United Automobile Workers of America (UAW)

gagrice

I think this reflects the militants working at Ford. They have the belief they are indispensable. They may get a reality check very soon. Same may go for the UAW folks at Kohler.

A billboard on South Business Drive encourages people to apply for jobs at Kohler in the midst of the first labor strike at the company since 1983.




http://www.sheboyganpress.com/story/news/2015/11/18/police-tackle-traffic-noise-kohler-strike/76006052/

Mr_Shiftright

Yeah, we wouldn't want anyonethere making too much money. Better to just let corporations look out for your welfare. They're very kind you know.

gagrice

Mr_Shiftright said:

Yeah, we wouldn't want anyonethere making too much money. Better to just let corporations look out for your welfare. They're very kind you know.

I don't see it as the Companies responsibility to look out for anyone's welfare but the stockholder's . When you have way more workers than jobs, as we have in the USA, their value goes down. The golden years in the 1950s and 60s were that because there was a shortage of workers. Also Ike ran most of the illegal immigrants out of the country. The Federal government's open border policy has hurt the workers more than anything else. Well also cheap labor abroad. Again the Feds could level that playing field with tariffs on foreign made goods.

Mr_Shiftright

Skilled, healthy, well-paid, educated workers make for a great nation. If a government won't help you, why have a government? I suppose a union worker could say the same thing actually--lol!

Ike didn't run illegals out of the country...he just shooed them, put a few thousand on buses, declared our borders secured, and then the millions of them who scattered and hid, just came right back in (obviously).

And it's not an "open border"...it's just a monstrously large one.

If there were no jobs, no illegals would come here. So apparently there's plenty for them to do.

stever

Some would say that a well trained and paid workforce that doesn't jump ship at the drop of a hat after they've been trained is a benefit to the stockholders.

Of course, you don't have to have a union to achieve that.

Mr_Shiftright

For many years, GM could have paid the workers nothing and still have lost money. Now they're making money. They can afford to pay well, unless their goal is to be the Walmart of automakers, with all the outstanding quality and customer service that implies.

stever

Hm, that may not be the best comparison. I suppose there are regional variations, but I shop Wally all the time and when I do return something, the lines are short and there's no return hassle.

Everyone blames the big box stores on running the mom & pops out of business, but they charged too much and would never take anything back. And I doubt that most of them paid their help much.

berri

Bottom Line - The UAW wants a big increase over the transplants. That's not a good financial move for Ford or GM who is in a similar situation. I think the companies need to pointedly make it clear to workers the differences in compensation packages they seem to think they are owed v the transplants (competitors), while at the same time make it clear the only way the companies can even possibly accede to those demands is to withdraw any investment or job security concessions that they have previously offered. At the same time they might want to consider bringing up how the UAW forced Caterpillar to seek new workers when they walked out with unreasonable economic demands in the past, as well as forcing Caterpillar to stop construction of a large, new plant in Illinois. Incidentally, Cat still has the partially constructed plant sitting there the last I saw as a reminder. I hate to see it, but the companies might want to start looking at the feasibility of moving some truck out of country. These UAW tactics are part of what caused the existence crisis to Detroit not all that long ago. Accepting it again is simply a ticket to Detroit getting smaller or going out of business down the road. Meanwhile Ford and GM need to start considering the militancy in their respective Missouri plants, and elsewhere where applicable, as a sign they need to be divested down the road.

As for consumers, might be time to be careful with UAW made vehicles. Labor unrest isn't always good for the product they are assembling, at least that has been my experience.

tlong

Mr_Shiftright said:

For many years, GM could have paid the workers nothing and still have lost money. Now they're making money. They can afford to pay well, unless their goal is to be the Walmart of automakers, with all the outstanding quality and customer service that implies.

Uh, I thought they've been the Walmart of automakers for some time, certainly in their smaller and midsized cars. If anything they've become a bit less Walmart in the past few years.

Mr_Shiftright

Well perhaps some people believe the tragic play acting of the automakers about how broke they are and how the unions are killing them but I certainly don't, and I'm sure the UAW doesn't, because they know a good deal about the finances of the company they work for. The agonies of Detroit and the American auto industry were so complex and convoluted that blaming the unions in total  for their distress is in my opinion facile to a fault. 

