Sunday, November 21, 2010

From the Indignity of Labor Dept.: To the oligarchy, "American workers are less than nothing" (Ian Welsh)


The oligarchy takes care of its own: As Senator Blanche heads off into the post-senatorial sunset, don't think her loyal soldiering against card check will be forgotten by her oligarchical masters, whose motto is, "We take care of our own."

"[T]he oligarchy's overall goal is to crush wages and benefits, both to pay for their bailouts and as a permanent, long-running goal. They do not really believe that domestic consumer demand is necessary to their own prosperity, and prefer workers who are in permanent debt-slavery. For a generation and a half now they have made most of their money through leveraged financial games, asset bubbles and by offshoring and outsourcing jobs. American workers are nothing to them, less than nothing"
-- Ian Welsh, in the blogpost "Labor accepting permanent defeat?"

by Ken

Ian is referring to a NYT report from Milwaukee by Louis Uchitelle, "Unions Yield on Wage Scales to Preserve Jobs."
MILWAUKEE -- Organized labor appears to be losing an important battle in the Great Recession.

Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.

In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.

Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.

Though union officials said they could not readily supply data on the practice, managers have been trying to achieve this for 30 years, with limited results. The recent auto crisis brought a two-tier system to General Motors and Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in 2006, signed such a contract with the United Automobile Workers.

The arrangement was a fairly common means of shrinking labor costs in the recession of the early 1980s. At the end of the contracts, however, wages generally snapped back up to a single tier. At G.M., Chrysler, Delphi and Caterpillar, the wages will not be snapping back.

Nor will that happen for workers at three big manufacturers here in southeastern Wisconsin -- where 15 percent of the work force is in manufacturing, a bigger proportion than any other state. These employers -- Harley-Davidson, Mercury Marine and Kohler -- have all but succeeded in the last year or so in erecting two-tier systems that could last well into a recovery.

"This is absolutely a surrender for labor," said Mike Masik Sr., the union leader at Harley-Davidson, the motorcycle maker, not even trying to paper over the defeat. His union recently accepted a new contract that freezes wages for existing workers for most of its seven years, lowers pay for new hires, dilutes benefits and brings temporary workers to the assembly line at even lower pay and no benefits whenever there is a rise in demand for Harley's roaring bikes. . . .

As Uchitelle notes, two-tiered wage scales, a healthy step toward the final neutering of labor unions, have been a dream of the corporate masters for decades. Now, under cover of economic catastrophe, the corporate titans not only are getting rich but are ticking off another item on their "Chokehold Control of American Life" Wish List.
"Management clearly has the upper hand in negotiations because of the employment situation," Milwaukee's mayor, Tom Barrett, said.

Mr. Barrett ran as the Democratic candidate for governor in the Nov. 2 election, losing to Scott Walker, a Republican in a state that usually votes Democratic. In interviews, several blue-collar workers said they had voted Democratic in 2008 and switched to Republican this time -- mimicking the blue-collar political shift throughout the Midwest -- because the Obama administration, in their view, had failed so far to help them.

The breakthrough labor agreements reflect this antipathy. They capitalize on a particularly difficult set of circumstances for blue-collar workers. In response to falling demand, the big manufacturers here have cut production and laid off thousands of employees. Many people lost jobs that had paid $22 an hour or more. Few can get work that pays as well, if they can get steady work at all, given an unemployment rate of nearly 8 percent in the area. That makes holding a job a higher priority than holding the line on pay and benefits, much less pushing for improvements, Mr. Masik said.

Increasing the pressure, Harley-Davidson and Mercury Marine, a unit of the Brunswick Corporation, publicly declared that they would move factory operations to lower-cost American cities -- Stillwater, Okla., for example, or Kansas City, Mo. -- if the unions failed to accept the concessions set forth in remarkably similar contracts. One provision denies laid-off or furloughed workers their old pay if they are called back; they must return as second-tier employees, earning $5 to $15 an hour less.

