Why don't the Japanese, Germans, and Koreans raise their worker's wages to meet UAW wages?

[DainBramaged]

Why do we have to race to the bottom, and have our wages dictated by Foreigners? :shrug:

[Pavulon]

1. Germans pay well

I cant speak for the others but German manufacturers generally pay well. The UAW is not able to set wage demands during the current situation.

[Fovea]

2. Why don't American workers

get five weeks vacation, free healthcare, nearly free college education, or
work a 32 hour week?

[Cessna Invesco Palin]

14. Because they hate taxes.

Those benefits come at a cost. I live in the UK, and I pay taxes that are probably unfathomable to most middle class Americans.

[SammyWinstonJack]

19. I'd gladly pay more taxes for the benefits that the UK and other countries have.

However, if our government would put our tax $$$ too better use, maybe we wouldn't have to pay more. :shrug: I doubt either will happen any time soon, though. x(

[Cessna Invesco Palin]

22. Unfortunately, it doesn't seem that most people agree.

Which is how Bush could get away with running on a platform of cutting taxes on the rich.

[SammyWinstonJack]

25. Yes, you're probably right. Unfortunately.

x( But even if the majority of Americans did agree to higher taxes for the benefits other countries enjoy, I don't think that the greedy corporate capitalists would allow it. I am sure they wouldn't allow it.

[depakid]

56. Problem is that most Americans are innumerate

and have allowed ideology to short circuit their reasoning processes.

Thus, they're willing to pay much more for less care- risk bankruptcy and accept declinging wages and benefits, and raise tuition at universiries rather than pay substantially less on their personal balance sheets in hated taxes.

[Cessna Invesco Palin]

65. Aye, but there's the rub.

You make the personal choice to pay for tuition, a good health care program ,etc. Whereas in most European countries these decisions are made for you, by the government. Don't think for a moment that there isn't animosity here amongst the middle class about the sorts of taxes and fees that are levied to allow these sorts of programs to take place. There's a begrudging acceptance of it, as opposed to any sort of active enthusiasm for taxation. It's just that the standard tax burden here is so much higher to begin with, and everything is seen in terms relative to the current tax burden. Europeans don't like tax increases any more than Americans. In the case of the UK, we live in a place that levies a 17.5 percent sales tax, perhaps 15% of your pre-tax earnings (if you are in the middle class income bracket) for health care, and, depending on your income, anywhere between 25 - 45% of your income - at the national level. Add onto that the sorts of local taxes that you might pay (>£100 per month for a small two bedroom house, as a renter) and it does really add up. The tax burden here is huge. However, the services that are provided are much more extensive and comprehensive than anything in the United States.

[depakid]

71. Something Americans would be flabbergasted at is the price of prescription drugs in the UK

My recollection is that it amounts to around £11 per prescription.

Quite a number of Americans- particularly older folks, easily rack up 100's and even 1,000 dollars per month on medications alone.

(and yet still rail against socialized medicine).

[Cessna Invesco Palin]

73. The one time I've had to get prescription drugs here it cost me nothing.

Granted, this was not a long-term medication. It was a week long course of penicillin based antibiotics, high-strength paracetamol, and athlete's foot medication. (I had the tiniest puncture wound in the world on my foot, and it decided to try to kill me. Long story for another day.)

There's something almost magical about being able to walk into the emergency room at the hospital, present with a serious and fast-spreading infection, get put on IV antibiotics and kept overnight, then given more drugs than you could have ever imagined, without even opening your wallet.

Oh, and the coffee was excellent, too.

[mwooldri]

85. Lots of people pay nothing.

Everyone in Wales has free prescriptions. Scotland will soon have free prescriptions, as will Northern Ireland.

England will continue to charge though.

However, even if you're in England there's lots of exemptions from having to pay. 16 and under, 18 and under in full time education, 60 and over, pregnant and 12 months afterwards, low income people, job seekers, "war pensioners" (we'd call them veterans here), all are exempt. If you have to pay the current cost of a prescription is £7.10 a prescription... but if you need a lot of prescriptions, you can buy a 3 month or a 12 month pre-payment prescription where during this period all your drugs are covered under this one payment. A 12 month certificate presently costs £102.50 - at todays exchange rates about $160.00 Even this can be spread out over 10 months - pay by direct debit.

[KG]

46. me, too

but unfortunately for us, most americans believe in the most outrageous fairey tales.

