Striking Auto Workers Condemn “Greed”

On September 15 the United Auto Workers (UAW) went on strike against all three major automakers.  Union chief Shawn Fain said it was necessary because of “corporate greed.”  Their employers, he claims, are keeping too much of the profit all to themselves.  Vermont Senator Bernie Sanders has also joined the anti-greed chorus.

Now, your favorite blogger hates “greed” as much as anyone; but the word needs some clarification.  “Greed” implies coercion, fraud, or dishonesty.  If the auto workers’ employers were defrauding them or shorting their paychecks or threatening violence or something, then the workers would have a legitimate gripe.  But my understanding is that this is not the case at all (more on this later).

Invest here to share the profits.

The workers are screaming that, since business profits are way up, that they’re getting cheated.  Evidently no one explained how “investment” works.  If one invests in a business and it makes a profit, then the investor earns money.  And if the business loses money, the investor loses money.  The easy way, then, to share in the bountiful profits would be to simply buy Ford, GM, or Toyota stock.  That’s where the money is!  But now the workers who didn’t buy stock are screaming for some investment income.

Another option to make the big bucks.

Alternatively, they could have become part of the management team, rather than spend their career as an assembly-line worker.  Better yet, become the Head Honcho: Ford CEO Jim Farley made $21 Million last year.  Now that’s where the money is! 

What if one asked the assembly-line worker why he/she is not striving to climb up the corporate ladder?  The answer might be along the lines of:  “I don’t wanna be no **** manager!”  So - you want the money, but are unwilling to do the work?  Or maybe:  “Not everybody can be a manager or CEO!”  So you admit that being a manager or CEO requires a higher intelligence level?  Or maybe:  “I like my job, working the assembly line!”  Ok, so you voluntarily chose this career, knowing full well it doesn’t pay much.

Speaking of which, how much do auto factory workers make?  Average pay is currently about $33/hour.  Um ... sorry, but that is not bad pay!  Especially for a job that doesn’t require a college degree or other fancy credentials. 

And now the Union wants a 40% pay raise.  And pension.  And to only work 32 hours a week but get paid for 40 hours. 

Yeah, the word “greed” definitely applies here.

And then there’s all the collateral damage this strike will do to their employers, the community, and all the upstream and downstream businesses that support the auto industry and its employees, and ultimately the national economy.  The word “racketeering” also applies.

Auto workers’ self-image.

Union members like to view themselves as poverty-stricken victims.  But the festive atmosphere surrounding the picket lines is not helping their cause.  As I watch the news and observe all the partying and celebrating among the strikers, it’s rather difficult to feel sympathy.

The companies, however, should have realized that paying their CEOs 8-digit salaries was bound to create bigtime public relations problems, not to mention stir up resentment down in the lower ranks.  It seems that paying the CEO a mere 7-digit salary would still attract big talent, avoid potential labor problems, and save the company a pile of money, to boot.

Now let’s talk about worker “rights”.  Yes, workers should have a right to join a union, and strike.  Similarly, workers should have a right to not join a union and not strike, if they so choose.  On the other side, employers have a right to negotiate with a union, or to not negotiate with a union, if they so choose.  Thus in a truly free market, if workers refuse to show up for work, the company should fire them and hire someone who will work.  End of story.  But of course the government has to stick its nose into this otherwise private arrangement.  According to the National Labor Relations Act of 1935, firing or “discriminating” against strikers is a crime, subject to fines and/or imprisonment.  What could possibly go wrong?!?

Wait, it get’s worse:  in New York and New Jersey, striking workers can claim unemployment pay (!)  At taxpayer (i.e. working people) expense, of course.

Now, in all fairness, employers have a lot of governmental help on their side too, all of which has the effect of stifling job growth and labor demand.  This includes subsidies, bailouts, and special laws designed to discourage startups and minimize competition.  And the governmental pressure to force electric vehicles (EVs) on us all doesn’t help, because manufacturing an EV requires less labor.

But at least the UAW members work for private entities.  There is somewhat of an understanding that, in the private market, if the employer goes bankrupt, then everybody loses their jobs.  But at the other end of the spectrum are the public sector unions.  There, “bankruptcy” does not apply, and pro-union advocates sit on both sides of the bargaining table.  These greedy labor unions can thus demand, and get, whatever they want.

Paycheck deductions.

Now let’s back up and take closer look at a typical worker’s paycheck stub.  If that’s you, then you may notice some deductions from your pay that you did not agree to.  Those are taxes.  Your employer must deduct them and account for them, but does not get to keep them.  So if you’re really looking for the bad guy here, it’s the Bernie Sanders’ of the world.  The positive numbers (in black ink) on your paycheck come from the employer.  The negative numbers (in red ink) come from the government.  Keep that in mind next time someone throws around the word “greed”.