Another Anti-Union Talking point debunked

[Steeplerot]

Originally posted by: Fern

Originally posted by: TheRedUnderURBed
How far will management and the corporate thugs go to smear the middle class workers?
Even fellow working class folks bashing workers and supporting lower wages against their own best interests.
Well, lies and distortions are on the table, like usual.
-snip-

IMO, you're blaming the wrong people for this common misunderstanding.

As I've said before, the journalists writing these stories are confused, and spread that confusion to others.

I'll try again, the wages between the US auto makers and the others (e.g. Toyota) are similar (as noted above by others).

The trouble stems from a lack of understanding accounting rules and practice.

In accounting it's called *Cost Allocation* under the principals of *cost accounting*.

The costs of a business are allocated (in various methods) to the product they produce. The US automakers have a lot of "legacy costs" (costs of former employees or those no longer working etc). These costs are allocated to the products (autos/trucks); they are allocating them based on labor hours per vehicle.

So, the larger figure ($70) includes not only the salary & benefits of the employees actualy working on the autos, but the legacy costs as well.

The journalists are looking at the larger figure and misunderstanding that as being only hourly labor costs for those employees actually working now.

For those untrained, examining financial data can lead to all kinds of confusion and mistakes.

Fern

I see no misleading, except those that are trying to say that a worker gets paid 70+ an hour which includes health care and pension. This is plain untrue. The legacy costs are the companies, not paid to the current Union workers, it is a obvious anti-union smear.

 

[Vic]

Originally posted by: ElFenix

Originally posted by: Vic

Exactly. Unions are an integral aspect of free market capitalism, just as corporations are. Management and capital can organize, and so can labor. In fact, it would require a govt intrusion into the free markets to prevent the formation of labor unions.
This wingnut notion to the contrary is nothing but ignorant ideology.

unions as they exist are a government backed monopoly on labor in many states. that's not free market either.

I agree. I said that unions, the ability of labor to freely organize, were integral to free market capitalism. I didn't say our existing system is an ideal free market capitalism.

 

[Vic]

Originally posted by: Double Trouble

Originally posted by: Vic

Originally posted by: Zebo
By the way a union is the free market deciding what they are worth.

Exactly. Unions are an integral aspect of free market capitalism, just as corporations are. Management and capital can organize, and so can labor. In fact, it would require a govt intrusion into the free markets to prevent the formation of labor unions.
This wingnut notion to the contrary is nothing but ignorant ideology.

Uhhh... me thinks you are ignorant of the realities Vic. There are government laws and regulations in place specifically designed to allow workers to unionize and provide protections for those trying to unionize. In the absence of such protections and regulations, unions would not exist (at least not effectively), the corporations would crush any attempt to unionize. In fact, if you look at history, that's exactly what happened, worker / union movements got crushed -- violently if needed -- until governments created regulations and protections for workers and unions. Of course, feel free to disagree simply based on your ideology, but history is proof that unions, in their present form, can not and did not exist without government help.

Think about it. In the absence of government protection, if I even suggested creating a union where I work, I'd get instantly fired and blackballed from any similar corporations. Government regulations (ie intervention in the free market mechanism) are needed to allow unions to form. Even with government regulations, some corporations like Wal-Mart have managed to effectively destroy any possibility of union activity within the company, going as far as to simply close stores and fire everyone if workers choose to unionize.

Unions were needed to counteract the massive imbalance in terms of negotiating power the employer had over employees. There are instances where that need still exists today, but they are few and far between, which is exactly why union membership continues to drop.

I'm not arguing that unions should not exist at all or that they don't have a place in the labor market.

If one single person suggested an effort to unionize, yes, they'd be fired. But a single person is not a union. And an entire shop being fired for unionizing is better known as a "strike." Wal-Mart has the advantage of having 10,000+ stores to weather one of those. Most businesses don't share that model.

Government protection for unions was instituted for the same reasons capital and management have their own government protections -- to reduce/prevent violence.

 

[Zenmervolt]

Originally posted by: TheRedUnderURBed

Originally posted by: frostedflakes
We figured this out a long time ago.

$60k/yr is still good money for unskilled labor, though. And I'm sure the work is tough, but there are plenty of people out there working physically demanding jobs that don't get paid $60k/yr.

But I think it's great that the UAW has made concessions, the new contracts should allow the domestic auto industry to be more competitive with non-union labor working for foreign automakers.

True, but I still kept hearing this tripe on the forum, if anything else it is nice to have a thread to link to when some of our more partisan posters decide to use the talking point. (not that it stops them even when shown to be wrong)

It remains a valid point because the cost of doing business with a union is not only that of those currently working, but also the cost of defined benefit retirement programs for people who used to be working but have now retired.