In any event, union power is declining rapidly. The UAW only makes 54% of the cars and trucks in America now and in the future will be a minority player in the industry

berri

I'll agree the UAW is certainly not Detroit's only problem. However, I don't see how they can agree to 10-20% long term higher compensation costs the UAW wants compared to the transplants. They don't have anything going for them to charge a premium long term over the Toyota's, Honda's, etc. made in the US, which means they'll likely end up down the road right back where they were before, having to cut corners to make margin, and spending on workers taking away from development dollars. Gas prices will go up at some point and trucks sales will flatten or decrease just like previous history. If the UAW wants this big compensation premium, then they should take a correspondingly large chunk of it in variable pay tied to company performance (and I'm talking much more than the annual bonus money they get). Otherwise, GM and Ford have a responsibility to their stockholders to either play hardball like Caterpillar has mostly successfully done, move operations to right to work states which will likely weaken the UAW over time, or let the UAW contracts expire and replace the uncompetitive priced workers (I don't think that will be a huge problem and they will probably be ahead for it in less than two years and forever thereafter). I just don't see what UAW workers do that makes them worth this large premium over comparable jobs in other industries (and in my experiences it certainly is not in assembly quality or efficiencies).

I suppose one can argue that the UAW workers will spend this extra money in the economy, except the flaw to that logic is that the industry will have to cut vendor and subcontractor costs which will correspondingly lower discretionary spending in their locales. So it likely won't really pump up the overall American economy.

Now as for Walmart, they get slammed because they are big. But in fact, their employees are treated as well or better than other retailers like Macy's. Retail has always been a part time worker focused industry requiring lower level skills. You can mandate raising the minimum wage to $15/hr such as places like Seattle are doing. It sounds good. But the likely result will be a combination of reduced hours, lower staffing levels, and price hikes to consumers. Maybe not quite a zero sum game, but over time probably fairly close. Another political charade.

fintail

Funny - the biggest two groups of union haters/bashers I seem to notice are retired union members, and those in the public sector (active or retired, with or without a union, as so much of even non-union public sector now receives bennies that make union abuses look like a kindergarten play). It's as if some don't want the socio-economic (that being first class citizenry) competition.

I'm now in a place where unions are huge, and it hasn't fallen apart yet. Maybe better engineers, and not so many cereal box MBA trash messing things up in the name of short term unsustainable profit.

Mr_Shiftright said:

Yeah, we wouldn't want anyonethere making too much money. Better to just let corporations look out for your welfare. They're very kind you know.

gagrice

Mr_Shiftright said:

Well perhaps some people believe the tragic play acting of the automakers about how broke they are and how the unions are killing them but I certainly don't, and I'm sure the UAW doesn't, because they know a good deal about the finances of the company they work for. The agonies of Detroit and the American auto industry were so complex and convoluted that blaming the unions in total  for their distress is in my opinion facile to a fault. 

In any event, union power is declining rapidly. The UAW only makes 54% of the cars and trucks in America now and in the future will be a minority player in the industry

GM was bleeding red ink in 1998 when the UAW went on strike. They never recovered from the strike that eventually led to their bankruptcy. I know the UAW does not like the fact that there are legacy costs that are considered part of the labor cost. It is still a fact that far more workers are retired than still working. Yes, much of the blame falls on management way back signing onto the Pension Ponzi scheme. Sadly the tax payers got stuck with $27 billion gift to the UAW retirees. I would bet if our Teamster pension fund went into default I would not get the same gift from the tax payers.

berri

The current administration gave the UAW some huge breaks in the GM bankruptcy. They were spared from a lot of what most employees incurred from BK at their companies. It was paid for by screwing over debt and bondholders in a manner that thoroughly ignored BK precedence. I think this has led to the UAW members feeling empowered to get more special treatment. I don't see this current negotiation as a social matter. It is more the reality that wage systems that get out of equilibrium tend to go back there at some point, meaning that Ford and GM will be further hampered competing with transplants. D3 already has generally smaller margins and primarily gets by through its dominance in trucks. Eventually that model is going to fall apart and the result best case will be plant closures and layoffs, but given the high fixed cost nature of the industry, more likely it will end up another bailout or BK if GM and Ford cave to the additional membership demands. Won't likely happen in the next few years with high sales demand and low gas prices, but it will happen down the road. We've been through this before. A manufacturer with significantly higher cost structure and no unique or special product or market advantages becomes endangered over time.

berri

Fin, I haven't seen that generalization in people who are sick of the UAW. If it can even be generalized, I think it is more people who resent their special handling in America compared to most (same as resentment toward Wall Street) or have experienced first hand the results of their assembly work.

gagrice

stever said:

Hm, that may not be the best comparison. I suppose there are regional variations, but I shop Wally all the time and when I do return something, the lines are short and there's no return hassle.

