LC’s Commentary

Listen To The Voice of Reason

Automotive Industry Bailout



I view with great interest the dispute over whether taxpayers money should be used to bail out US auto manufactures.  There are two trains of thoughts that must be considered.  If you listen to and believe what conservative talk show mouth pieces have to say, contracts between automotive assembly plants and its union workers is the problem.  It is easy to blame the assembly line workers because they do make very livable wages and have benefits unavailable to many workers in other areas. If union contracts led to the financial mess the automobile manufactures find themselves in, then shops devoid of unions should be doing just fine. If one makes the argument that unions are contributing to the demise of US manufacturing jobs, then unions loss of representation of workers should be offset by an increase in jobs remaining in, and returning to the US. Statistics does not support this logic. The business model many US businesses are following is what is causing the loss of many jobs in the US.

According to the US Bureau of Labor Statistics, in 2007, Union members accounted for 12.1 percent of employed wage and salary workers, essentially unchanged from 12.0 percent in 2006.  In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent. If my math is correct, workers with union representation has dropped by 8 percent since 1983.  

You may be surprised to know that most union workers are in the public sector, not in the private sector.  The union membership rate for public sector workers (35.9 percent) was substantially higher than for private industry workers (7.5 percent).Within the public sector; local government workers had the highest union membership rate, 41.8 percent.  This group includes many workers in several heavily unionized occupations, such as teachers, police officers, and firefighters.  Private sector industries with high unionization rates include Transportation and utilities (22.1 percent), telecommunications (19.7 per-cent), and construction (13.9 percent).  In 2007, unionization rates were relatively low in agriculture and related industries (1.5 percent) and in financial activities (2.0 percent). Private sector jobs, the ones less represented by unions are the ones going overseas. Thus the argument that unions with their outrageous wage and benefit packages are bankrupting this country and forcing companies to move their manufacturing base overseas is unfounded. Organized labor must take a realistic approach to this thing called fair and livable wages.  It makes little sense to demand high wages and suddenly find yourself or fellow-workers unemployed. An old adage say; I would rather be working for 10 dollars an hour, than be worth 15 dollars an hour unemployed. Management certainly bears a lot of the blame. The mere fact that top management is paid such huge salaries and has unimaginable perks makes it very difficult to persuade workers that companies cannot continue to pay what workers are earning.

The second very important thing this nation must consider is the impact of not having strong, dependable and viable vehicle manufacturing capabilities in the United States. Let us not forget we are currently fighting two wars. Surely these automotive companies are building things for the military. Are we to depend on China, Japan, Mexico and other lesser known countries to supply our military ground transport needs? Are we to depend on other nations to manufacture and provide vehicles necessary to deliver products in America? One must not forget we have approximately 500,000 troops abroad, including sailors at sea, and stationed on 750 plus overseas bases.


November 21, 2008 - Posted by | borrowing money, Taxpayer bailouts, Uncategorized, wealth redistribution

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