Democrats’ liberal icon justifies wage cuts for workers, bonuses for CEOs

[Karmadillo]

Interesting analysis by the WSWS. I also linked to George McGovern's opinion piece in the LA Times for anyone who wants to see if his arguments have been misstated.

http://www.wsws.org/articles/2006/may2006/mcgo-m23.shtml

It would be hard to find more compelling evidence of the bankruptcy of Democratic Party liberalism and the fundamental hostility of this big business party to the interests of the working class than an opinion column published in Monday’s Los Angeles Times under the byline of former South Dakota Senator George McGovern.

The column, headlined “The End of More,” amounts to a brief for why American workers must accept ever-deeper cuts in their wages and benefits, and a justification for the lavish salaries and bonuses handed out to the CEOs who impose these cuts.

<edit>

His long abstention from electoral politics notwithstanding, McGovern’s remarks are of great significance for what they say about the rightward evolution of the Democratic Party over the past three decades and the social interests that this party represents and defends.

Unfortunately for McGovern—who begins his piece by proclaiming that he has “always been a supporter of the labor movement”—his argument is structured around a glaring historical error.

<edit>

The actual quote which McGovern misattributes reads: “What does labor want? We want more schoolhouses and less jails; more books and less arsenals; more learning and less vice; more leisure and less greed; more justice and less revenge; in fact, more of the opportunities to cultivate our better natures.”

<edit>

McGovern’s contention is that there is no alternative for workers but to accept the demands for sharp cuts in wages, benefits and conditions. “‘More’ has, unfortunately, become ‘too much’ in a global and far more competitive economy,” he writes.

more...

http://www.orlandosentinel.com/news/opinion/orl-mcgovern23_106may23,0,1781135.story?coll=orl-opinion-headlines

The end of 'more'

A Democratic stalwart warns that labor's old strategy can't win against a new competitive reality

I have never wavered in my support for policies that relieve poverty and improve the standard of living of American workers. As a lifelong liberal, I supported Medicare and Medicaid, civil rights, Social Security and workplace-safety requirements. Today, I strongly support universal health care.

And I have always been a supporter of the labor movement. Unions have a proud legacy of improving the lives of millions of workers over the past century.

But lately I have seen developments that have me worried. And I have been reminded of legendary union leader John L. Lewis, who was once asked what his miners were after. His answer? "More."

It was a funny answer, and perhaps it was honest, too. But these days, it's not a very effective strategy, and we are seeing some unfortunate and unintended consequences of Lewis' "more" philosophy.

Delphi Corp., the biggest auto-parts supplier in the country and the employer of 34,000 hourly workers, is bankrupt. One big reason is that the company's unionized workers earn $64 an hour in wages and benefits -- more than twice what some of its competitors pay.

more...

[partylessinOhio]

1. As a grassroots campaign worker who worked long and hard

for McGovern, I find this completely discouraging and disgusting. He is no longer a Democrat.

How can he criticize the worker for needing and wanting more for their families due to being squeezed from every direction with ever-increasing costs and prices and not criticize CEOs for taking more and more and more from those workers?

McGovern needs to just shut-up if he can't say anything nice (positive).

It is no wonder we are going to continue to lose elections.

[TheFarseer]

2. I'm just going to say

you can make a case that union demands busted GM. I don't believe factory workers making $64/hr is a model for success in any industry. Conversely, CEO salaries are way out of hand. Shame on him for not saying so. It completely defeats their stated purpose to slash worker's wages and take huge bonuses and raises. I've always thought the bosses wages should be restricted by some multiple of the median company wage. The fact is we are competing against low wage countries. That doesn't mean that everyone has to work for $5.15 an hour. There's got to be someone to BUY the cars, and no one working for $5.15/hr fits that description. I think government intervention to stop outsourcing and CEO salaries is in order.

[Bob3]

4. yeah but was everyone on the floor making $64 an hour?

People toss that number around but like the welfare queen driving the Cadillac this has the scent of urban legend or political talking point to me.

I suspect the lousy cars GM built has something to do with their problems - along with the price of gasoline which made the SUV's hard to sell.

[TheFarseer]

5. I couldn't tell you what everyone on the floor is making

it said the 'unionized' labor which leads you to believe the bulk of the workers, but you're right, there's no way of knowing. You also read about GM union workers being paid to stay home, but that turned out to be half-truth at best. A few workers were home a few days before they could figure out how to use them after the plant closed (as if that's any different than regular PTO!) and that led to that whole set of talking points. It's unfortunate that Fox and others spin everything so that you don't know what's true and what's not. There's no doubt GM has made poor business decisions and that absolutely has led to their decline.

