The Washington Post is very happy that conditions of the auto bailout are forcing the United Auto Workers to make further concessions. They devoted two news articles (one on the front page, the other on the front of the business section) and the lead editorial to the topic. The front page article carried the headline: "UAW's Sacrifices Look to Some Like Surrender." The article included numerous comments touting the pact as a historic defeat for the union. It also asserted that by eliminating the difference in compensation between union and non-union plants, the bailout "would render moot the union's fundamental purpose, some industry analysts and labor experts said." Actually, none of the labor experts cited in this article were identified as saying this. Labor experts would know that non-union workers can be fired at any time the employer chooses to fire them. By contrast, the union protects workers from arbitrary dismissals. Labor experts know that job security is very important for people who depend on their job for their income, so it is unlikely that any labor expert would have said that there was no reason for a union to exist if it could not produce gains in compensation. The business section article also touted the impact that the bailout conditions would have on the UAW, as demonstrated most clearly by the headline of the page 3 jump "With bailout, Downsizing Could Hasten the Demise of the UAW." The Post editorial, after deploring the fact that bailout money was diverted from Wall Street to the real economy, celebrated the pay cuts that the bailout would impose on UAW workers. For some reason, the Post attaches enormous importance to reducing the pay of auto workers who earn $28 an hour. It shows no comparable concern for reducing the pay of auto industry executives to parity with their foreign competitors. (The top executives at Toyota, Honda, and other successful companies get paid in the neighborhood of $1-2 million a year. Unlike their U.S. counterparts, they don't get paychecks in the tens of millions of dollars even in the best years.) The Post has allso never felt the need to insist on large pay cuts for Wall Street executives even though their banks are now wards of the state.
--Dean Baker Addendum: I neglected to check the Post's arithmetic in this editorial: big mistake. The Post told readers that pushing UAW workers to parity with workers at the transplants would save $800 a car. Let's check that one. GM has around 80,000 UAW workers. (It may actually be closer to 75,000 these days.) These workers get average compensation of roughly $100k a year, for a total UAW wage bill of $8 billion. GM is currently selling 3 million cars a year, which translates into a UAW wage bill of $2,700 per car. Bringing UAW workers to parity with the transplants implies a cut of 10 percent, which comes to $270 a car. So, the WAPO's $800 number is off by a factor of close to 3.
