GM is be­tray­ing the Amer­i­can worker

The Morning Call - - TOWN SQUARE - Robert Re­ich

Nearly 50,000 Gen­eral Mo­tors work­ers are on strike to get what they see as their fair share of its prof­its and stop fur­ther lay­offs. What's hap­pened to GM's work­ers is a mi­cro­cosm of what's hap­pened to the Amer­i­can worker.

In 2009, when GM was on the brink of col­lapse, United Auto Work­ers agreed to let the com­pany hire new work­ers at about half the pre­vail­ing hourly wage and with skimpier re­tire­ment ben­e­fits, hire temp work­ers at even lower rates, and out­source more jobs abroad. Amer­i­can tax­pay­ers also forked out more than $10 bil­lion to save the com­pany.

When GM went pub­lic again in 2010, it boasted to Wall Street that 43% of its cars were made out­side the United States in places where la­bor cost less than $15 an hour, while in Amer­ica it could now pay “lower-tiered” wages and ben­e­fits for new em­ploy­ees.

The cor­po­ra­tion came roar­ing back. Over the last three years it's made $35 bil­lion in North Amer­ica.

But its work­ers are still get­ting measly pay packages, and GM is still out­sourc­ing like mad.

Last year it as­signed its new Chevro­let Blazer, a sport util­ity ve­hi­cle that had been made in the United States, to a Mex­i­can plant, while an­nounc­ing it would lay off 18,000 Amer­i­can work­ers.

Ear­lier this year it shut its gi­ant plant in Lord­stown, Ohio, which Don­ald Trump had vowed to save.

GM is still get­ting cor­po­rate wel­fare — since Trump took of­fice, some $600 mil­lion in fed­eral con­tracts and $700 mil­lion in tax breaks (in­clud­ing Trump's gi­ant cor­po­rate tax cut).

Some of this largesse has gone into the pock­ets of GM ex­ec­u­tives. Chair­man and CEO Mary Barra raked in al­most $22 mil­lion in to­tal com­pen­sa­tion last year.

Last month, the Busi­ness Roundtable — a con­fab of Amer­i­can CEOs, on whose ex­ec­u­tive com­mit­tee Barra sits — pledged to com­pen­sate all em­ploy­ees “fairly” and pro­vide them “im­por­tant ben­e­fits.”

Why should any­one be­lieve them? For 40 years these CEOs have fought unions, out­sourced jobs abroad, loaded up on la­bor-re­plac­ing tech­nolo­gies without re­train­ing their work­ers, and aban­doned their com­mu­ni­ties when they could do things more cheaply else­where.

Ama­zon CEO Jeff Be­zos signed the same state­ment. Last week, Ama­zon-owned Whole Foods an­nounced it would be cut­ting med­i­cal ben­e­fits for its en­tire part-time work­force — at a to­tal sav­ings of about what Be­zos makes in two hours.

Cor­po­rate prof­its have reached record lev­els, but noth­ing has trick­led down to most work­ers.

Prof­its now con­sti­tute a larger por­tion of na­tional in­come, and wages a lower por­tion, than at any time since World War II. These prof­its are gen­er­at­ing higher share prices (fu­eled by share buy­backs) and higher ex­ec­u­tive pay, re­sult­ing in wider in­equal­ity.

The demise of unions ex­plains much of this. In the mid-1950s, over a third of all work­ers in the pri­vate sec­tor were union­ized. This gave them sub­stan­tial bar­gain­ing power to get higher wages and ben­e­fits.

To­day, just 6.4% of pri­vate-sec­tor work­ers are union­ized, elim­i­nat­ing most of that bar­gain­ing power. Re­searchers have found that be­tween 1952 and 1988, al­most all of the rise in share val­ues came as a re­sult of eco­nomic growth, but from 1989 to 2017, eco­nomic growth ac­counted for just 24% of the rise. Most of the in­crease has come from money that oth­er­wise would have gone to work­ers.

The power shift from work­ers to share­hold­ers — and con­se­quen­tially, the dra­matic widen­ing of in­equal­ity — has hap­pened far more qui­etly, but it has had a more un­for­tu­nate and more last­ing con­se­quence for the sys­tem: stag­nant wages, aban­doned com­mu­ni­ties and an an­gry work­ing class vul­ner­a­ble to dem­a­gogues.

Don­ald Trump didn't come from nowhere, but he's a fake cham­pion of the work­ing class. If he were the real thing, he'd be walk­ing the picket line with GM work­ers.

Tri­bune Con­tent Agency

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