Surely you can see that it is hard to compete with cheap Chinese labor. My whole thing is, if times are so tough, then why don't YOU take a pay cut too? How does it help to lay off 400 workers at 50k/year and give the board of directors 10 million in bonuses?

[Bob3]

8. I can see how hard it is

but we shouldn't be greasing the skids to help out companies using chinese labor. If anything they should be paying penalties. But as long as K street runs congress it ain't happening.

[Ksec]

19. I agree. You design shitty cars nobody wants and then blame the assemblers

[Norquist Nemesis]

9. Where does that $64/hour come from?

I've seen that amount (as well as $75/hour) numerous times with nothing to back up the claim. That's $133,120 annually ($64 x 2080). Honestly, does that seem realistic to you for a "factory worker"?

To me, it sounds much more plausible that the $64 rate (if true) is not a constant rate but rather double-time for working a holiday or some other reason that the contract allows as part of a benefit. And if that's the case, that "$64/hour" is just a strawman.

[LSK]

10. Rush Limbaugh and Ronald Reagon

Its right up there with welfare queens.

[Karmadillo]

11. WSWS says $27/hour, not $64. Cuts would take it down to as low as $9.50.

http://www.wsws.org/articles/2005/nov2005/delp-n01.shtml

<edit>

*A 65 percent wage cut for production workers, including a pay reduction for current workers from $27 an hour to as low as $9.50. New-hires will see starting wages lowered from $14 an hour to as low at $9 an hour.

* An end to traditional overtime pay. Overtime will no longer be paid after an eight-hour day, but only after working more than a 40-hour week. Cost-of-living adjustments and profit-sharing will be eliminated.

* A tenfold increase in out-of-pocket health care expenses for employees, including the imposition of insurance deductibles for the first time. Employee medical payments will be increased from the current $250 for an individual and $500 for a family to $2,500 and $5,000 respectively. Vision and dental insurance will be eliminated.

* The freezing of pension benefits. No new pension plan participants will be accepted after January 1. Retirement benefits will be slashed to reflect lower wage rates. Medical benefits for retirees will be eliminated.

If accepted, the company’s wage demands alone would drive thousands of Delphi workers and their families into poverty. At $9 an hour, many Delphi workers would make $18,720 a year, more than $600 below the federal poverty line for a family of four. The median household income in Michigan, home of 14,700 Delphi workers, is $44,315, according to the most recent census data.

[TheFarseer]

15. Good Call

I wonder if you are right in your speculation. I suspect you are. I have much to learn in the ways of de-coding right wing spin :) It would be interesting to hear something from Delphi workers instead of just getting one side of the story.

[mopinko]

18. $64- wage and benefits

meaning health insurance, where everyone is getting gouged, workers comp, where their own greedy practices are probably driving up the cost, fica, probably overtime, and whatever other costs go into the labor bucket.
probably half of that is in the hourly rate.

[Yollam]

13. Short-sightedness also dealt GM a big blow.

They bet the whole house on huge gas-guzzling SUVs just before gas prices made such vehicles much, much less appealing. Add to that the fact the GM has been unwilling to invest in real innovation and quality the way the Japanese companies have, and this is what you get. It's unfair to blame the worker. Japanese auto workers make almost as much as American workers, and Toyota is posting record profits...

[cascadiance]

17. Another cost factor for automakers is health care benefits...

Almost every other countries' auto manufacturers aren't burdened with this cost, when the government is the custodian of providing health care for everyone and that puts automakers here at a competitive disadvantage. In this country not only do we not cover everyone as other civilized countries do, but we also put the burden on companies and individuals to pay for this cost. Those that provide insurance basically factor that in to the cost of labor, which then in turns leads to more jobs being outsourced or fewer people being covered by health insurance here that work.

[TheFarseer]

20. Corporations don't want to pay health care

but the people that run corporations don't want to pay the taxes that would be needed to pay for health care. To them, it's either coming out of their stock options or paid out as taxes. What would really be great is if everyone were on their own for health care. That way, they could charge outrageous premiums to individuals as opposed to negotiating with another company. Rich people will presumably make up the costs of health premiums by investing in health care companies. Poorer people will just take it up the ass. Of course, you can just not get health insurance, but if you get hurt or sick, then you are working the rest of your life for a hospital or whatever, so they win in most cases.

So you see, they are better off just slowly doing away with company health care plans.

[Bob3]

3. Jesus - what the hell has everyone gone insane?

Are we tying to prove Karl Marx what right when he said that eventually the world will be divided into two classes the owners and the workers?