[gizmo1979]

31. Hey I'm on 32 hrs a week now

let me tell you it's not all it's cracked up to be.

[Vincardog]

3. Actually the wages paid at the foreign plants are higher. The stats skew up when you add in the

retired expenses without increasing the worker count.

UAW workers make $28/Hr. The average nonunion worker in Alabama makes $30/Hr.
So you see (p)Resident $hit for brain$ wants to give the union workers a raise.

[DJ13]

10. "Actually the wages paid at the foreign plants are higher."

For now.

But why do you think those Southern Senators were wanting to bust the UAW?

So those foreign manufacturers can stop paying enough to keep the UAW out.

[Cessna Invesco Palin]

26. Yes, because every Senator's primary goal is to make his or her constituents poor.

I'm sorry, but that doesn't make a lick of sense.

[PinkoDonkey]

27. In a way, it does.

You might be interested in this article: http://www.salon.com/opinion/feature/2008/12/18/third_reconstruction/">The Economic Civil War by Michael Lind

[Cessna Invesco Palin]

47. This article is laughable.

Contrast the U.S. with the European Union. The nation-states of the European Union collaborate with each other in order to compete against foreign economic rivals, including the U.S., Japan, and China. By contrast, many states, particularly in the South, collaborate with foreign economic rivals of the U.S.

I find it extremely hard to believe that anybody who has seriously studied the European Union could have written that. Internal competition within the EU is fierce, regardless of what the bureaucrats in Brussels would have you believe. When the last vestiges of the UK auto industry collapsed, where was the EU? Did the EU protect the UK auto industry from China? No, it did not.

Any British or French or German leader who proposed collaborating with Japan or the U.S. in order to wipe out industry and destroy jobs in neighboring EU member states would be jeered out of office.

Again, utter foolishness. European car manufacturers have been collaborating with Asian, Indian and other manufacturers for decades. Renault has already collaborated with these companies to start selling cars in the third world. Whoever wrote this doesn't have a goddamn clue about what's going on in the European auto industry.

There's no point in even addressing the regionalist idiocy of the rest of the article. It presents no facts. It's a rant. And I don't care.

[Fovea]

32. Sure it does.

Political participation and donations are highly dependent on education and well-being.

The miserable, ignorant, and down trodden vote the way you tell them too, mostly. They either take it or they sneak up to you in an alley with a knife.

It is the well educated middle class that will go and run against you.

The system as it is currently working is mostly another service dedicated almost exclusively to the
welfare of the rich.

[sandnsea]

4. Why are Japanese cars so expensive

if their wages are so low. And where is the excess money going.

[Cessna Invesco Palin]

15. It goes into making cars that aren't designed to be obsolete in four years.

And to be fair there are plenty of inexpensive Japanese cars.

[sandnsea]

17. What's the cost comparison

I've never seen any numbers that indicate Japanese companies spend more on materials.

[Cessna Invesco Palin]

24. I was being a bit sarcastic in my original post.

But I haven't seen any numbers indicating that Japanese or Korean cars are any more expensive than American ones. German ones are, obviously, but there really aren't any German brands that aren't considered upmarket in the states.

[Kalyke]

20. Then why are they always in the shop?

:shrug:

[Cessna Invesco Palin]

21. Yes, Japanese cars are so notorious for their unreliability. n/t

[Hannah Bell]

48. their wages are comparable. the standard storyline is bull.

[Deja Q]

5. K&R

[spin]

6. I don't believe the hourly wages are that different...

It's the legacy costs.

The contract negotiated with the UAW in 2007 set the average auto worker's wage at $28. The $73 number was arrived at by taking all the costs of retirement and healthcare programs and dividing by the total number of hours worked by all employees. But those total numbers include the costs for the hundreds of thousands of retirees. US auto companies have been in business for nearly a hundred years, and there are still a lot of retirees who are alive and collecting their pensions. The actual value of benefits received by employees is around $10/hour.

Foreign auto companies have two big advantages here: First, the workers who build cars in foreign countries are mostly covered by government pension and healthcare systems, so the manufacturers are not burdened with those costs. Secondly, their local factories here in this country have not been in business long enough to accumulate a large army of retirees. For the local factories, this will even out over time, but in the interim, the Big Three are operating at a cost disadvantage.
http://www.gather.com/viewArticle.jsp?articleId=281474977521472

[Trajan]

7. We have discussed the real issue, you and I ...

And it fits right in with this thread: WAGES !

