Are Permanent Wage Cuts Just around the Corner?

[The Straight Story]

Are Permanent Wage Cuts Just around the Corner?

Monday, November 29, 2010 Large manufacturing companies are using the weak economy as leverage to force organized labor into accepting different levels of wages for workers that would last long into the future, even after a recovery kicks in.

Use of two-tier labor systems—in which new hires earn less than current employees—was used in the 1980s when businesses convinced unions that concessions were necessary to bring operations back into the black. But unlike the Eighties, when companies agreed to go back to one pay structure after good times returned, corporate executives today are hoping to make two-tier systems permanent.

Two-tier systems now exist at General Motors, Chrysler, Delphi, Caterpillar, Harley-Davidson, Mercury Marine and Kohler. The latter three companies, all based in Wisconsin, “are systematically implementing a major strategy to permanently drive down wages far below anything considered ‘middle class,’” writes Roger Bybee at In These Times.

http://www.allgov.com/Top_Stories/ViewNews/Are_Permanent_Wage_Cuts_Just_around_the_Corner_101129

[old mark]

1. I have little doubt they will be. The incoming republican governors are going to be union busting

whenever possible, and they will give an OK to every business and corporation who intends to lower wages and benefits for those workers who are actually have jobs, while ending UC, safety regulations and health insurance coverage for many workers.
They will havge the support of teh republicans in congress as well as how ever many new members will be elected in 2012, along with the strong possibility of a republican president.

Back to the 1890's!


mark

[October]

2. FedEx already did this, even though they were still making profits

They immediately used the bad economy as an excuse to cut wages -- drastically -- even though they were never in the red.

They're already based in a right-to-work state
They all but invented the concept of hiring part-timers so as not to pay benefits
They schmooze the pols at their DC-based FedEx Field

Not sure, but I think the airlines INVENTED the two-tiered salary structure -- it was their way of dividing the pilots' union(s). They called it "B-scale."

[JackintheGreen]

7. UPS has done this for at least the last 2 contract negotiations

dating back a decade. I worked there while working on my dissertation and my payscale and rate was much different from people who were hired even five years previous. And the people that came just before I left had an even weaker contract.

Still difficult to get fired, though. That's something, I guess.

[October]

21. American Airlines, I believe, instituted the "B Payscale" for pilots

This goes back to the 80's, I think.

It sure is one-sided, but yes harder to get fired IF you have a union. FedEx has only one union on their global campus -- ALPA for pilots -- and they fight them tooth and nail 24/7/365.

[Trajan]

3. I can find a way to live with minimal income ...

The fact is, however, that this policy, along with the other wage suppression efforts that have been wildly successful for conservatives, will ultimately succeed in killing the economy for most small businesses ....

The rich will NOT get richer when families have no disposable income ...

As I have supported GM and other unionized manufacturers in these times of trouble, I already CANNOT afford to buy GM, or Harley, or Chrysler products ...

They seem to have no idea that those good wages support more than just GM .... They support a society and it's economic system.

[FreakinDJ]

5. The rich WILL get richer when families have no disposable income

They'll take your home

[Trajan]

20. What home ?

Say I had a home to take ... what then ? ... Sell it ? .. to who ? ...

No ... I completely disagree ... The market is diving as it is; There is no reason to presume a sudden rush on Real Estate in a tanking market ...

When families are poor, the VERY VERY rich are barely affected, but the near very rich, and the almost rich, and those who start businesses to become rich: THEY get shut out ...

[WinkyDink]

4. Well, since it has been the long-term GOAL, I'd say yes.

[mrdmk]

6. Permanent wage cuts have been here and are here to stay

Starting with the fact, a job that required a high school education now requires a four year degree. To add insult to injury, this four year degree job does not pay nearly as well as the old high school job when inflation is factored in. That is just the wage, now what that money will buy you is another can of worms for another thread...

[LWolf]

8. In the last 18 months, we took 4 "temporary" wage cuts.

Our contract is up for renewal this spring. Negotiations begin after the first of the year. The state budget isn't improving any. Every time we negotiate more cuts and think we've met the budget, more bad news comes down from the governor's office. I expect all those temporary cuts to become permanent this spring, with additional cuts possible.

Add this to the fact that, in October, our insurance premiums increased an unprecedented 30%, while our deductibles doubled, and, in some cases, tripled.

I'm a public employee.

[Octafish]

9. Just because there are record profits doesn't mean we have to have high wages.

"Get real." -- Wall Street Overlords and Masters of the Universe and Government

[NNN0LHI]

10. Short answer. Yes

Not going to be just for manufacturing either. Its going to be for everyone.