Mercury Marine's nearly 900 hourly workers voted last fall to reject such terms, but a few days later, they voted again and accepted them. They reversed course after the company announced that its headquarters factory, in nearby Fond du Lac, would be closed and operations consolidated in Stillwater. The Stillwater factory is now being closed instead. . . .

Of course on the front lines it's not the corporate titans waging battle.
The Milwaukee agreement, recently ratified, will shrink the full-time payroll to 900 from 1,250 today and more than 1,600 before the recession. Up to 250 "casuals," as in York, will be used to handle surges in demand for Harley bikes. While hourly pay under the current contract averages $31 an hour, that drops to $25 for the second tier, which becomes the only tier once all the veterans have left or retired. Casuals, in contrast, get $18.50 an hour.

The new Milwaukee contract kicks in when the current agreement expires on March 31, 2012. The union balked at negotiating so far in advance, Mr. Masik said, but conceded after the company insisted it would otherwise use the intervening months to prepare to move operations elsewhere, perhaps Kansas City. To guarantee support, Harley also incorporated into the contract $12,000 bonuses for its steelworkers, including those laid off.

Harley's president said the recession left no choice but to reorganize. Motorcycle sales are down 40 percent from their peak in 2006, Mr. Levatich said. Cutting the core staff allows Harley to slow the line during the winter months of lean demand and add "casuals" when demand picks up in the spring and summer.

"What we are doing is not mean-spirited," Mr. Levatich insisted. "We have to retool if we want to survive. We should have started doing this, in small steps, 20 years ago."

But once the principle takes hold, but it's not hard to see what the labor-management situation will look like when the dust settles.

Here's Ian's take:
Solidarity is the first rule of unions. If you sell anyone down the river, you weaken yourself fatally.

On a larger scale, the destruction of unions remains job #1 of the oligarchy, especially that part of the oligarchy which prefers Republicans to Democrats. Why?

* Because union members vote Democratic, even if they are part of a demographic which normally vote Republican.

* Because the oligarchy's overall goal is to crush wages and benefits, both to pay for their bailouts and as a permanent, long-running goal. They do not really believe that domestic consumer demand is necessary to their own prosperity, and prefer workers who are in permanent debt-slavery. For a generation and a half now they have made most of their money through leveraged financial games, asset bubbles and by offshoring and outsourcing jobs. American workers are nothing to them, less than nothing.

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At 11:07 PM, Blogger Bula said...

Mercury started it, Harley saw how well it worked, and now Kohler.


Aren't there laws against that?

The reason it worked was Kenosha's Jeep engine plant was closed, laying off 900 workers, and the Janesville GM plant was closed laying off 2000 workers.

The corporate masters smelled blood in the water.....

At 8:52 AM, Blogger Eddie C said...

We Union workers don't vote Democrat as much as we used to. Of course union management recognizes the lesser of two evils but workers are sick of hearing promises broken and filled with revenge.

Think of Labor Day when a president goes to Milwaukee and speaks in front of a crowd that was half the size of when he was a candidate. Offering road building platitudes and not even able to utter his 2008 campaign promise "Employees Free Choice Act" Richard Trumka might still be able to say "Vote Democrat." But the workers listening to a president who thinks the only problem with education is Union workers and Democratic governors pushing this "tiered system" across the nation in state governments, they want to see some action behind Democratic talking points that never seem to go beyond mutterings on C-SPAN and campaign letters to union workers.

Russ Feingold was wise to be on the other side of the state when Obama made his Labor Day speech but it wasn't good enough. After looking how Union workers voted in Pennsylvania, Joe Sestak can thank Obama for losing.

Seriously Obama waited until after Chief Justice John Roberts publicly embarrassed him before making a recess appointment of Craig Becker just because Becker once came out in favor of EFCA.

And when that 40% excise tax on union and state workers kicks in it will become the exile for elected Dems. The only thing is there is no other choice, the Democrats who hate us or the Republicans who hate us more.

Well 1994 was bad and this last election was a clear message to Dems from workers but the Dems will find another excuse besides the obvious.

At 10:31 AM, Anonymous Anonymous said...

Yeah, Dems are trying to lose all their core constituencies,and doing a damn good job of it.



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