Unions cost more to employers because the ridiculous retirement programs create an undue burden. The foreign companies provide 401(k) type retirement programs rather than pensions and are thus able to avoid the additional costs.

Not only that, but currently-working employees will eventually retire and take advantage of that pension, therefore they will eventually use those additional benefits and it can be argued that they do, in fact, cost that $70/hour if you amortize their lifelong expense over their working years.

In any case, $60,000/year for a production line worker is ridiculous unless they're working in LA or some other place with insane costs of living. A person making $60,000/year in, say, Chrysler's Toledo, Ohio plant, can live like a king if he makes even half an attempt at being responsible with his money. I mean, that's an area of the country where you can buy a very nice house for $60,000-$80,000. A person making $60,000/year in the areas where the Big 3's assembly lines are is upper-middle-class.

ZV

 

[Duwelon]

Originally posted by: Fern

Originally posted by: TheRedUnderURBed
How far will management and the corporate thugs go to smear the middle class workers?
Even fellow working class folks bashing workers and supporting lower wages against their own best interests.
Well, lies and distortions are on the table, like usual.
-snip-

IMO, you're blaming the wrong people for this common misunderstanding.

As I've said before, the journalists writing these stories are confused, and spread that confusion to others.

I'll try again, the wages between the US auto makers and the others (e.g. Toyota) are similar (as noted above by others).

The trouble stems from a lack of understanding accounting rules and practice.

In accounting it's called *Cost Allocation* under the principals of *cost accounting*.

The costs of a business are allocated (in various methods) to the product they produce. The US automakers have a lot of "legacy costs" (costs of former employees or those no longer working etc). These costs are allocated to the products (autos/trucks); they are allocating them based on labor hours per vehicle.

So, the larger figure ($70) includes not only the salary & benefits of the employees actualy working on the autos, but the legacy costs as well.

The journalists are looking at the larger figure and misunderstanding that as being only hourly labor costs for those employees actually working now.

For those untrained, examining financial data can lead to all kinds of confusion and mistakes.

Fern

QFT. The idiotic thread title and subtitle should be changed, because the OP clearly doesn't know what he's talking about.

OP, come back with real data after you actually bear an understanding of what you're talking about. Which chapter are you a member of again?

 

[babylon5]

Georgia has no sympathy for any bailout for Big3:

"Westmoreland argues that fairness is another issue. Why, he wonders, should his constituents subsidize auto workers who, thanks to generous union contracts, often earn higher wages and better benefits than nonunion workers in the South? And didn't those contracts help get the Big Three into this mess?"

The residents of this town are learning to enjoy Korean barbecue, and are wary of bailing out American automakers. 'The foreign cars took the lead, and they deserve it,' says one.

 

[bctbct]

Originally posted by: babylon5
Georgia has no sympathy for any bailout for Big3:

"Westmoreland argues that fairness is another issue. Why, he wonders, should his constituents subsidize auto workers who, thanks to generous union contracts, often earn higher wages and better benefits than nonunion workers in the South? And didn't those contracts help get the Big Three into this mess?"

The residents of this town are learning to enjoy Korean barbecue, and are wary of bailing out American automakers. 'The foreign cars took the lead, and they deserve it,' says one.

the irony


"Kia in 2003 announced that it would build a plant with an estimated 1,500 workers, in a Southern US state. That number has since grown to 2,900 direct reports and 2,600 over five supply companies.

Georgia?s incentive package totals about $410 million, including $76 million in job tax credits and $130 million in property tax abatements. Mississippi?s last offer was nearly $1 billion, and included an incentive that Georgia could not offer ? a $240 million federal tax benefit under Gulf Opportunity Zone Act, aimed at rebuilding states affected by Hurricane Katrina. No word from Kia why the company took the lower offer from Georgia, but the area is more densely populated, and offers more square acres than Mississippi was offering. Kia in fact rejected its first choice, Meridian, Mississippi, due to sparse population and limited acreage. "

edit

"This victory is welcome news to Georgia, which will lose its GM plant in Doraville, and its Ford plant in Hapeville, by end of 2008. Between the two plants, layoffs nearly equal the 5,900 that the Kia plant will employ. The Kia plant is slated to open in 2009."

Georgia thinks trading the same number of jobs that pay 1/2 as much is good for them. How fucked up is that? They must fail at math.


Text

 

[BoomerD]

The automakers saw the payments to the pension and retirees plans as a good thing years ago, because it represented money they didn't have to pay in wages at the time.
Consider that the autoworkers took parts of the raises they were scheduled to receive and put those monies into retirement packages instead of opting to have it on their paychecks.

Now, all of a sudden, it's the autoworker's fault that GM and the others are in trouble?

I don't think so. The car companies are the ones who have made such bad business decisions over the years. THEY agreed to the contracts, including the promise of future payments in exchange for lower wage increases at the time.