WAGES are the source of the problems we are seeing now: They are too low; They have not risen along with prices; The lackluster upward movement of wages for workers have been obscured by access to easy credit (Why have a wage increase if you can BORROW against your equity ????) ....

Wages have not kept up with prices and living expenses, and workers, without the 'easy credit' bromide that had been available until recently simply cannot buy cars any longer ....

UAW workers can afford to buy cars ....

German auto workers can afford to buy cars ....

ALL well paid workers can afford to buy cars - It is the MANY MANY millions of 'middle class' employees that have been denied decent raises over the last 3 decades, thanks to conservative labor policies, and are now struggling to rub two nickels together ....

Brother, Can you spare a dime ?

Yeah ... Like that ....

[OHdem10]

8. In all Industrialized nations, the Health Care, Pensions, Workers

benefits are essentially nationalized. Companies and Manufacturers,
do not have to concern themselves with these costs.

I wish someone would point out the fact that it is Payments to people
already retired (Pensions and Health Care) that are strangling the
US Automakers.. Hourly wages are really not that different.

Are we willing to yank the Pensions and Healthcare from already
retired workers?? Take this out and a load is lifted. This is
what the GOP are trying to do when they force bankruptcy. Bankruptcy
makes it legal to "re-negotiate terms".

[FreakinDJ]

9. Because Wall St. is leading the charge for Globalization

The Largest, Wealthiest consumer base is here in the USA

Hence the most money by importing cheap foreign made goods is here in the USA. So the only thing the working class here in this country can do in defense is "Race to the Bottom" right along with those Communist Dictatorships

[Trajan]

12. While that may be true .. and it is ...

Something unexpected is happening now: demand is also decreasing for foreign made goods, and countries where those goods are made are now cutting their workforce as well ...

With US consumers as the primary consumers of manufactured goods, the GLOBALIZED economy 'catches a cold' when US workers 'sneeze' ....

Corporate profits are diving as well ...

Blame it on a squeezed credit market ? .... sure, but also recognize that US workers MUST feel 'secure' enough to spend money, and therefore, they need to have enough money to spend in order to purchase goods above and beyond the dependency needs: Food Shelter and Clothing ...

The ONLY stimulus that is going to work and 'fix' this problem is, in my view, WORKER PAY INCREASES ...

A 'Bottom Up' demand economy is what really drives the economic engine .... Trickle down is hogwash ....

It is the Poor who make the Rich rich .... But only by spending their money ....

[madrchsod]

11. 50% of toyota`s profits come from the usa plants

[pnwmom]

13. In the US, the car companies have decades of retirees that the new foreign

plants don't have. That's why there's the differential -- the higher retirement payments here are lumped in with "average compensation."

[DainBramaged]

18. The scum-fuck Reich-wing Senators don't care about retirees

[Hannah Bell]

50. it's a minimal % of the cost of a car, or of total income.

GM, the most retiree-heavy, has less than 400,000 total retirees & dependents, & less than 700,000 global employees + retirees/dependents.

700,000 x $40K/yr average wages/pension = 28 billion.

700,000 x $12K/year health insurance = 8.4 billion

Total: $36.4 billion

GM's 2007 income = 178 billion

Labor cost = 20.4% of income, well within "normal" range.

[Statistical]

60. Not true. EXCLUDING legacy costs UAW wage costs = $55/hr. Transplants = $46

Now $9/hr doesn't sound like a lot but a company like GM has 200,000 employees it adds up.

http://www.theautochannel.com/news/2008/12/13/299179.html

Wages:
UAW $29
Trans $26
Wage Related:
UAW $14
Trans $9
Benefits:
UAW $12
Trans $11

Legacy Cost:
UAW $16
Trans $3
Now I don't think GM should be penalized for Legacy costs. Starting in 2010 they won't when the UAW takes over the pension & healthcare of union employees (VEBA).
So lets look at TOTAL LABOR excluding Legacy Costs

Average Wages (including 10% overtime)
UAW: $66,700
Trans: $59,800

Total Labor cost
UAW: $55/hr ($110K per employee)
Trans: $46/hr ($92K per employee)

Total labor is 23% higher. UAW workers are now 23% MORE productive than workers for Honda or Toyota.

$9/hr * 266,000 employees * 2000 hours per year = $9.5 BILLION. GM was $4.5 BILLION in the hole this year.

