Explaining Economics one 6 Pack at a time.


The Big 3 Bail Out and the UAW

So who is to blame at the UAW for this mess?  My last post talked about the corporations blame.  This one will go into the UAW blame.

 I never begrudge someone from making a good living and trying to become rich.  I hope to be there one day.  What I don’t like is when it gets abused.  And looking at the salaries of the UAW, I firmly believe that it was abused.  

 Unions can be just as short sighted as Corporations and this is definitely the case with the big 3.  Who signed these contracts?  147K a year (salary plus benefits) for an assembly-line worker?  Is there a special talent needed for this or perhaps many years of technical training?  Just a high school degree and a good work ethic (plus a connection I am sure) is all that is needed. 

 I think what we have here is a supply and demand problem.  I can’t believe that the supply of high school grads with a good work ethic is so low that these assembly line workers can demand such a high salary (I would love to get the salary by the way).  I will never begrudge someone from getting a good salary but this is just ridiculous.

 Was there a time when the big 3 controlled all and were so full of profits that they could pay these salaries? Sure there was, oddly enough it was when they were making some of their worst products.  The unions pushed to get ever little bit they could out of the corps with the idea that they were only going to get stronger and would be able to pay these benefits.  But alas like all things, this was soon to change. 

 Now Detroit can no longer pay these extravagant salaries (the upper management too).  Detroit needs to change and change fast.  They need to cut costs and make better cars.  Some people will have be cut or everyone will have to be cut.

 Figures, just when they make a car I am really excited about too.

 NOTE: Although the orginal salary was based on a shady number, the real number is closer to $55 an hour for pay and benefits or about 100,000 a year.  Still seems like their would be a larger supply of people willing to the do the job then the demand for the jobs but who knows.

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