A few stories have caught my eye in the last few weeks – and as long as I’m dropping logic on the state of the State (Michigan, that is) it’s appropriate that I beat on General Motors and the UAW, who together have basically caused (and perpetuated) what, by all accounts, appears to be a single state recession.
You see, so much of our economy is crucially tied to the automaking industry, and the Big Three, in general. And as they go, so does the rest of the state. FWIW, the following is a list of some of the measures by which General Motors, in particular, has acted in concert with the UAW to destroy the State Economy. It is by no means a comprehensive list – and bear in mind that they are but the symptoms of the disease.
Along with the crippling health care costs (no pun intended) that are estimated to add approximately $700 to the price of a new GM vehicle, it has been reported in the Detroit Free Press that the automaker spends $17 million annually on ED treatment like viagra and cialis. Seventeen Million might seem like chump change to a company like GM who is hemmoraghing cash lately, but it all adds up. (archived headline: here, if above link doesn’t work)
The clincher of course: wages are indeed sticky downwards, and probably moreso when a union is involved. Without a union, the employer can just hire a new work-force by attrition. With the union, howeve, the new work force is the same as the old one:
“Once you have these benefits, it’s very difficult to take them away,” said Jim Sanfilippo, president of AMC Inc., an industry consultancy in Detroit.
If you don’t believe that Union wages are wholly without merit, how about, starting wages of $25 per hour to be a janitor. Which translates $52,000 annually, plus benefits. This is more than most accountants and nearly all teachers can hope to make starting their careers, and they’ve gone to school for 4 years. (an aside: I worked a summer gig as a custodian for the local school-district. The Unionized full-timers started at $14.85 and maxed out at about $20, plus an annual COL increase, which is by no means shabby for a high-school education.)
While I’m talking about Janitors and GM, have you heard the much publicized story of Lillian Winkel? She’s in her 80s, and she is a janitor for GM. She has survived three husbands, and has countless children and grandchildren. She collects social security. And General Motors pays her $74,000 per year to mop floors.
“At nonunion plants, somebody cleaning offices couldn’t dream of making the $74,000 that Winkel earned last year. Including the pension and Social Security she also gets, she received $114,000.(emphasis mine)”
No. But at non-union plants, anyone can apply for the job. The unions of course are trying to champion Ms Winkel’s case, but they categorically neglect the several workers that would gladly subsist on a fraction of her largesse.
Previously:
Big Auto, Big Trouble
All the Eggs, Just One Basket