Don

[DemoTex]

11. The infamous "B- Scale" of American Airlines & the UAL pilots' strike of 1985

The war at American Airlines started back in 1983, when a growth imperative gripped major airlines as they raced to compete with low-fare startups. American CEO Robert Crandall convinced the pilots that the airline couldn't buy planes to add routes unless new pilots could be hired at drastically reduced pay scales. It seemed like another brilliant Crandall win-win at the time. The pilots who were then at American got to keep their pay, and the new planes offered them opportunities to move more quickly from co-pilot to captain status. Meanwhile, with each new cut-rate pilot, Crandall lowered his average labor costs, all the better to finance the debt incurred in buying the new jets.

Several years later, however, this move came back to haunt him. The pilots hired at what came to be known as the "b-scales" developed a sort of inferiority complex. "All of a sudden, there was a whole group of people working there who were extremely resentful of the fact that the person sitting next to them was making a lot more money for exactly the same job," says Larry Crawford, president of Avitas, an aviation consulting firm in Reston, Virginia. "They began to wonder what kind of scheme was coming at them next." It might seem strange, given that many of their jobs might not have even been created without the b-scales, but they still resented their status as second-class citizens.

http://money.cnn.com/magazines/fortune/fortune_archive/1997/04/28/225523/index.htm

On May 17, 1985, United's pilots went on a 29-day strike claiming the CEO, Richard Ferris, was trying to "break the unions." They used management's proposed "B-scale" pilot pay rates as proof. American Airlines already had a non-merging B-scale for its pilots. Ferris insisted United had to have pilot costs no higher than American's, so he offered United pilots a "word-for-word" contract to match American's, or the same bottom line numbers. The United ALPA-MEC rejected that offer. The only choice left, to achieve parity with American's pilot costs, was to begin a B-scale for United's new-hire pilots.

Ferris wanted that B-scale to merge in the captain's ranks, which was more generous than American's B-scale, that never merged at all. But, the ALPA MEC insisted they merge in the new pilot's sixth-year with the airline. In the final hours before the strike, nearly all issues had been resolved, except for the time length of the B-scale. It appeared that would be resolved too as negotiations continued. ALPA negotiators delivered a new counter-proposal at 12:20 a.m. in an effort to avoid the strike. However, MEC Chairman Roger Hall, who was hosting a national teleconference from the Odeum (a convention center in the Chicago suburbs) with F. Lee Bailey, declared the strike was on at 12:01 a.m., on May 17, without further consulting the negotiators, some of whom believed they could find agreement on all contract terms, if the negotiations were allowed to continue. Moments before the ALPA announced strike deadline, they began a "countdown of the final 30 seconds from Chicago" (the Odeum teleconference). Doing that made it impossible to extend the strike deadline, so that the final issues could be resolved without a strike.

http://en.wikipedia.org/wiki/United_Airlines

The American Airlines pilots - a greedy bunch back then - caved to Robert Crandall and allowed the non-merging B-Scale for new-hire pilots. That was the Pandora's Box for most other US airlines. The UAL pilots had the courage to stand up (AKA: strike) to the B-Scale, and reduce its effects on their lives and those of many, many other airline pilots at other airlines.

Disregarding the warnings of Hosea 8-7, American CEO Crandall sowed the wind with his ill-conceived B-Scale and then, for over 20 years, reaped the whirlwind of hostile labor relations with the American Airlines pilots' union (APA).

[Edweird]

12. Since the current "Dem" president supports it, and the following R admin surely will,

I'd say for all intents and purposes the answer is 'yes'.

[w8liftinglady]

13. i predict not only wage cuts,but repealment of minimum wage.

[WinkyDink]

16. And who will stop them? Nobody. TPTB would mow down rioters/protestors without batting an eye.

[L0oniX]

14. How else are they going to continue with the millions in bonuses & financing campaigns?

[starroute]

15. This is already affecting office jobs

My son just took a job at $10 an hour doing work of a kind that ten years ago would have paid maybe $12 -- which means that factoring in inflation, it ought to be $14 or $15 now.

He's got a college degree and a couple of previous office jobs under his belt, but he's getting what used to be file clerk wages. Under current conditions, he's glad to have anything that will pay the bills -- but if these are the prevailing conditions, I'm going to have to write off the idea of ever having any grandkids to spoil. And that sucks.

[WestSeattle2]

19. And $10/hour jobs don't stimulate the economy, they barely

pay for basic needs. Sad state of affairs.

[sarcasmo]

24. I often wonder if a college degree is worth the costs in these times. Met a girl awhile back

who was working at Enterprise rent a car with a four year degree from Central Michigan University. When you owe 50,000 to 100,000 for an education and make 10-15 bucks an hour, how can you possibly pay it back?

[inna]

17. late knr nt

[KG]

18. already here.

[conspirator]

22. My prediction is that the Rich will keep cutting our salary until

we make the same as a third world sweat shop worker. Or until heads start to roll down, literally.

[sarcasmo]

23. The middle class has been destroyed and we are in a third world country.

The rich and every one else making 15 dollars or less an hour.

[Romulox]

dupe. nt

[Romulox]

25. I got the Prius running. When's the protest? For the Workers! nt