Everyone blames the big box stores on running the mom & pops out of business, but they charged too much and would never take anything back. And I doubt that most of them paid their help much.

I would say generally WM treats their workers as well or better than many M&P stores. The shop manager at our local WM, worked for Target before joining WM. Says they are far better to work for than Target was. The $billionaire owners of Target stores shut down 135 Canadian stores putting thousands out of work. I would assume that Target does not get the negative publicity because of family politics.

Big box stores can pay higher wages than small businesses. That is the reason the higher the MW, the less competition. Read about a book store in San Francisco and the impact of higher MW on his business.

Nor could he raise book prices, the way a restaurant might hike menu prices or a clothing store might raise the prices of dresses; people expect to pay the price that is printed on a book cover, and, while he could charge more, he didn’t think that would go over well.

http://www.newyorker.com/business/currency/minimum-wage-dilemma-san-francisco

Mr_Shiftright

Walmart was voted among the ten most hated companies in America, as per the Wall St. 24/7. GM also made the list. I doubt either one is a paragon of virtue to be emulated.

robr2

I think you've got it backwards. There are no billionaire owners of Target. It's a public company with the 88% of the shareholders being institutional investors. It's Wal-Mart that is family held as it is 51% held by insiders and individuals.

Mr_Shiftright

Oh right, a bookstore closed because of minimum wage hikes----of course it has nothing to do with Amazon.com, Kindle readers, enormously greedy SF landlords, and a growing American illiteracy. That's nothing compared to being crushed by the enormous payroll increases of your 5 employees. GIMME A BREAK--my BS detector just went off.

That article is a perfect example of a simplistic answer to a complex issue.

berri

I think a couple of factors are in play here. Just like the changes from agrarian to industrial going into the 20th century, a sea change is occurring in the new 21st century. The web is totally revising how business is done in many areas. I'd wager that Amazon is hurting the small mom & pop businesses more than Walmart or Target. Those small businesses are going to have to offer something unique or link in if they are going to survive. Earlier, big box stores drove many department store chains out of business as well. Meanwhile, our government has been looking the other way with all of these big mergers that reduce competition. Those mega mergers reduce corporate overhead and (sometimes) create cost efficiencies. But they also push competitive industries into oligopoly where now restricted competition pushes up prices for the buyer and beats down on vendors passing costs to the big merged company. And these changes aren't restricted to the US. They are occurring throughout Europe and Asia as well.

stever

Now that all the indy bookstores have mostly folded, Amazon has raised their book prices. I mostly d/l stuff from the library.

The UAW has lost control of social media this time around and both the Ford and GM contracts are in trouble.

Socialist media 'forcibly ejected' from UAW press conference in Dearborn (mlive.com)

GM is still a buy, per TheStreet.

berri

The UAW has lost control of social media this time around and both the Ford and GM contracts are in trouble.

...and that's why Ford and GM are going to have to get a pair and play back with some hardball this time.

Mr_Shiftright

I wish media would stop using the term "RE-distribution of wealth", as if the initial distribution was somehow fair and just. If the CEOs can getg "fat" in good times, and the stockholders can get "fat" by basically doing nothing at all, why can't the workers get "fat" by having a bigger cut of the pie? In the reverse scenario, when times are lean, the CEOs lose nothing, the stockholders go back, at worst, to baseline break-even, and the workers get hosed. Why can't we distribute profit and loss on a more equitable basis? We all get a fair profit, we all take a fair "hit". What man on earth "needs" a 150 million dollar pension plan?

marsha7

"Everyone blames the big box stores on running the mom & pops out of business, but they charged too much and would never take anything back. And I doubt that most of them paid their help much.

