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Labor Unions’ Last Stand

By Shlomo Maital

   Some 50,000 General Motors workers, members of the UAW United Auto Workers, are striking; the strike is over 3 weeks old, and each side has now hardened its position.

   Strikes were quite rare for two decades or more in the US. But last year, half a million workers went on strike. So – what is going on?

     GM workers face a bleak future. Car producers are shifting to electric vehicles (including in China) and producing those takes far fewer workers. Moreover, car production today is highly roboticized.  GM, which was bailed out by the US government during the 2008 financial crisis, is now highly profitable; but it has no intention of getting locked into an expensive labor contract, when it plans to shed thousands of workers and close plants.

     In the 1950’s a third of all workers belonged to unions, in the US. Today it is just about one in ten. As manufacturing migrated to Asia, and services dominated, unions shrank. Service jobs are mostly non-union. Moreover, employers switched to hiring temporary or contract workers, who have no social or pension rights, to cut costs. Google, for instance, employs more such ‘temps’ than regular employees. (Recently, a group of Google contract workers in Pittsburgh organized themselves into a union – a trend that may spread).

     GM workers get minimal strike pay – but they are determined. So is GM. In a global economy, GM can produce anywhere – in Mexico, or even in China. So labor has become a commodity whose price is cheap and getting cheaper at times. This has devastated the middle class, where once UAW jobs paid $24 an hour and more. Those jobs are disappearing.

     The impoverishment and commoditization of labor in the US– one of the negative consequences of globalization – have been largely ignored, even by Obama and the Democrats.    One result, I believe, was Trump’s election. Trump’s promise to bring manufacturing back to the US is utterly empty. But his voters, blue collar workers, choose to vote for someone who voices their pain, even if they know his promises are utterly hollow.

   At the Battle of the Little Bighorn, Custer’s last stand, the Lakota, Cheyenne and Arapaho tribes defeated the US Army’s 7th Cavalry. The underdogs won.

     I’m afraid that in the UAW’s last stand against GM, the labor underdogs will lose. And the only Democrat presidential candidate who seems to notice is the dark horse candidate Andrew Yang, who wants to pay workers a guaranteed income. Sooner or later, we may all come to realize that there is no other choice.

 

      

 

 

 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
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