The rhetoric surrounding the auto industry this holiday season is deja vu all over again. I grew up in a suburb of Detroit. My parents loathed Walter Reuther, legendary head of the United Auto Workers. My father, a general surgeon, remarked on several occasions that Reuther, once wounded in an attempted assassination, was fortunate not to have landed on his operating table. He viewed Reuther as a communist whose government health care proposals would disrupt the voluntary doctor-patient relationship. Reuther’s union “rewarded laziness” and would destroy the free markets that gave us new autos, ever more comfortable homes, and modern appliances.
Some Senate Republicans and many pundits must have been at our dinner table. Anti-union slurs have become gospel truths. Take the infamous $70 an hour wage and benefit costs. The number comes from adding pension and health care costs for other retired workers.
General Motors must pay these costs, but they don’t benefit current employees. GM’s base pay is $28 per hour, and health and retirement costs push the figure to about $40. Even these $40 an hour workers are a dwindling bunch. The infamous UAW allows the auto companies to hire new workers at half the standard base wage.
From a broader perspective, that suburban, consumer society my father admired was hardly a “free market” miracle. In the 1930s, General Motors, Standard Oil and Firestone fashioned a monopoly consortium. They purchased urban trolley systems and converted them to less popular GM buses, thereby creating immediate opportunities and longer-term auto markets.
Even the destruction of transit and the growing use of credit and manipulative mass advertising would not have saved GM. After World War II, many feared that conversion to peace would lead to renewed depression. Cold war armaments filled some of the void, but so too did unions. UAW sit-down strikes at GM in the ’30s had gained union recognition and forced labor law reform, In the early ’50s, the UAW won regular productivity bonuses, cost of living adjustments and unemployment protection.
UAW’s bargaining success was crucial to the U.S. economy. UAW contracts encouraged gains not only by other unionized workers, but also from employers seeking to avoid unions. These wage gains enabled mass consumption. So too did the tax-and-spend interstate highway system, matched in many states by expansion of state roads. Thus a corporate monopoly, a public private highway lobby and relatively strong unions gave us modern the consumer society.
That society, however, had a darker side. Productivity gains in auto plants often depended on speedup and other inhumane techniques. Quality and even long-term productivity lagged. The Big Three, often aided by the union, used their political muscle to wall off international competition and fight environmental standards and thus reduced need for domestic innovation.
The UAW’s role today is problematic, but not in the way most pundits assume. Never a communist, Reuther’s retreat — once autoworkers had their health coverage — from his social democratic vision of health care and guaranteed annual income for all seriously weakened these causes. U.S. workers have become ever less secure.
Many companies, such as GM, are crippled by health costs. Multiple UAW wage and benefit concessions for new hires over the last decade have not made GM more competitive. They have weakened labor solidarity and ratcheted down all working-class wages.
What’s good for GM could be good for America. Our nation might build a new arsenal of democracy, one that is green and truly democratic. It would emphasize not only alternative fuels but also expanded public transit.
My holiday fantasy is that if Congress fails to enact broad, green public works or continues its undemocratic obstruction of worker rights legislation, ’30s lessons might be relearned. Just as at Republic Windows and Doors, workers could sit in.
This time, however, they might demand fundamental changes. Auto giants should be re-chartered. Workers as well as public interest groups must be represented on corporate boards and have an effective voice in product design and financial planning. In such a context, even in desperate times, local governments and businesses could trade goods and services for new transit and alternative vehicle production.
Right now, this is a fantasy. But during holidays I need my fantasies. Even amidst a sinking economy and moribund, undemocratic politics, our people retain surprising potentials.
John Buell is a political economist who lives in Southwest Harbor. Readers may reach him at email@example.com.