor in different countries, Claude Barfield, a resident scholar at the American Enterprise Institute where he studies international trade and globalization, told Remapping Debate that they do so, in part, “because they can get away with it so far.”

Though a Volkswagen-Chattanooga spokesperson told Remapping Debate that “it is up to our production team members to decide” whether to join a union, Barfield points out that all of the German-based auto manufacturers in the U.S. located in right-to-work states are “not unhappy with the situation they have now,” citing the fact that they “have more authority, they have more power” than they would in a unionized context.

Barfield said that factors other than wages brought the German carmakers to right-to-work states. A central reason for their interest in those states, he says, “has to do with not wanting to…get involved with work rules and seniority.”
They have, he continued, “a much greater flexibility just in assigning work, and to be able to have plants change as conditions change. So, they’re not unhappy with that. They would not say they are happier with this than the system they deal with in Germany, but they probably are.”

Making choices

Returning to the experience of Germany’s domestic auto industry, Mund says that, while “it is not a law of nature that you have to be non-unionized to be successful,” companies are clearly choosing not to be union where they don’t have to.

“When the Democrats were in [full control of Congress] under Obama, they promised to change” — making it easier for unions to organize through a card check system — but “that didn’t happen.” — Claude Barfield, American Enterprise Institute
 
Could conditions in the U.S. be changed to produce a structure that, like Germany, protects workers against declining wages and conditions?

Barfield noted that “you’d have to change major state law as well as federal law.” His prognosis is not that it is impossible as a legal matter, but that, as a practical matter, “it will never look like Germany.”

“In the U.S., there’s no prospect that we will change our laws,” he continued. “When the Democrats were in [full control of Congress] under Obama, they promised to change” — making it easier for unions to organize through a card check system — but “that didn’t happen.”

More broadly, Barfield said, “It’s a different tradition of business, government, and labor relations. Three pieces of things all together in Germany and the U.S. never had that. So I don’t think it’s just that the laws per se, it’s the attitude of corporate leaders and union leaders and governments. Not because of one specific piece of legislation.”

If he is right — and no one we spoke with disputed Barfield’s short-term political assessment —— conditions for labor in the U.S. auto industry will continue on their current path, a path described by the UAW’s Casteel as “spiraling downwards.”

On the other hand, despite Barfield’s reference to tradition, the “tradition” in the U.S. through the 1970s was having a highly unionized auto making industry, one that paid good wages. Indeed, the tradition was such that the initial forays of German automakers into the U.S. saw them accept unionization in their transplanted factories (see box below).

Casteel and Mund hope for a return to that tradition, with Casteel saying, “Corporations aren’t going to give back to the workers unless they are made to.” The UAW has said that it is renewing its efforts to organize the southern transplants, but has not released specifics on its strategy or timetable.
A different beginning
Despite the current differences in auto industry labor practices in Germany and U.S., German auto firms’ foray into manufacturing in the U.S. initially conformed to the high-wage, unionized mode of German industry. As part of a wave of foreign direct investment in the U.S. by European-based firms, in 1978, Volkswagen opened the Westmoreland Assembly Plant, 35 miles outside of Pittsburgh. At the time, most autoworkers in the United States were members of the United Auto Workers, and Westmoreland became no exception, and the plant rapidly unionized.

Volkswagen’s quick acceptance of labor organizing at its first American plant was apparently not out of the ordinary for newly arrived foreign-based firms. In 1981, two economists asked in the U.S. Labor Department’s Monthly Labor Review, “Do foreign owned U.S. firms practice unconventional labor relations?” Noting that “it is very possible that unionization may pose no great problem for foreign-owned firms, especially those with European parent companies, because they have been dealing with unions successfully for many years,” the authors’ survey of unions and firms in the U.S. concluded that “foreign owned companies do not differ from domestically owned companies in their approach to most labor relations issues.”