DETROIT, MI — Wages can consist of your paycheck, your profit sharing check and the cost of medical insurance for you and the family. They can also consist of the medical insurance and pension checks of workers who retired from the company you work for. Lastly, they consist of income, Medicare, and Social Security taxes, which pay for Medicaid and Medicare insurances and Social Security checks of today’s retirees and their families.
Since 1980, increases in productivity through new technology has been the basis for the decreases in our wages.
A robot may cost a year’s wages and save many years of wages for the company by replacing wageworkers. The robot doesn’t have a family to support, it doesn’t require healthcare or a pension. It doesn’t pay taxes. And a new robot is not needed until it wears out years later. In that case, the robot is replaced with the next generation of robots which cost less, does more, and replaces many more wage workers.
In other words, two products are produced in an hour with half the workers because of the new technology. Objectively, it is good for us and society because we can produce more with little or no labor involved. Objectively, it is bad for the corporations because there is little or no unpaid labor involved.
In order to increase unpaid labor the corporations have to reduce the wages of those of us still working.
So the current strategy of the corporations is to rid themselves of the responsibility for retirees or as they call them “non-employees”. Remember, their medical insurance and pensions checks are part of our wages. The result is and will be more poverty for retirees.
One example is the establishment of two-tier wages at GM, Ford and Fiat/Chrysler in 2007. The savings from two-tier wages was used to fund the Voluntary Employee Beneficiaries Association (VEBA) to establish a medical insurance fund for UAW Retirees independent of the big three. We are having a hard time accepting that in the big three new hire wages were cut by 50% in order to eliminate the corporations’ responsibility for retiree healthcare.
Now, two-tier wages are a problem for the UAW because of the “right to work” laws recently passed in the “Rust Belt” in the Midwest. Under the “right to work” law, union members do not have to pay dues as soon as the ink dries on the 2015 UAW contract. Certainly, UAW members in auto who are earning 50% less than UAW members working right next to them will stop paying dues until they are all earning the same wages.
So the goal of the UAW in the 2015 contract negotiations is to eliminate the present two-tier wage system. But the only bargaining chip they have is the retiree pensions. They have to trade two-tier for retiree pensions and drive the retirees further into poverty or strike to eliminate two-tier and save retiree pensions. A strike could be a blow against poverty.
That is the political reality that UAW active workers and UAW retired workers are faced with in these 2015 auto contract negotiations. They need to unite against their common enemies.