AUTO UNION TALKS: Pseudo Middle Class non-sustainable...

As many of you know, here in Detroit it is time for the United Auto Worker’s Union (UAW) to talk contract with the auto companies. These negotiations nearly always resulted in increased benefits to the auto workers BUT those days are long gone and things have changed.

This year especially, the UAW cannot strike GM or Chrysler as part of the bailout deal where U.S. taxpayers saved union and non-union jobs and gave those companies a second life instead of letting them crash and burn as some staunch capitalists suggested should have happened; a result of mismanagement and union greed.

Ford is the only company that the UAW can strike since Ford did not take corporate welfare money from the U.S. taxpayer.

I feel kind of bad for Bob King, the president of the UAW; he has to show the country that unions are not mindless greedy pigs but are partners of industry working to help keep companies profitable and competitive in the new global economy BUT he also has to give his union members what they want which is getting back all the benefits they agreed to forgo to keep the company viable.

King said something that caught my eye; he said that second-tier wages are too low to sustain a middle-class lifestyle.

Union members agreed that all new hires would start at a wage of $14 to $15 / hour as opposed to $30 / hour or more for the existing workers. One of their demands is for the new hires to get an increase in their wages to bring them up and more in-line to what older workers make.

They did not understand and still appear not to understand that the whole point of lower wages for new hires was to eventually retire all high wage older workers making all workers earning a lower, realistic and more sustainable wage.

Now about the fact that $15 / hour is too low to sustain a middle-class lifestyle?

The unions have argued and continue to argue that their workers represent the middle-class in this country and anti-union efforts are designed to kill the middle-class in this country and many people in this country are starting to realize that the argument they are making is a bunch of hogwash.

The middle-class is the economic and I guess social class that lies between the poor class and the rich class. It is hard to define the rich class these days but you can say that millionaires define the rich class and the poor class is composed of people and families that are struggling to make ends meet.

That leaves a huge area in the middle that can be split into lower middle-class and upper middle-class and probably includes a family income range anywhere from $50,000 to $250,000 and that is a wild guess.

The unions, especially the UAW here in Michigan, in my opinion, created a pseudo middle class in the years where unions ruled the auto industry. Auto manufacturers were making money so they did not mind giving into worker demands which grew and grew with each contract until globalization collapsed the sustainability of those demands in the face of more and more global competition.

I call the auto workers a pseudo middle class because in most cultures the working class and especially the non-skilled, non-educated working class occupies the economic and social low lands or as in our culture at most the lower middle-class.

Don’t get me wrong in those heady days of the 50s to the 90s, union workers were definitely in the middle-class and it was a good thing for our society. It allowed basically unskilled, uneducated workers to live life large so by pseudo middle class, I mean they were propelled into the higher standard of living solely through the power of being able to strike a company into submission.

The auto workers shared the middle class with educated and skilled workers who in some cases, abandoned their skills and education and joined the UAW so they could make more money and get more benefits and this is why that model of employment, in the end, was not sustainable because it was truly a house of cards waiting to tumble.

So Bob King’s cry that $15/hour cannot sustain a middle class lifestyle is absolutely true, it cannot and will not. It will sustain a lifestyle that can be supported on a $15/hour wage.

So you see the dilemma here; UAW workers want to keep the pseudo middle class status afloat but in today’s reality, it is sinking and will never float again; those days are gone and they must accept that if they are to have a job at all.

The workers making the $15 / hour are ecstatic and very grateful in these harsh economic times at least in the interviews I have seen. It is the older workers, those living the pseudo middle class lifestyles that are not willing to see the old days go and I can see their point.

Ford, on the other hand, wants to offer all workers, generous profit sharing checks which they already have this year ($5,000 / worker) and that is a sustainable model; share profits when you have profits. Ford also is promising to create more and more, second-tier jobs giving the unions a source of dues paying members.

This is a pivotal time for the UAW and Bob King is in the middle. He has to somehow convince the rank and file to follow his lead and direction in these crucial negotiations or history will record the end of private industry unionism.