A $9.5 BILLION change in labor costs would move GM from losing Billions to being $4.5 BILLION on the plus side.
That is just making the wages competitive with other automotive workers = a "poor man's salary" of ONLY $59,800 on average.

If in addition to smarter labor costs GM were to cut 15%-20% of the workforce (slowly say over 5 years), close and combined plants and sell/eliminate under performing brands they could easily be profitable and competitive again.

Plus they actually would be able to pay the taxpayers back.

[DainBramaged]

74. Another GM expert. DO they ship you guys in just for these threads?

You folks know how to fix everything. Maybe if you didn't buy Transplant/Imported cars we wouldn't be having this conversation. My hope is Obama puts significant trade barriers and tariffs up to eliminate the advantages the transplants and Foreign importers have and evens the playing field, ten you guys can go back and figure out how to tell the Japanese about becoming profitable..

[Hannah Bell]

76. Labor cost is a small % of the price of a car, & a small % of total income, was my point.

You can tot up your little numbers all you want:

"Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That’s roughly the gap between the Big Three’s retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota.

Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800."

http://www.researchrecap.com/index.php/2008/12/10/autoworkers-pay-only-small-factor-in-detroits-problems/

And you already admitted: UAW workers are more productive. They can make more cars, ergo they should get paid more.

Labor cost isn't the frigging problem.

[JVS]

79. There is another aspect to that, that has to do with US outsourcing and layoffs

According to wikipedia Membership peaked in 1979 at 1.5 million
http://en.wikipedia.org/wiki/United_Auto_Workers#History

Recently, UAW membership fell under 500,000

You know all that talk about the boomers creating a social security problem by making the age chart top heavy, thus forcing those contributing to SS to pay a higher burden than previously had been borne? The same situation applies to private pension plans as well. If the big three had maintained a workforce of 1.5 millon, that additional lumping of legacy cost into average compensation would be 1/3 the size it is now. This is the dark side of attempts at cost cutting. In an attempt to create a "leaner" organization, the companies became unable to handle its obligations without a serious damage to competitivity. Of course, the attribution of legacy cost to current US wage costs is a very arbitrary accounting decision with the likely goal of depicting US employees as over-priced and squeezing them for concessions. It would be just as easily possible to factor legacy labor costs into the labor costs that GM holds on an international level and then see what average legacy costs are. GM makes money when someone buys a mexican or korean made Aveo, so they should admit that the money there can pay legacy costs too.

[ljm2002]

16. Because the plutocrats of the world...

...are united, while the rest of us are not. And they'd like to keep it that way, thank yew very much!

[bvar22]

23. Why not reduce "Executive Compensation" to match Japan & Korea?

[MiniMe]

28. It isn't the wages that are the big cost, it is the pensions

The actual take home pay is about the same. But the big 3 are paying out lots of pensions since the companies have operated in the US for years. The Japanese and Koreans don't have that problem.

[Hannah Bell]

77. The difference is about $13/hr.

If you paid all 350,000 pensioners + dependents $35K/yr + $500/mo for health insurance it comes to ~14 billion, or under 8% of GM's total income of 178 billion. Make it $1000/mo for health insurance, it's still under 9% of income.

If you eliminated retiree cost & equalized wages, it would reduce the cost of a car about $800.

Labor & retirees aren't the major cost of a vehicle - under 25% est.

If you got free labor, a $30K car would still cost you $22,500.

IS THAT CHEAP ENOUGH FOR YA, should they use slaves?

[MiniMe]

81. I think that maybe you misunderstand my post

Or at least what I was trying to say, I said it poorly. I think that it is despicable for Bush to demand the auto workers decrease wages. The unions were working with management to come up with some kind of compromise already, but that isn't the point either. The point is that the reason that the ridiculous $70/hour wage was reported is because of how the auto makers come up with the hourly cost. They are not reporting the hourly income of the workers, they are reporting the hourly cost. There is a big difference in what that figure means. If the foreign auto makers calculated the hourly cost of the workers in the same way, the foreign auto makers would show a smaller cost only because they haven't been doing business in the US long enough to have the large base of retirees.

I worry about the big 3 going into reorganization via bankruptcy because it would allow them to dump their pension plans, something that the Union made other concessions such as pay raises to get. It is disgusting that other companies have already gone this route, and screwed both Union and non Union workers in the process. Why weren't all these question asked to the financial institutions? Add to that what the auto makers asked for was a loan, not a bailout.

