Shinchang Electrics co. offered union leaders a proposal that would reduce wages at the auto-parts company by 20% in exchange for no layoffs among its 810 workers this year. Eight days later the union agreed.
The prevailing cultural attitude is summed up this way:
“We have to go through this together. We are colleagues and friends…
Practically speaking, this would mean that when business does turn around, the workers are there. The expertise would not be lost; and rather than losing 810 consumers totally, 810 families will be more frugal.
In South Korea, it appears job preservation is the government’s number one goal. Just maybe, it would be easier to preserve jobs than create them?
Leaders of major industry groups, unions, civic groups, government ministries, etc. met and came to a non-binding compact they call “a grand bargain for social unity.” This compact is not legally binding. However, the involved employers will not layoff workers. Unions will accept wage freezes and cuts to preserve their members jobs and benefits. The government will sweeten the pot by providing tax breaks for companies that follow through and preserve jobs.
South Korea’s approach is worth watching. If the tax credits, and social consensus preserves core industries and companies and jobs, so that when economic activity picks back up, the South Korean economy takes right back off, without missing a beat, then this approach minimizes the harm from the economic downturn.
Could this approach work here too? It is worth considering. Losing the ability to make steel, or shoes, or wind turbines, or cars is very difficult to recapture. However, the culture of “me first” and the rugged individual is ingrained in our country. The yells about limiting CEO or CFO income to a set number of the “average worker” in the same company has led to howls of socialism from some.
Still, without the greed and excess of the unregulated financial markets, this depression would not be happening.
Just – what if the attitude of “We are all in this together” could prevail over “taking care of Number One”. That would be a major change, but it is a change worth considering.
You are correct about the unbridled excesses of capitalism. But I think that someone can be a “rugged individual” without being a me-firster.
What happens when profits go back up? Profits were up almost all the 2000s and the American workers never profited from it. Americans essentially make the same now that they did 20-30 years ago, because corporations haven’t shared their profits with their every day workers.
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p>Without somehow legislating that companies restore salaries later, I’m not sure that unions and workers have any reason to actually trust the companies to begin with. They’re not the one’s who caused the problem. Out of self preservation, they should be interested in solving those problems, but reducing salaries without more than a metaphorical handshake that salaries will be restored in the future isn’t fixing anything. With so little reason to trust, it’s hard to ask any union or employee to agree to a big pay cut unless there’s some protection that’s legally binding.
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p>So, it’s an intriguing possibility, but I wouldn’t ask any working or middle-class worker to forsake some of their salary unless there were promises they’d be restored. The middle and working classes, by and large, don’t make enough as it is. Not everyone can afford to even take that 20% cut – there will still be a lot of foreclosures and bankruptcies when people making $20-40k suddenly lose $4-8k a year – so you at least have to make sure their futures aren’t going to be robbed with the present.
…was that the foregone wages were actually paid to the workers when profits went up, in weekly amounts added to their pay. Imagine – treating workers like PEOPLE not cogs or widgets.
That is Socialism not Greedy Capitalism!
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p>If our dreams could only come true
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p>As Usual Just my Opinion
that’s certainly a very good start
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p>do we trust American corporations to do the same, though? They ask for so much, but rarely give anything back, unless your in financial services at a failed bank…
is that the company did not maximize Shareholder profit through company-employee profit sharing.
When the only corporate goal is maximizing shareholder profit, weorkers are abused in good times, and abandoned in bad times, and the only corrective response is to band together, unionize, and demand respect and a share in the action.
How about some numbers. My salaries in my several jons increased at least twive to five fold.
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p>Are you saying buying power was reduced due to inflation?
Even in that case I did very well. When I first went to work for the Commonwealth in 1973 I made 9K a year and had to get food stamps to survive. When we asked for a raise—M Stanley Dukakis sneered at us.
Inflation adjusted wages are pretty stagnant overall, however for white women wages have increased 32%; for black women, they have increased 24%; and 11% for hispanic and latino women. Men, however, have not fared as well, both white and black men have essentially had stagnant wages and hispanic and latino men have seen a 9% drop. http://www.bls.gov/opub/ted/20…
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p>Ryan is right about overall wages, however. Between 1997 and 2008, the average US wage went from $15.09 to $18.62. To have the same buying power in 2008, 1997’s $15.09 would have to be $20.24. You can run your own numbers here: http://data.bls.gov/PDQ/outsid…
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p>So MCRD, you may have beat inflation (congratulations on that) but most have not. However, a big deflationary cycle will push up the buying power of wages, of course you’ll need a job to benefit from that…
American salaries have increased only slowly because of a specific policy to encourage immigration, bith illegal and legal, which creates downward pressure, and significant downward pressure for lower income jobs.