I gave you my dissertation on Big Box vs Mom and Pop (M&P) stores a few years ago...Mom and Pop, frankly, raped us for years, while they sat there behind their horn-rimmed glasses looking like innocent Grandma and Grandpa...my local hardware store, run by Pop in my little Georgia town (1990s) charged my $16.50 per bulb for U-shaped fluorescent bulbs...driving 35-40 miles, to a Home Depot, and I bought bulbs for $5.50...10 bulbs cost $55.50 plus tax, around $60.00, and the same 10 bulbs from Pop would have been about $175.00 out the door...10 bulbs and I saved over $100.00, easily worth my time (perusing the shelves at Home Depot was an experience), my gasoline, and extra money to take wife out to dinner, thereby increasing the revenue of the restaurant and tipping the server...frankly, the "economy" had more circulated money due to Home Depot, and Pop can, frankly, go to He**...

Let's hear it for Big Box stores, and if Mom and Pop can't compete, go sit on your rocking chair while the rest of us go save money...

stever

"Volkswagen AG’s (VLKAY - Snapshot Report) skilled trade workers will be voting on Dec 3 and Dec 4 for representation by the United Auto Workers (UAW). The National Labor Relations Board (NLRB) recently sanctioned UAW’s petition for a union vote at Volkswagen’s sole U.S. plant in Chattanooga, TN.

Previously, the German automaker was supportive of UAW. However, Volkswagen now believes that these skilled workers should not negotiate union agreements separately from the 1,200-member production team. The company does not want its workers to be segregated into different representation groups. In addition, the automaker considers that the union vote is not suitable at this time given the scandal the company is facing."

UAW Receives Approval for Labor Vote in Volkswagen Plant (zacks.com)

berri

I wish media would stop using the term "RE-distribution of wealth", as if the initial distribution was somehow fair and just. If the CEOs can getg "fat" in good times, and the stockholders can get "fat" by basically doing nothing at all, why can't the workers get "fat" by having a bigger cut of the pie? In the reverse scenario, when times are lean, the CEOs lose nothing, the stockholders go back, at worst, to baseline break-even, and the workers get hosed. Why can't we distribute profit and loss on a more equitable basis? We all get a fair profit, we all take a fair "hit". What man on earth "needs" a 150 million dollar pension plan?

Shifty, I agree that the top execs are raping the corporations, but sometimes the media overstates their income because much of that is in possible bonuses and stock profits which may or may not actually happen down the road. As for stockholders, they do take risks and aren't doing nothing. Equity is where part of the corporate funds come from and since there are no guarantees, the stockholders certainly are in a position to lose money, or even get wiped out first in a BK. They are in effect risking their assets on the company. If the markets didn't let stocks trade, then stockholders would have to cash them in instead when they wanted out, which would wreak havoc on cash flow management. I agree with you that workers should share more in the take, but that also means giving up some like everyone else in bad times. Basically, having a lower "base" salary and then a chunk of variable compensation based on company performance. The benefits would stay essentially constant, but a chunk of the salary would swing with company performance, the same as management and stockholders. I think the UAW wants all of it up front with no willingness to take any risks or put any skin in the game like most everyone else, and no recognition of the reality of transplant competition and compensation packages. That is the part that really fries me about the UAW. It's almost a welfare mentality that was only further enhanced by the way the government allowed them unusual benefits in the GM BK. If you want a chance at above "market" rates whether in investments or salary then you should take on some risk. Maybe the UAW should be offered the opportunity to either take a realistic and competitive fixed salary or a variable compensation package with the possibility of above market salary? Nah, they figure the White House will come to their aid again (even though ironically, many of the workers actually vote for the other political party) in the event of a strike...and down the road when these excesses come home to roost during a significant downturn, the UAW and D3 will demand another bailout because of all of this lack of financial prudence, but this time many of us will not support that again.

gagrice

Labor Secretary meeting with UAW in Wisconsin said this:

Perez noted that President Barack Obama's administration backs a bill in Congress that would set the federal minimum wage at $12 an hour by the year 2020.

That seems like a reasonable solution.

http://www.wpr.org/labor-secretary-talks-kohler-strike-minimum-wage-during-visit

tlong

Mr_Shiftright said:

I wish media would stop using the term "RE-distribution of wealth", as if the initial distribution was somehow fair and just. If the CEOs can getg "fat" in good times, and the stockholders can get "fat" by basically doing nothing at all, why can't the workers get "fat" by having a bigger cut of the pie? In the reverse scenario, when times are lean, the CEOs lose nothing, the stockholders go back, at worst, to baseline break-even, and the workers get hosed. Why can't we distribute profit and loss on a more equitable basis? We all get a fair profit, we all take a fair "hit". What man on earth "needs" a 150 million dollar pension plan?

