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Labor Unions’ Last Stand
By Shlomo Maital
Some 50,000 General Motors workers, members of the UAW United Auto Workers, are striking; the strike is over 3 weeks old, and each side has now hardened its position.
Strikes were quite rare for two decades or more in the US. But last year, half a million workers went on strike. So – what is going on?
GM workers face a bleak future. Car producers are shifting to electric vehicles (including in China) and producing those takes far fewer workers. Moreover, car production today is highly roboticized. GM, which was bailed out by the US government during the 2008 financial crisis, is now highly profitable; but it has no intention of getting locked into an expensive labor contract, when it plans to shed thousands of workers and close plants.
In the 1950’s a third of all workers belonged to unions, in the US. Today it is just about one in ten. As manufacturing migrated to Asia, and services dominated, unions shrank. Service jobs are mostly non-union. Moreover, employers switched to hiring temporary or contract workers, who have no social or pension rights, to cut costs. Google, for instance, employs more such ‘temps’ than regular employees. (Recently, a group of Google contract workers in Pittsburgh organized themselves into a union – a trend that may spread).
GM workers get minimal strike pay – but they are determined. So is GM. In a global economy, GM can produce anywhere – in Mexico, or even in China. So labor has become a commodity whose price is cheap and getting cheaper at times. This has devastated the middle class, where once UAW jobs paid $24 an hour and more. Those jobs are disappearing.
The impoverishment and commoditization of labor in the US– one of the negative consequences of globalization – have been largely ignored, even by Obama and the Democrats. One result, I believe, was Trump’s election. Trump’s promise to bring manufacturing back to the US is utterly empty. But his voters, blue collar workers, choose to vote for someone who voices their pain, even if they know his promises are utterly hollow.
At the Battle of the Little Bighorn, Custer’s last stand, the Lakota, Cheyenne and Arapaho tribes defeated the US Army’s 7th Cavalry. The underdogs won.
I’m afraid that in the UAW’s last stand against GM, the labor underdogs will lose. And the only Democrat presidential candidate who seems to notice is the dark horse candidate Andrew Yang, who wants to pay workers a guaranteed income. Sooner or later, we may all come to realize that there is no other choice.
When Democracy Breaks: Understanding Brakes-It (Brexit)
By Shlomo Maital
Are you puzzled by the Brexit fiasco? As are the Brits themselves – and the rest of the world?
I spent a year in Manchester, UK, studying economics, many years ago, and came to like and understand the British people. Here is my ‘take’ on Brexit.
British democracy is built around its Parliament. There are 650 members of Parliament, elected by parliamentary district. There are two main parties: Labor and Conservatives. Liberals were strong for a while, then disappeared – now there is DUP (Northern Ireland) and SNP Scottish Nationalists. So there has been fragmentation, as there is in nearly all democracies, and above all, splits WITHIN the two major parties, Labor and Conservatives.
I love watching question session in the British Parliament. “The right honorable member from Dipsy-Doopsy has clearly failed to understand the essential elements of this issue”. Polite debate, sometimes raucous, but real intelligent debate, unlike in many Parliaments, and strongly contrasting with, say, Israel’s Knesset.
But here is the problem. British democracy is adversarial. Labor vs. Conservative. Them against us. Usually this works. People vote, and choose between them decisively.
Until now. The governing Conservatives had a bare majority, with the help of DUP — and then basically lost DUP support. So they lack a majority.
The Brexit referendum was very close, 51% for. The slogan of the “for” was: Take Back Control. That made stopping migrants the key issue. People wanted to stop the flow of migrants across the English Channel. But what about the other stuff that came with leaving the EU? Northern Ireland-Ireland border? Trade/ auto plants? Investment? Foreign workers? Foreign residents? British living in Spain?
PM David Cameron, at the time, OK’d the referendum because he was sure it would be defeated. He opposed Brexit. He lost. And the chaos began. Because Cameron had no plan for leaving the EU. None. People voted for leaving, without knowing how it would be done.
What is needed now is compromise, collaboration. WITHIN the Conservative Party, the two wings – hard Brexit and soft Brexit – have to join together and agree. WITHIN the Labor Party, the two wings, ‘stay’ and ‘leave soft’ , have to agree.
Finally, at the 12th hour, PM Theresa May has offered to sit down seriously with opposition leader Jeremy Corbyn. To bargain. But in an adversarial system, them against us, and at a time when both of the major parties are internally divided, the chances of an agreement are slim. The two leaders deeply despise each other. What are the odds they can agree on anything, even the time of day?
We’ve had a dozen votes or more in Parliament – and not a SINGLE one has generated a majority for anything! Except, perhaps, not leaving without some kind of agreement.
So the odds now are Britain will crash out of the EU in early May, or before, without any real orderly agreement. It will be less chaotic than many warn, but very very harmful to Britain’s economy and future. Because there is no Parliamentary majority for Anything.
And most of all, Britain’s image as a paragon of democracy, a good place to invest, and London above all as the world’s financial capital, all have suffered irreparable damage.
Democracy is great. Until it breaks. British democracy broke, because an adversarial system seemed unable to adapt to become a collaborative one – let’s get together and solve this. Even when the cost is infinite – collaboration seems well beyond the current Parliament.
Brexit? Or Breaks-It? Very sad. And just watch the dictators – Putin, Trump and others – rub their hands in glee as the EU comes apart.
TIMnovate 