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p>Policies have consequences. We have made a choice to embrace immigration over time, and to (largely) ignore illegal immigration. I tend to think that this was for the best, but it isn’t without cost. Downward pressure on wages is one of these costs.
There has been a lot of research from cognitive scientists collected by the Demos Project for the Public Sector that points our that we have competing self images of ourselves as Americans.
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p>One image of the American way is we work together collectively to grow and protect a safe and prosperous community (everything from pioneer barn raising to town meeting to revolutions). The other image is that this country provides the personal freedom and the opportunities for each of us to work hard and make it on our own.
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p>Sometimes the collective image dominates (during war time or after terrorist). Sometimes the independent image dominates (during the industrial revolution that fostered child labor or in the garages or silicon valley that created millionaires in a couple of years.)
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p>A pithy slogan from ACORN in the 1980s I liked, demanded ” A right to be free and a chance to get rich.”
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p>It’s going to be very interesting to see if workers, with or without unions can or will work together to minimize the harm to all.
Some of your poll questions are inter-related so I had a harder choice in what I support.
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p>Let me say your assumption that saving a job is easier then creating a job is a double-edged sword because some jobs you can save and others you cannot. Lets look at the Stimulus and we are looking at saving a construction cycle that normally would see large private projects like buildings and homes instead we are going to pump capital into the construction trades and take those who would normally not be rehired during peek construction periods and provide them with a job. In the trades and associated businesses this works.
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p>The broader issue is how does this or likely does this improve product manufacturing which is still a key to GDP growth and that remains to be seen. Likely the effects will be very small. Compared to our historical performance but more importantly to the levels we need to get the economy back to sustainability with out additional contributions.
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p>What is critical is the preservation of industries that produce products not services. This is a much greater up hill climb then I think many realize as even with construction you are likely to utilize products which were produced in the last up cycle then run out and buy new or additional on a short term stimulus because by nature and scale the purchase is usually passed on over a longer term then the stimulus represents so we are likely to see only a utilization of current supplies and equipment. Yet we will see.
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p>What is still being overlooked IMHO is that manufacturing sector and the obvious fact that President Obama and his team is willing to pump hundreds of Billions of dollars into AIG, Citigroup and BofA but unwilling to make the same commitment to the Auto Industry. The Auto Industry is still one of our largest manufacturing bases in our economy and again IMHO critical to long-term goals if operated more efficiently. By this I mean controlling Managements size and the % of Compensation they draw out of the corporate parent. Couple this with the issue of Health care costs adversely effecting every segment of our economy private as well as public and you line up costs that in a tough economy you see the effects that threaten viability.
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p>I think you will find that it is more and more likely that our President is going to be forced to turn his back on these Financial giants that are sucking the life blood out of government and the economy and refocused on the real base and costs of the economy. He needs to start with dear I repeat cutting the head of the snake off by removing management at AIG and putting them under the direct control of a resolution trust and allowing Citigroup and BofA to sink or swim on their own. I believe we are seeing the first steps in this direction with the bill put forward by Sen Dodd to expand to $500 Billion the capacity of FDIC such reserves would only be necessary in the event of a major collapse. I offer the following to support that opinion last year with the collapse of Washington Mutual and Indy Mac we saw out flows from FDIC of less then 50 Billion to date we have had 16 regional bank system fail in 2009 with total FDIC exposure of under $5 Billion, currently reserves at FDIC total $27 Billion with an available line on the books with the FED of $30 Billion giving them currently a reserve of $57 Billion, expanding this capacity to 10 times this current amount on hand would suggest the foundation is being laid to nationalize one or more of the largest banks in the country.
Which in my opinion is the correct move in the governments push to restore faith as quickly as possible by getting the poison out of the system as quickly as possible.
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p>As Usual Just my Opinion
referencing Krugman that suggest if the service sector and retail jobs were unionized all this time and had essentially become a new working class, one that could also afford to buy homes and send kids to school, then we may not actually need such a large manufacturing sector in the economy. In other words, it may be less about where people work and more about the benefits those workers receive.