They should stand up and keep their promises to the workers, OR, retroactively pay the workers all the monies that had been deferred into the future payment plans such as retirement medical and such...with the appropriate amount of interest.

 

[bctbct]

Originally posted by: Stunt
"average wages for workers... ...were just $28 per hour"
Just?! $28/hr for mostly unskilled laborers is huge.
The $70 figure is wages plus fringe (benefits)

For budgetary reasons my company uses $55/hr per employee because the total cost of the employee is much higher than their wages. That doesn't even include the liabilities associated with that worker. The total cost of a big 3 workers is huge relative to comparable jobs in the manufacturing sector.

$55 US dollars? That is very high.

 

[bamx2]

No sympathy for the Big 3 or UAW from me .

Writing your congress people might help stop (or at least add strings) the handout (bailout) .


http://globaleconomicanalysis....stop-auto-bailout.html

 

[smack Down]

Originally posted by: BoomerD
The automakers saw the payments to the pension and retirees plans as a good thing years ago, because it represented money they didn't have to pay in wages at the time.
Consider that the autoworkers took parts of the raises they were scheduled to receive and put those monies into retirement packages instead of opting to have it on their paychecks.

Now, all of a sudden, it's the autoworker's fault that GM and the others are in trouble?

I don't think so. The car companies are the ones who have made such bad business decisions over the years. THEY agreed to the contracts, including the promise of future payments in exchange for lower wage increases at the time.

They should stand up and keep their promises to the workers, OR, retroactively pay the workers all the monies that had been deferred into the future payment plans such as retirement medical and such...with the appropriate amount of interest.

The works made a bad investment and now it is time for them to take their losses.

 

[boomerang]

Originally posted by: bamx2
No sympathy for the Big 3 or UAW from me .

Writing your congress people might help stop (or at least add strings) the loans.


http://globaleconomicanalysis....stop-auto-bailout.html

Fixed it for you.

 

[boomerang]

Originally posted by: smack Down

Originally posted by: BoomerD
The automakers saw the payments to the pension and retirees plans as a good thing years ago, because it represented money they didn't have to pay in wages at the time.
Consider that the autoworkers took parts of the raises they were scheduled to receive and put those monies into retirement packages instead of opting to have it on their paychecks.

Now, all of a sudden, it's the autoworker's fault that GM and the others are in trouble?

I don't think so. The car companies are the ones who have made such bad business decisions over the years. THEY agreed to the contracts, including the promise of future payments in exchange for lower wage increases at the time.

They should stand up and keep their promises to the workers, OR, retroactively pay the workers all the monies that had been deferred into the future payment plans such as retirement medical and such...with the appropriate amount of interest.

The works made a bad investment and now it is time for them to take their losses.

No loss. The pensions get paid by the company or they get paid by the PBGC. The PBGC is underfunded and will need a taxpayer bailout to cover the pensions. The GM pension fund is over funded right now. Take your pick which one you want to cover the costs. An unbiased pick if it all possible.

Pensions are not the norm nowadays. That doesn't mean that those that worked for decades under the assumption they would get one should be thrown to the lions. BoomerD summed it up very nicely.

The rules don't need to be changed to meet out what the new generation deems to be justice. You take away the pensions of these tens of thousands of people and you will be supporting them in one form or another through your tax dollars. Surely you can see that - can't you?

 

[Jhhnn]

Big management exploits defined benefit pension plans when they control the plans. In years when the values of the plan's investments are up, federal accounting rules allow them to not contribute, or to contribute less. Contractual terms limit their contributions in years when asset values fall. When in control, they can also allocate plan resources to benefit themselves, investing in other entities tied financially to the upper management and BOD, whether that actually benefits the plan or not.

They can also use pension promises to violate the principles of good faith in bargaining. Execs can promise the moon for pensions, knowing full well that they'll be long gone, bonused into wealthy retirement, when their successors can't deliver. They can also manipulate plan asset statements to make it appear that the plan is capable of supporting higher benefits for people who retire when the management wants to reduce the workforce- they make early retirement attractive, even if the plan won't support it in the long run.

401K plans often aren't any better. Managing pension plans is a full time occupation for highly educated people who do it all the time- the notion that individuals can do better as uneducated market outsiders on a very part-time basis is absurd, particularly when they're being eaten alive by a huge variety of fees, both hidden and obvious...

The best pension plans are independently administered, having both defined contribution and defined benefit elements. Just like unions themselves, workers gain strength if they band together in terms of their pensions, move the money at least partially out of management control...

 

[smack Down]

Originally posted by: boomerang

Originally posted by: smack Down

Originally posted by: BoomerD
The automakers saw the payments to the pension and retirees plans as a good thing years ago, because it represented money they didn't have to pay in wages at the time.
Consider that the autoworkers took parts of the raises they were scheduled to receive and put those monies into retirement packages instead of opting to have it on their paychecks.