Peace. :hi:

[Hannah Bell]

83. sorry, i did misread, thanks for setting me straight.

[leftofthedial]

29. because they'd then have to gut their countries' more advanced health care systems

and social safety nets to match as well

and they'd end up spending way more (as we do) and their countries would be in the shitter too.

[HEyHEY]

30. Uh.. what makes you think you have a say in what they pay?

As if the Japanese will say "Oh... well, sorry USA, we didn't realize we weren't paying our workers the same as you. We'll get right on that."

[DainBramaged]

34. So you think skilled Union labor isn't worth any more than unskilled

labor at the transplants? Do you know how old the average UAW worker is, and how long he/she has been at their job? Know what the average tenure is at the transplants? About 6 years, and Toyota has about 2200 retirees (after 25 years is that a kick in the ass) and Honda has about 200!

So what were you saying in support of the Japanese Germans and Koreans?

[Statistical]

36. Unskilled vs Skilled?

How exactly are the workers at a Toyota plant "unskilled" and the workers at a GM plant "skilled".

Both make cars from parts.

Parts go in -> cars come out.

Are Toyotas easier to put together than Chevys?
If so isn't that a problem?

[DainBramaged]

38. I guess you never assembled autos in a UAW or Transplant factory?

Do you know how to check your own oil?

[Statistical]

39. So you assembled cars in BOTH?

You still didn't answer the question.

BTW: Yes I change my oil, brakes and filters.

I loved my 1995 Ford Escort (first car) because I could fix everything myself. I still remember changing out the starter motor. Was a sense of accomplishment to do it myself. Today cars are far too complex to do much myself without paying more (time=money) than my mechanic charges.

Of course I assume your question implies that I don't have a right to talk about plants since I don't work in one. Well I am a soldier so I guess by your logic that implies you have no right to question anything I say about foreign policy. However I am open and will gladly listen to your point of view despite the fact you never worked in a battlefield before.

[DainBramaged]

42. Just stop, if you don't support the right of the UAW to decent wages and

the pensions they've earned, we have nothing to discuss, and don't throw that soldier shit in my face, it has nothing to do with the discussion. I am so tired of the apologists for Foreign entities here, and it burns my ass to think that here on DU, the right to a Union workforce is questioned and spit on.

[Statistical]

43. Let me get this straight

"I am so tired of the apologists for Foreign entities here"

You would be happier if Honda, Toyota, VW closed the plants fired everyone and then made cars overseas and just shipped them here?

Just because they aren't Union they don't deserve their jobs?
Just because they aren't Union they don't deserve a good wage for honest days work?

Maybe I am crazy but foreign brands make up about half of cars sold in US. Given that I would rather the cars be built here by Americans. I would rather the foriegn companies pay American Corp Tax. I would rather they use American goods and services (ever wonder who built the plants, who provides them electricity & water, who builds the homes needed by the workers, who stocks the shelves those workers buy goods from).

I guess you would rather see Honda, Toyota, VW fail and close shop. Granted couple hundred thousand AMERICANS would be out of work but then their wouldn't be those "ebil foreigners running around".

Sad.

[DainBramaged]

45. They should be UNIONIZED and the wages brought UP to a higher standard

you don't get it. Why should we keep LOWERING our standard of living, and where do you think the profit from those very expensive Japanese cars go, Chicago? When will we reach the point where we can't afford these cars?


If you don't understand that, we're done. I am so tired of explaining this to people who either WANT to antagonize here or don't give a shit about OUR blue collar workers.

[Statistical]

52. Except the Honda auto workers ARE blue collar workers.

Except the Honda auto workers ARE blue collar workers.

The UAW has tried to unionize them for a decade and failed.
Maybe they consider their wage competitive?

Are you honestly proposing that the workers be FORCED to join the UAW just so Honda & Toyota are equally non-competitive and then prices of all cars can rise (by about $3000 per vehicle) so all the companies can profit? That's your solution.

The truth about wages
http://www.theautochannel.com/news/2008/12/13/299179.html
UAW $29
Trans $26
Wage Related:
UAW $14
Trans $9
Benefits:
UAW $12
Trans $11

Legacy Cost:
UAW $16
Trans $3

Now I don't think GM should be penalized for Legacy costs. Starting in 2010 they won't when the UAW takes over the pension & healthcare of union employees (VEBA).