He speaks the truth when he says it is hard to accept lower wages when CEO's are making so much. It's damned impossible to accept - and just for the record I'm not willing to accept his damn example of the CEO of Walmart's money not being the problem - 1) there's more than one pig at that feed trough and 2) since he doesn't give hard numbers I'd suspect he was given that by a Walmart PR guy. Not the most trustworthy source (does Walmart directly employ 1,350,000 people? anybody know?).

Again I'm not sure were the 4% profit figure comes from either - I'd really like to see some damn numbers rather than be presented with the bald number that we are given. Shit you can prove anything with creative accounting, hell Enron was showing a profit year after year and look what happened. I don't think Walmart's stockholders would accept a profit rate of 4%. So I'm guessing this is bullshit as well.

And sweet Jesus on a stick, how the HELL is making working people take less going to fucking improve anything? I am so damn sick and tired of being lectured to by corporate stooges who pretend that a system gimmicked by them is somehow some kind of natural event like a typhoon or a flood that we have to shut up. It's gibberish like this where the politically weak are told to shut and take it like a man by soft pink men in expensive suits who never have to worry about their next meal, health care or any material need that is making me more radical as I get older.

That McGovern is doing this is just makes it worse. But it doesn't really matter - he's just one of a chorus singing of a brave new world where only the rich are happy healthy and secure.

[zalinda]

7. I know that at least one profit margin is much more

than 4%. I buy the exact same item at $.50 and sell at $1.75, they sell that same item at $4.99. You would not believe the mark-ups on some of the things that they import. I buy small quantities of items, so of course I don't get the deep discount. I can imagine that if I pay $.50 for something, they get it for $.35 when they buy it by container loads.

zalinda

[izzybeans]

6. Key words "wages and benefits" price gouging by insurance

companies, medical supply firms, etc. are being placed on the shoulders of workers, just as the poor business strategies of corporate managers.

How much of this 64 is in overtime because plants are understaffed, and how much more of it comes from the benefits section.

McGovern should spend more time figuring out the insurance iron cage problem we are in before he starts scapegoating the workers just trying to feed their families.

Jim Jones hands out the Kool-Aid from the grave.

[Yollam]

12. What a disappointing thing to read.

American workers have already spent 25 years adjusting their expectations, doing more and more work for less and less in salary and benefits. While there may be cases where individual unions have made unreasonable demands of management, the fact is that if GOVERNMENT had not ABDICATED its RESPONSIBILITY to PROTECT AMERICAN INDUSTRIES and NOT pit American workers against third world workers and illegal aliens, the rising wages of union workers would create pressures to help bring up ALL WAGES.

It is the obligation of every nation to engage in at least some measure of protectionism to shore up the living standards of its people and ensure that the nation continues to have a vital manufacturing base. The democrats and republicans' abdication of that duty in the name of "free trade", IE "The race to the bottom" is the greatest betrayal of the American worker in a century, and the most shortsighted economic shift ever engineered by the wealthy power elites. In the long run, the very country they live in will have been transformed into another Mexico, with a majority living in dire poverty, a minority of petit bougeoise living in tacky mini-castles, and a tiny number of the obscenely rich, who have no allegiance whatsoever to this country, and constantly remind the rest of us that if we should so much as raise a peep, they will take their precious capital with them elsewhere.

F-ing anti-American traitors, every one of them. How sad to have to add the likes of McGovern to that list. it's one thing to be a realist and realize that this pile of crap is the political reality we have to deal with. It's another altogether to call for making it even worse.

[Initech]

14. And the repukes have the nerve to call us Marxist.

It's pissing me off, we're at a point where the rich keep getting richer and the poor keep getting poorer. And this is all thanks to repuke CEOs who keep trimming off our wages and gouging us at the gas pump and at the doctor's office. And then these assholes like Hannity and Limbaugh have the nerve to say time and time again that the democrats are Marxist and communist. Bullshit. Far from it. Do they want a worker's revolution? Is that what they want? If so, I'm willing to fight.

[AzDar]

16. Wow. That is a disappointing and unacceptable proposal..and

from McGovern!

[B Calm]

21. my company owes me 49 dollars for safety shoes. That's what they

give us per year on an expensive pair of safety shoes. Only trouble is they won't reimburse you if you're a new employee until you get your 90 days in. It appears safety for the employee doesn't start until after 90 days. Is that fucking cheap or what!

I heard today the CEO just ordered 3 new corporate Lear Jets, so he must need my 49 dollars for jet fuel...

[Hoping4Change]

22. How does McGovern square his views with Warren Buffett who

has serious issues with exorbitant CEO pay packages? And how does he explain the fact that CEO pay is 500 times what it was 20 years ago and that at that time a family could live on the earnings of one breadwinner.