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p>Note I say all this and don’t necessarily believe it myself – just throwing it out there as interesting conversation. Having plenty of manufacturing jobs will always be better than not having plenty of manufacturing jobs, as far as I’m concerned. Moreover, having a strong manufacturing sector and strong service sector – both with unions, good benefits and compensation should not be mutually exclusive. Heck, having both may just be the cure to creating a society that is able to provide a decent standard of living for all.
Lets all sink together.
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p>Nationalize the banks,
Socialize the industries,
Home ownership for everybody,
Health care for all,
Open the borders.
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p>America was built on capitalism and the rights or workers to organize and negotiate contracts.
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p>The socialist agenda (collective growth / collaboration) failed everywhere it was tried at other than a local level!
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p>Let the free market system work!
There really is no such thing as a free market. It is an abstract concept based on the idea that the actors in the market all have the same information at the same time and all have equal access to the market. That never happens, and we only get anywhere close to it when there is some governing entity to police the system.
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p>Needless to say, naive “free market” sloganeering is neither helpful nor convincing to anyone except the foolish.
UAW, railroad, ALPA, Longshoreman, Teamsters, USW etc.
Did you even read my comment?
businesses are free to do what they want. And you’re free to like it or not.
Sure make up whatever meanings you like for your words. Just don’t expect anyone to understand you.
Remember the Pullman Strike – and the workers who died? And then there were the lethal responses to coal workers who tried to organize.
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p>What America was built on was the novel idea of a social compact, and that collectively, we WILL get the worse government and worst economic treatment we put up with. Very didfferent, Skipper, than what you had to say.
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p>See: Pullman Strike: http://www.encyclopedia.chicag…
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p>See also: Ludlow Massacre – 20 killed, 11 of them children when coal miners tried to strike:
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p>http://en.wikipedia.org/wiki/L…
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p>See also: Morewood Massacre, again about coal miners killed by order of mine owners:
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p>http://patheoldminer.rootsweb….
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p>The Matewan Massacre – 2005 as part of an 11 month strike:
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p>http://www.time.com/time/magaz…
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p>The saying “Power corrupts, and absolute power corrupts absolutely” has as much validity today as it did in the past.
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p>That is why you can blame George III for the system of checks and balances in the US government, and the heinous acts of certain capaitalists for the need for unions.
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p>Regulation, checks and balances, and mutually regulating power centers are essential if the “little person” is not going to be abused and sucked dry. That and transparency and a vigorous free press, which today includes blogs like Blue Mass Group.
We have an interesting test case in front of us right now. Mayor Menino has asked Boston’s unions to accept a wage freeze. My understanding is that one union has agreed, and the rest have not. Read something about it here. Will the unions agree to a wage freeze to save jobs in their own ranks? There are no plutocratic capitalists to blame if the deal does not get done.
The mayor is grandstanding. If he had respect for the unions, he’d have called them all in, both as a group and as individual unions, and told them of the problems, shared all information, urged problem solving and engaged in the exploration together. Instead he has played the hardball baloney role of publicly saying he has studied the situation and the only solution is to freeze salaries.
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p>What kind of a relationship is it where the “big daddy” informs the little children of what must be done, and then gets impetuous about their 1)mistrusting him and 2)resisting the “only” solution.
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p>The adult response among the unions was exemplified by Stutman of the BTU.
One union has agreed to the mayor’s proposal.
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p>The mayor cannot renegotiate the budget with each union on a case by case basis. Further, the City’s financial information is not a big secret, and financial reports are public records.
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p>The fact remains that the Mayor has proposed a financial concession to avoid layoffs. It clearly seems to be a test case of just what Amber proposes.
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p>
that they couldn’t get from reading a newspaper or watching tv? Not like this is some big secret that the economy has tanked.
Western Massachusetts. Belchertown officials have asked for a wage freeze. My union president asked me if I’d prefer a raise or job cuts. I’m perfectly safe, but like him, I’d rather forego the cost of living raise and a potential step increase than see my colleagues and students suffer.
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p>This year’s retirees are not happy with the idea and may not retire because the lack of raise could have serious repercussions on their retirement. We’re not Boston, but my guess is that most area communities will be in the same boat and make the same choice.
Those were the ONLY options?
How do you know? How did he know?
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p>What kinds of discussions went on?