So excluding Legacy Costs

Wages (including 10% overtime)
UAW: $66,700
Trans: $59,800

Total Labor cost
UAW: $55/hr ($110K per employee)
Trans: $46/hr ($92K per employee)

So are you saying $59,800 salar for production worker is UNACCEPTABLE?

Maybe we should take a poll of people on DU who would love a job paying $59,800.

So if you are willing to accept the trans are getting a fair wage.
Then their labor agreement saves them $18K per employee per year.

That is completely EXCLUDING legacy costs.

If GM saved $18/hr that would be $12.6 BILLION a year and the employees would be subject to the HORRORS of a $59,800 salary (plus benefits, vacation, healthcare, pension, etc).

BTW: $59.800 is 49.5% ABOVE the median income (the median income that includes college educated workers).

[HEyHEY]

55. Pff, the Japanese aren't "people" come on, what's your problem?

[Cessna Invesco Palin]

67. There ain't much point in arguing facts with the guy.

I kind of have to laugh. He had a big tear at me on his whole "Are you a union member or not?" thing about a week back. Guess he wasn't satisfied that I come from a union family where my dad freaking died on a laborers' union worksite. It ain't UAW, so it don't matter. Went to the trouble of having my posts deleted, then put me on ignore. Nice piece of work, this Mr. Dain Bramaged. A real friend of the working man. Provided the working man is UAW and agrees with him about everything.

[HEyHEY]

68. Yeah, he won't even answer a simple question of mine

Think I'm somehow being anti-union for pointing out we have no control over wages in Japan.

[Name removed]

69. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

82. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

44. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[entanglement]

33. Why does UAW attempt to divert workers anger against "foreigners" rather than capitalist bosses?

Why did you have no explanation for your endless betrayal of American workers under the pretext of making them more "competitive"? Why does you leader, Gettelfinger, kowtow to the bosses and offer them concession after concession, sellout contract after sellout contract? Do you remember how many strikes you have isolated and sellouts you have organized?

[DainBramaged]

35. You have no clue, a couple of bosses making a few million isn't going to make a difference

get a clue. Or, is it you support the non-union scabs in the Southern transplants?

[Hannah Bell]

53. On the contrary, it can make a big difference.

Let's assume that the top 1% of GM's 266,000 employees make an average of 1 million each.

That's 2660 people, total of their compensation = $2.66 billion.


Now assume the rest of the workforce, 263,340 people, average $40K. That's $10.5 billion.

Total wages paid out = $13.16 billion, but the execs get 20% of them.

Now add in the private jets & other compensations hidden in other budget areas: real money there.

[Statistical]

61. Anything to back up that over 2600 people at GM make over $1 million a year?

If true it should be stopped yesterday, however I doubt it is true.

[Hannah Bell]

66. I never asserted they do. I simply took the top 1% of their total employees,

assuming "employees" includes CEOS, division heads, etc. I looked over the list of very top guys & they make more than $1 mill/yr, so I figured 1 mill on average was ball park. The example is intended to show that a very small fraction of employees can make a big difference to the bottom line.

The top 1% in the US receives about 25% of GDP as income.

[AZ Criminal JD]

54. You still around?

[DainBramaged]

75. You still stalking or are you working for Toyota full time?

[Name removed]

70. Deleted message

Message removed by moderator. Click here to review the message board rules.

[HEyHEY]

51. And why is his only response to honest questions to run away

and call people stupid.

[Cessna Invesco Palin]

72. Look,

You simply aren't allowed to have an opinion unless you're a UAW worker who owns 15,347 American made cars and lives in Michigan in a cardboard box made by union labor (so that you can buy more cars instead of owning a home.) And unless your computer is powered by a Chevy big block engine you are going to hell in a Toyota.

[Waiting For Everyman]

37. Good question.

A deflated economy needs higher wages, not lower. The top needs lowering. So why don't the foreign companies raise their workers' wages, and our companies can lower our executives' pay to match the foreign companies?

[Mike 03]

40. Your point is excellent.

Differentiating between the price they are paid in their countries vs. the price they are paid here, I know that workers here who are not union are paying attention to what is happening with the Big Three. They want them to win and triumph and go on to become successful so that they can make the case you are suggesting and argue for higher wages.

K and R!

[sendero]

41. Our wages are dictated by the market..

... and in any case where wages are artificially propped up, prices of goods will rise, demand will fall.

Some parts of economics theory is la la la bullshit, this is established fact.