Now, all of a sudden, it's the autoworker's fault that GM and the others are in trouble?

I don't think so. The car companies are the ones who have made such bad business decisions over the years. THEY agreed to the contracts, including the promise of future payments in exchange for lower wage increases at the time.

They should stand up and keep their promises to the workers, OR, retroactively pay the workers all the monies that had been deferred into the future payment plans such as retirement medical and such...with the appropriate amount of interest.

The works made a bad investment and now it is time for them to take their losses.

No loss. The pensions get paid by the company or they get paid by the PBGC. The PBGC is underfunded and will need a taxpayer bailout to cover the pensions. The GM pension fund is over funded right now. Take your pick which one you want to cover the costs. An unbiased pick if it all possible.

Pensions are not the norm nowadays. That doesn't mean that those that worked for decades under the assumption they would get one should be thrown to the lions. BoomerD summed it up very nicely.

The rules don't need to be changed to meet out what the new generation deems to be justice. You take away the pensions of these tens of thousands of people and you will be supporting them in one form or another through your tax dollars. Surely you can see that - can't you?

Good luck getting the bail out of the pension fund funded. I'm sure when 90% of the population is seeing their 401k disappear they are not going to support greedy autoworkers.

 

[BrownTown]

Like many have said you have to consider the benefits and such which are top notch. Either way, they make more many and have better benefits than me and I have a college degree.

 

[BoomerD]

Originally posted by: BrownTown
Like many have said you have to consider the benefits and such which are top notch. Either way, they make more many and have better benefits than me and I have a college degree.

You say that like you think the college degree makes you special or better than them.

 

[LumbergTech]

Originally posted by: BoomerD

Originally posted by: BrownTown
Like many have said you have to consider the benefits and such which are top notch. Either way, they make more many and have better benefits than me and I have a college degree.

You say that like you think the college degree makes you special or better than them.

Bill gates dropped out to create microsoft.

 

[NeoV]

on average, UAW workers are paid a lot of money, in salary and benefits, for jobs that - for the most part - aren't particularly difficult or physically demanding

usually people with college degrees have jobs that are higher paying than people that don't have degrees - this doesn't make one 'better' than anyone, it just makes them higher-paid.

 

[BoomerD]

Originally posted by: NeoV
on average, UAW workers are paid a lot of money, in salary and benefits, for jobs that - for the most part - aren't particularly difficult or physically demanding

usually people with college degrees have jobs that are higher paying than people that don't have degrees - this doesn't make one 'better' than anyone, it just makes them higher-paid.

While that is sometimes the case, it's not always true...and far too often, people flaunt the college degree like it makes them better than some mook digging a ditch...and makes $60K or more doing it.

 

[glenn1]

It doesn't really matter whether you believe the figure is $28 or $70. Either way, they're above what is sustainable to ensure the next generation of jobs gets created. We could have "thinned the herd" a few years ago, but instead starvation will bring the population back into harmony with its environment. Or if you prefer, car manufacturing in this country (and the UAW along with it) are like the dinosaurs who grew too large for their environment and were goners once the asteroid hit, and will join the dodo bird and sabre-tooth tiger in extinction.

 

[babylon5]

Originally posted by: BoomerD

While that is sometimes the case, it's not always true...and far too often, people flaunt the college degree like it makes them better than some mook digging a ditch...and makes $60K or more doing it.

I think you're overgeneralizing people with college degree.

I don't know anyone or read about anyone with college degree flaunting it and think it makes them better.

 

[BoomerD]

Actually, if the automakers would get their collective heads out of their asses and build the fuel efficient cars that most people want, they'd sell more cars...and aleviate much of the problems facing them today.
They have the ability (and well-trained workforce) to build quality cars, now then need to build more desirable cars.

 

[babylon5]

Originally posted by: glenn1
It doesn't really matter whether you believe the figure is $28 or $70. Either way, they're above what is sustainable to ensure the next generation of jobs gets created.

Another sign is, we live in the age of cheap wages = good. Some Americans celebrate illegals driving down wages.

 

[Steeplerot]

Originally posted by: babylon5

Originally posted by: glenn1
It doesn't really matter whether you believe the figure is $28 or $70. Either way, they're above what is sustainable to ensure the next generation of jobs gets created.

Another sign is, we live in the age of cheap wages = good. Some Americans celebrate illegals driving down wages.

I have never met anyone who celebrates such a thing, if they are going to stay (which obviously sooner or later they are and people will have to accept it) they should be the first ones in line to be in unions. This is what the unions are for really.
We get accountability for them through union membership and keep them from being taken advantage of (which would keep our wages from going through the floor).
Just a thought, but I have never heard this argument before, sounds like a major strawman.
(Like most of the anti-Mexican arguments)