This post is interesting, but the idea that this practice is not commonplace in the US is wrong. Talk to any union member and you’ll likely hear stories about concessionary bargaining, when the company is in trouble, it’s normal. If things get better, you renegotiate wages.
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p>Unions have agreed to wage cuts in the steel, auto, textile, newspaper, paper and plenty of other industries to keep jobs for years. The great thing about unions – this is stuff workers gets to decide on their own. They weigh the benefits, and then vote on the idea. Plus, if things turn around and the boss won’t give you back your wages, you’ve got the means to negotiate with some power.
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p>There are things that complicate it however. In many pensions, the highest (or sometimes last) three, five or ten years salary is used to average out your payment. If you expected the last few years of working to be your highest, taking a wage cut for what other perceive as just one year, or a short time, is actually a lifetime wage cut if you’re planning on retiring soon, all to benefit someone who with less seniority who has more time than you to build up retirement. Before you say that everyone is taking it on the chin for retirement, why shouldn’t they, think if you were allowed to vote to reduce your 401(k) value by an additional 3% in order to achieve some social good, would you?
However, preserving a dinosaur job should not be one of them.
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p>Getting through a recession without losing jobs should not be handled by simple pay cuts, but rather work week cuts, with associated pay reductions. Every other Friday off would be a 10% reduction in pay, but no layoffs with a 10% reduction in sales.
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p>We need to create new jobs to stay ahead of the curve, and education is key to innovation that will not only create the job but also provide the workers with the skills to perform the job. Unfortunately, we have been too quick to export jobs from the bottom without being quick enough to replace them with new jobs.
is a piece of the future dystopian fascist social experiment called New Songdo.
Highly unsustainable in it’s galactic energy wasting capacity to link everything to a total surveillance electronic network.
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p>The manufactured economic crisis was simply engineered to further oppress people. That is the fact and that really is how simple the entire affair is.
Wasn’t there supposed to be a nuclear war with Iran last year?
Two years ago…early April actually.
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p>Next year we’ll all be paying in “Ameros” after the dollar is eliminated, BTW. This will be eased, of course, by the massive superhighway being built from Mexico to open America’s doors to illegal immigrants.
will we be allowed to buy anything with any currency.
http://axisoflogic.com/cgi-bin…
this site helpful, too.
after an oil inventory. Most difficult pumping from radiation dead zones.
cost/benefit including ripple effects of saying a company vs. the costs of creating a job or a new company?
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p>When I hear about a long time manufacturer in our state shutting its doors after a 100 years, never to reopen, I wonder what tax credits or other supports might have saved that manufacturer or jobs?
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p>What about the “local case study” of Good Time Billiards? The landlord majorly upped the rent, expecting an upscale retailer to go in, and then…the economy tanked.
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p>How many jobs did Good Time Billiards sustain? Anyone know?
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p>The owner put his collection of heritage games, which cannot be created into storage. He secured a line of credit, found a new location – then came the credit freeze, and the line of credit was yanked, the new location lost –
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p>The owner of good time billiards sold off his irreplaceable set of games and equipment. Now Good Times is really really gone.
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p>How many jobs did that cost? How much tax income was lost to Somerville and what were the ripple effects?
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p>If we work together to save jobs, ultimately, isn’t everyone the winner? Mind, my “Good Time Billiards” story is all second hand, all from the grapevine of folks who will talk and talk when I am willing to listen.
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p>But, again, where is the fun or agency or will to help Main Street keep the jobs that are at risk, that are already ongoing?
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p>Of course I know not all jobs are saveable, but surely some are.
If we do not protect what we HAVE, will future enterprises make up the difference?
The point is, small business preservation ought to be part of the menu and I neither heard, nor seen, any evidence that this is, in fact, the case or even on the radar.
at Beth Israel on Paul Levy’s Running a Hospital Blog. Read the comments too.
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p>Be worth watching this public “town meeting” model to see if/how the wide range of workers can/will work together to influence management decisions and the decision making process.
36 comments, 8 voters! Sigh.
You pose a yes-no question and then give 5 different ways of saying “yes” (and one “no”). But the 5 are not mutually exclusive, even though you can only answer one of them.
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p>In other words, I guess what I’m saying is it feels like a push-poll, and not a poll to be taken seriously. And I say this as somebody who agrees with all 5 “yes” answers. So it’s really not surprising that nobody answered.
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p>Why is it important to you that people answer?