[Hannah Bell]

49. nope, not always the case, sorry.

[sendero]

57. Unless there is a monopoly

... it IS the case. If you can prove otherwise offer an example, else STFU.

[Hannah Bell]

58. The STFU is entirely unnecessary, you just gave one example yourself.

I'll give another, using a competitive market.

Example: Henry Ford nearly doubled the wages he paid at one point in his career, in a competitive market. It didn't result in price rises, & here's why: he offered higher wages because his production was lower than optimum due to errors, line shutdowns & turnover. Higher wages got him better employees, he turned out more cars & was able to pick up market share without price hikes on his vehicles: more production in the same 8 hours means each vehicle costs less.

Another example: If a corp is making, e.g. 10% profit, it could, should it choose to, forgo some % of its profit to raise wages.

It could also reorder its production regime or cut other costs for greater efficiency to raise wages.

There are other examples depending on the state of the market, the general economy, & the condition of competitors, or lack of competitors.

Contrary to your assertion, it's NOT "established fact" that wage hikes always = higher prices.

That's a simplification capital has pounded into people's heads to support their own agenda, but economists know it's not true.

[Statistical]

59. Inperfect market

Those are examples of imperfect markets.

Access to information, data, resources have all grown in 50 years. While markets are not perfect they are a lot less imperfect.

It is unlikely today that if you offered 20% more to employees you would get 20% more productivity.
You may get some but not 1:1 ratio. If you offer 20% more to employees but they are only 10% more productive then your goods will cost more.
It doesn't mean the workers are lazy, don't care about the company, or just costing. It may not be possible for productivity to increase.
What if you offered them a 10,000% raise? Do you think they could be 10,000% more productive?

That is why most employers offer bonus tied to productivity or some other metric rather.

Raising employee cost just to cut profit hurts shareholders. Before anyone goes crazy. Companies SELL stock to raise capital. They do thing because often it is cheaper (and less risky) then selling debt. Investors ONLY buy the stock because they believe it will apreciate.

If stock doesn't appreciate there is very little incentive for anyone to aquire the stock in a future offering.
This is EXACTLY the problem GM has right now. They have billions in debt they essentially can't pay. A large portion of that debt comes due in 2009. GMAC tried to get the debt holders to accept stock in return for their bonds. Most said no. The bonds are worth MORE even in GMAC goes bankrupt then the risk of owning worthless stock. See bondholder in bankruptcy may get cents on the dollar. A shareholder is likely wiped clean. So the largest bondholder PIMCO blocked the move. Even if the failure to convert the bonds causes GMAC to go bankrupt it is less risky then owning shares.

[Hannah Bell]

63. Saying "imperfect market" is meaningless. There is NO "perfect market".

Never has been, never will be.

The poster asked for examples, I gave them, real-life examples.

[sendero]

62. GM is making no profit...

.... so that is not going to be a source of the disparity.

Henry Ford enjoyed a virtual monopoly, GM/Ford/Chry have to compete in the marketplace against competitors with lower cost structures. They cannot.

Really Im' tired of talking about this. the auto industry is hanging by a thread and the union wants to play hardball.

That's fine, but they will lose. Their situation is unsustainable, and no amount of wishful thinking (a lot of which goes on in this forum) will change that.

UAW workers will be lucky to have jobs at all a year from now, and there is NO WAY they will have them without taking a serious haircut.

[Hannah Bell]

64. First, I gave you examples, you didn't acknowledge them.

Second, if you read GM's 2007 annual report, you'll find they DID INDEED make a profit on their auto-making/selling biz.

Where they LOST $ was on GMAC MORTGAGE operations. Lost 1 billion.

Then they "lost" another 37 billion (# from memory) from a "one-time charge" of some stored-up tax credit thingy, taken in three countries, the US & Germany being the two I remember.

I read the report. Most people just believe what they see on tv, most of which is outright lies or deliberate spin.

At the end of 2007, GM had something like 27 billion in ready cash, & several open lines of credit.

[sendero]

78. I'll tell you what..

... I responded to two of your examples, that was enough.

You see if GM makes a profit in 2008. Go ahead and take out GMAC, it won't make any difference. Come back to me with your lame arguments a year from now.

[Hannah Bell]

84. i doubt toyota will either. it ain't labor's fault.

[B Calm]

80. Have our wages dictated by Foreigners, huh? You mean cheap labor cons!