Sorry but I can't agree with much of this quote.
"redistribution" IS a valid term if you are talking about where money was versus where it is going.
I don't believe it's true that CEO's don't lose anything when times are lean. Some might not, but many (probably most) CEOs are compensated by the performance of the company, so the variable portion of the compensation is drastically reduced in lean times. Have any real data to support your assertion?
Stockholders have not "done nothing at all". You don't know how their funds were generated that allowed them to purchase those shares. I know that I've busted my butt to be able to make my own stock investments, and I'll bet that's also true for many/most others.

Lots of broad generalizations in that post that sound like they are coming from the far left side of the political spectrum.

stever

This just in.

Ford workers approve UAW contract by slim margin (Detroit Free Press)

"UAW production members voted 51% in favor; skilled trades were 52% in favor and almost 92% of salaried workers voted yes."

And GM is done too:

"GM was up next and results reported Nov. 6 were split with production workers in favor but skilled workers turning it down. Under the UAW constitution, the contract could not be ratified until union leaders met with the skilled workers again to determine their issues. That led to further meetings with the company. Finally, on Friday, after a two-week delay, the GM deal was ratified."

fintail

Probably some other business model problems - looks like a very limited target demographic, and who knows what ROI he requires. Look at the overall economy where he is located - it's not faltering, although it does have the growing socio-economic gap and declining socio-economic mobility seen since things started trickling down (just like Seattle, with one of the highest in the nation).

It'd be interesting to see where minimum wage would be had it kept up with inflation from the days when the luckyboomers who built it all themselves and worked their butts off were starting out in such jobs. It'd need to be $12 at least. Oh, we wouldn't want that.

gagrice said:

http://www.newyorker.com/business/currency/minimum-wage-dilemma-san-francisco

fintail

Well, look who owns the media. It's a scare tactic. Americans need to remain able to imagine themselves as temporarily inconvenienced millionaires, it keeps any uprising at bay. Just as the ease of being tied to a mortgage keeps people from pushing back - that's one reason why that industry is coddled. Nobody wants to risk it.

Your stock line will get some kickback, but I think I see what you mean. Probably 90%+ of all similar investment vehicles are likely owned by 5% of the population - and few of them built that themselves, no matter the claims. The rest share a little of the pie and hope the casino known as 401Ks and equities enables them to not eat Whiskas in old age.

And just compare exec/CEO wages in the US to other first world nations. Some will ask for data, while failing to produce it themselves. Annd don't get started on golden parachutes, which are still a very real thing. Socialize losses, privatize profits, that's what they are paid for.

Mr_Shiftright said:

I wish media would stop using the term "RE-distribution of wealth", as if the initial distribution was somehow fair and just. If the CEOs can getg "fat" in good times, and the stockholders can get "fat" by basically doing nothing at all, why can't the workers get "fat" by having a bigger cut of the pie? In the reverse scenario, when times are lean, the CEOs lose nothing, the stockholders go back, at worst, to baseline break-even, and the workers get hosed. Why can't we distribute profit and loss on a more equitable basis? We all get a fair profit, we all take a fair "hit". What man on earth "needs" a 150 million dollar pension plan?

fintail

I meant unions in general. Just a personal anecdote, from here and elsewhere. Some of the staunchest anti-union people I have met are cops, career military, retired public sector, or people with current or past union history. It's kind of funny. I don't know where some of them think their meal ticket comes from, even if they lack a formal union.

berri said:

Fin, I haven't seen that generalization in people who are sick of the UAW. If it can even be generalized, I think it is more people who resent their special handling in America compared to most (same as resentment toward Wall Street) or have experienced first hand the results of their assembly work.

Mr_Shiftright

True, but a stockholder can bail out, or even punish a company for bad performance and a lousy product. If you are willing to grant the stockholder power, why not grant the worker some power as well? This is what the union is supposed to do. Now all this presupposes that management, workers and stockholders "play nice". if all parties merely work the system to their advantage, with no regard for compromise, it's going to get ugly.

the non-union shop we see today, with at least adequate worker compensation, was built on the backs of the union movement.

Without unions and government regulation, labor would have suffered the same nasty exploitation that it did in the dawn of the industrial revolution in the late 1800s in America.

Capitalism has undergone 11 major recessions and depressions in the last 100 years, but apparently unionism is not allowed to fail and try again?

tlong said:

Mr_Shiftright said:

I wish media would stop using the term "RE-distribution of wealth", as if the initial distribution was somehow fair and just. If the CEOs can getg "fat" in good times, and the stockholders can get "fat" by basically doing nothing at all, why can't the workers get "fat" by having a bigger cut of the pie? In the reverse scenario, when times are lean, the CEOs lose nothing, the stockholders go back, at worst, to baseline break-even, and the workers get hosed. Why can't we distribute profit and loss on a more equitable basis? We all get a fair profit, we all take a fair "hit". What man on earth "needs" a 150 million dollar pension plan?

Sorry but I can't agree with much of this quote.
"redistribution" IS a valid term if you are talking about where money was versus where it is going.
I don't believe it's true that CEO's don't lose anything when times are lean. Some might not, but many (probably most) CEOs are compensated by the performance of the company, so the variable portion of the compensation is drastically reduced in lean times. Have any real data to support your assertion?
Stockholders have not "done nothing at all". You don't know how their funds were generated that allowed them to purchase those shares. I know that I've busted my butt to be able to make my own stock investments, and I'll bet that's also true for many/most others.

Lots of broad generalizations in that post that sound like they are coming from the far left side of the political spectrum.

berri

Well Shifty, there are unions and there is the UAW. The UAW has been often given privileges compared to other unions. I'm not opposed to unions and think it would be good if there were more of them to offset greedy, wealthy CEO's. But, I am opposed to special privileges like the UAW received in the GM BK, and to the lack of a level playing field under current federal laws. Unions can pretty much strike whenever they want, but companies are very restricted on lockouts.

Mr_Shiftright

the GM BK was something of a special case, as the collapse of GM (and Chrysler) would have been an utter economic disaster, costing the government (and taxpayer) far more in social services than was paid out in relief. Plus all that, you have the resurgence of the auto industry and all the jobs it kept and added.

I know it's hard for some to accept this scenario, because we did not get to see the alternative (demolition of the US auto industry) but we have to keep in mind that along with the auto industry going down the drain, all the supplier go down with it.

We might look back to Britain when its automobile and motorcycle industries were allowed to collapse. Not only did that presage very hard economic times but also to this day that auto industry has not returned. It went elsewhere. Your Brtish cars are now mostly German, the motorcycles either gone or in India. (Triumph excepted, which now has 1,600 employees).

You know, if Walmart goes down (and it might someday) well big deal..we have all the other big box stores to fill the vacuum. Or if Whole Foods rolls over and dies (and it might), well there are myriad substitutes.

But when the Big 2 or Big 3 go down, that's it. Rebuilding Big Box infrastructure or grocery stores is a walk in the park compared to auto industry infrastructure. Just ask Tesla. Not a dime of profit to this day.

gagrice

Capitalism has undergone 11 major recessions and depressions in the last 100 years, but apparently unionism is not allowed to fail and try again?

Private Unions have failed and are failing. Especially their Pension plans. Way too many are in critically under funded condition. The only Unions not allowed to fail are the public sector Unions. Or at least the ones in CA. They continue to keep up with inflation and in general do their part to raise the COL. I am thinking about the University of CA in general terms. Of course our local school teachers that average $93,000 per year are doing quite well. When you consider the local median income where they teach is only $76k per year. Did I mention the CA Highway patrol and their union guaranteed pay and pension?

Sadly the private Unions get blamed for the public sector Unions raping of the tax payers. Here is my example and solution. If you happen to be one of the $100k per year retirees, forgive me for stepping on your toes. Three of my friends and family are in the club. I give them a bad time. Though they don't feel guilty.

It is possible to reform public employee pensions in California easily and legally – in a way which preserves existing pension benefits and makes existing pension systems solvent. How? Cap new top public employee pensions at $100,000 a year.

As high as this figure might be, the real problem in public employee pensions is the explosion in the “$100,000 Club” – the geometric acceleration of the number of public employees in the state who are retiring with pensions of $100,000 or more a year. In 2005, fewer than 2,000 retirees received pensions of $100,000 or more from the California Public Employees’ Retirement System. By 2009, there were more than 6,000. At the end of 2013, there were almost 17,000.

These 17,000 retirees alone receive more than $2 billion a year in pension benefits. By 2020, it is projected that more than 50,000 CalPers retirees will receive more than $100,000 a year in pensions, and the total cost of just these 50,000 pensions will exceed $6 billion annually.

That’s not sustainable.

http://labusinessjournal.com/news/2015/feb/09/retiring-megapensions/

berri

Detroit BK will probably become a state model down the road. I don't see how some states like Illinois are going to solve it any other way.

Mr_Shiftright

I don't see any other way to spin a bailout scenario, as the consequences would have been catastrophic. The number of people emplyed in factories, parts, suppliers, dealers, repair---it's a staggering nmber. What government in its right mind would sit back and let this happen?

gagrice

berri said:

Detroit BK will probably become a state model down the road. I don't see how some states like Illinois are going to solve it any other way.

Illinois has some serious financial problems. Chicago could be the next to fall. For 2015 pension funds in critical condition number at 202. Will the Feds give them money to avoid PBGC from being over run? Or was the UAW the darling of the Feds to bail out. And bailing out the pension plan had nothing to do with bailing out GM and C. It was purely political for Union favors to politicians.

Is your pension plan on the list? I know mine is.

http://www.dol.gov/ebsa/criticalstatusnotices.html

Mr_Shiftright

Well the pension was part of GM and Chrysler debt obligations...part of the debt package. It's not that the UAW didn't make concessions (it certainly did) but there is legitimate criticism to be made that the government didn't press the UAW hard enough.

dieselone

https://dol.gov/minwage/chart1.htm

Here's a link from the department of labor listing annual minimum wage by year since 1938 and shows the inflation adjusted amount in 2012 dollars. I averaged the inflation adjusted amount and it is $7.09/hr. Remove pre-1960 and it's $7.72 an hour. 1965 to 1975 it was $9.09.

Also for comparison, I know my grandpa was making around 11.50 an hour as a skilled union steel worker in the northern Indiana steel mills when he retired in 1979. That was 4 about 4 times the minimum wage. It's about the same today.

As for the San Fran Books store. Who knows. That place is nuts. I'm there about every 3 months for work. It's definitely an outlier when it comes to the cost of living along with the costs of running a business. Losing a bookstore isn't much of a concern;)

fintail

Of course, a lot of those "inflation" measures ignore expenses like education, housing, healthcare, etc, that have exploded since some got their foot in the door. If we want to pick and choose years to make a point, we can see from the same source that for between the mid 50s and mid 80s, it was higher than now - sometimes substantially so. Education- the ticket out of such wages, was also substantially cheaper. But I guess it is OK, as a low wage subsidizes builders and bootstrappers by outsourcing some costs to social welfare.

Pacing it with productivity is almost hilarious

The US also competes less than favorably with similar OECD economies - and socio-economic mobility has declined. Coincidence, correlation, causation, or?

Unions got a foothold because of the result of similar trends.

dieselone

I don't feel like I was cherry picking but whatever. Is the minimum wage to low? Probably.

Looking at data from when the minimum wage was higher, poverty wasn't much lower (again probably impossible to accurately compare), in fact for some demographics (like african americans and the elderly), poverty was much higher back then.

At the end of the day, comparing today to prior periods is not easy (well it's easy to misinform). To many variables and to easy to cherry pick specific areas and stats. For example there wasn't an earned income credit prior to the 1970's and effective tax rates on low earners were higher then as they are negative today for low income households.

What would make things better for low income workers? I' don't believe doubling the minimum wage will reduce poverty in a meaningful way. If it was only that easy.

gagrice

I have a friend and his son that are the perfect example of today's labor market. The 42 year old father has struggled his entire life. He now has a job driving a cement truck that pays $19 per hour after 3 years on the job.

The son went to work for Starbucks in his senior year at HS. He now makes $10.50 per hour. Gets at least 40 hours a week and going to Junior college. I have no doubt the son will be far more successful than his dad.

Dad works at the largest concrete company in San Diego. They are rabidly NON union. At orientation they emphasized that if you want to work for a union company this was not for you. He averages about 50 hours a week. Gets HC and 401K. So he is doing ok now.

Making bad decisions when you are young, is not societies fault. If you find yourself with 2 kids making MW, it is likely poor planning on your part. Raising the MW as a substitute for getting a good education is counter productive. In my 70+ years MW has NEVER been a living wage for a family.

dieselone

"MW has NEVER been a living wage for a family."

True and I don't think it should be. I've worked minimum wage jobs when I was young (and I belonged to a union to keep on topic;)). It was a huge motivator for me. I saw first hand that it wasn't a level I wanted to stay at.

I'd like to see numbers on how many earn minimum wage. Not in aggregate, but something that shows how long the average minimum wage earner stays at that level. If you're continually earning minimum wage, there likely is a reason and it's a "you" problem.

I know I'm cold hearted.

dieselone

fintail said:

I meant unions in general. Just a personal anecdote, from here and elsewhere. Some of the staunchest anti-union people I have met are cops, career military, retired public sector, or people with current or past union history. It's kind of funny. I don't know where some of them think their meal ticket comes from, even if they lack a formal union.

I've noticed this as well. To add context I think it revolves around the union's protection of losers. Like a lot of things, privileges tend to get abused.

gagrice

I've noticed this as well. To add context I think it revolves around the union's protection of losers. Like a lot of things, privileges tend to get abused.

I spent 20 of my 37 years in the Teamsters as a shop steward. We saved several people's jobs that should have ended up on the street. That is what helped the demise of Unions as much as anything. Recent example was getting those potheads at Chrysler their jobs back. Plenty of people willing to work all day without drugs or alcohol. It is endangering the people they work around.

marsha7

" If you're continually earning minimum wage, there likely is a reason and it's a "you" problem."

That sums it up right there. Newsmedia make it seem that it is cruel that you cannot support a family of 4 on minimum wage, as though that was what it was designed for...it isn't and it never was...minimum wage was designed so that employers could get unskilled employees, like putting stock on shelves, floorsweeping, and "would you like fries with that?", so that young people, often students and teens, would become part of the work force and learn ADULT responsibilities like working for a living...if you are an adult in your 40s and still have no skills so that you only qualify for WalMart floorsweeping at 3 am, then YOU have a problem, the system is fine...YOU deserve to live on next-to-nothing, because you have wasted the last 20 years of your life doing nothing to improve yourself...don't use politics to raise your earnings by force by raising the minimum wage, go out and learn something besides which end of the broom is the one that sweeps the dirt...

Placing toilet paper and paper towels on the shelves at WalMart is still only worth $3.00/hour, and that's being generous, regardless of minimum wage...just how unskilled can one get in their job duties?

fintail

The "probably" says enough for me. In the past when the lucky (I mean bootstrapping Horatio Alger types who brought us the offshoring movement and fake "free" trade) were starting out, those who now lecture about hard work and being smart, it was higher - especially compared with necessities that aren't factored into inflation numbers. At the least, it should be equalized with inflation to that era - which means at least a 25% increase from today, even if lucky ones here from second world economies like GA think differently. Actual modern areas with higher human development indices see it differently - and they now have more mobility.

Tax rates are one thing, effective taxation is another. In that era, tax rates and effective taxes for higher incomes were also much higher, and we had more socio-economic mobility to boot.

Low wages are just a subsidy to certain employers, with taxpayers making up the difference.

Protection of losers is a good point, but I am willing to wager some of those doing the protesting aren't exactly perfect themselves. They'd never give up their union, as the perks are immense. Like the CALPers - probably a lot of them whine too.

And the argument I see here about it being a living wage is a red herring, IMO. Nobody here has argued it anyway. But as it stands, the US wage is too low.

dieselone said:

I don't feel like I was cherry picking but whatever. Is the minimum wage to low? Probably.

Looking at data from when the minimum wage was higher, poverty wasn't much lower (again probably impossible to accurately compare), in fact for some demographics (like african americans and the elderly), poverty was much higher back then.

At the end of the day, comparing today to prior periods is not easy (well it's easy to misinform). To many variables and to easy to cherry pick specific areas and stats. For example there wasn't an earned income credit prior to the 1970's and effective tax rates on low earners were higher then as they are negative today for low income households.

What would make things better for low income workers? I' don't believe doubling the minimum wage will reduce poverty in a meaningful way. If it was only that easy.

gagrice

And the argument I see here about it being a living wage is a red herring, IMO. Nobody here has argued it anyway. But as it stands, the US wage is too low.

I agree overall wages have lagged. I just think trying to make MW a living wage is a mistake that will cause inflation, and cost low level jobs. With the abundance of immigrants and refugees, a young citizen is not likely to find any job. I think young black men are unemployed at over double the rest of the population.