Solidarity Whatever?: Labor and the Blogospere

One of the things that's always irritated me about the blogosphere is how the idea that people who work in a factory should be able to have the same living standard as white-collar occupations gets pissed on. I've always found that the worst hate is reserved for the UAW, which in general is lumped in with the management in Detroit whenever a discussion about the auto industry pops up. Like today on Daily Kos, from Kos himself.

For years, Democrats outside of Michigan tried to coax Detroit into making more fuel efficient vehicles. The automakers, the autoworker unions, Republicans, and Michigan Democrats all fought those efforts tooth and nail. Successfully.

At the same time as Markos is demonizing the hardworking men and women of the UAW as complicit in their own hardship, those same men and women get no praise for the time they put on the strike line to force force GM to make commitments to build more fuel efficient vehicles in the USA.

As I wrote last September, the reason that the men and women of the UAW went on strike was to ensure that the transition to more fuel-efficient vehicles would not come at the cost of their jobs.

UAW officials said the 73,000 UAW members who work at about 80 U.S. facilities for the nation's largest automaker didn't strike Monday over what many thought would trip up the talks: A plan to shift the retiree health care burden from the company to the union. They said they also didn't strike over wages.

They said union members walked out because they want GM to promise that future cars and trucks such as the replacement for the Chevrolet Cobalt small car or the still-on-the-drawing board Chevrolet Volt plug-in electric car will be built at U.S. plants, preserving union jobs.

GM was planning to shift small car production for North America to a plant in Reynosa, Mexico, going from plants in Michigan where the contract wage is $27 an hour to ones on Mexico where the wage is under $5 an hour. The UAW walked away from the negotiating table in order to get a commitment from GM that they would build the Volt and a new subcompact scheduled to come on line in 2010 in the United States.

Kos conveniently glosses over this fact when damning union workers along with management for the funk that the US auto workers currently find themselves in. And the truth of the matter is that the UAW won that fight. GM did agree to make commitments to manufacture fuel-efficient vehicles in the US.

The contract that the UAW and GM agreed to in 2007 included a list of the commitments made by the company to various assembly plants. Included among those are the Chevy Volt to be built Michigan, and a new subcompact hatchback to be built in Ohio.

(Click on the image for larger version.)

Now to make much sense of what these commitments mean, it helps to realize that all that Greek is actually the language that GM uses to describe its auto platforms. Auto platforms are the basic model on which a car is built, and are shared across GM brands. They allow you to distinguish different car sizes from the product commitments I posted above. The big changes are at Hamtramack and Lordstown, but even the larger vehicle lines are going to be shrinking and there's a push to make hybrids a more or less standard feature on the bigger lines.

And the truth that everyone hates to hear is that in terms of marginal gains, improving SUV mileage is a much better policy option than pushing for smaller hybrids.

At 15,000 miles a year (assuming city driving):

2009 GMC Yukon 4WD

Fuel Consumption

Non Hybrid (12 MPG)=1250 gallons
Hybrid (20 MPG)= 750 gallons

Fuel Savings=500 gallons annually

2009 Toyota Camry

Fuel Consumption

Non Hybrid (19 MPG)=789 gallons
Hybrid (33 MPG)= 455 gallons

Fuel Savings=334 gallons annually

Figures from www.fueleconomy.gov

In terms of reducing consumption a GMC Yukon hybrid is nearly 1 1/2 times as effective than the same effect applied to a Toyota Camry. The cumulative effect is even more drastic. And if we are going to get serious about reducing fuel consumption in this country, rather than tearing hardworking folks down, we should be looking at something along the Cash for Clunkers program proposed by economist Alan Blinder than bitching about how GM and the UAW are at fault for the state of the American automotive industry.

Here’s an example of how a Cash for Clunkers program might work. The government would post buying prices, perhaps set at a 20 percent premium over something like Kelley Blue Book prices, for cars and trucks above a certain age (say, 15 years) and below a certain maximum value (perhaps $5,000). A special premium might even be offered for the worst gas guzzlers and the worst polluters. An income ceiling for sellers might also be imposed — say, family income below $60,000 a year — to make sure the money goes to lower-income households.

The numbers in this example are purely illustrative. By raising the 20 percent premium, lowering the 15-year minimum age, or raising the $5,000 maximum price or the $60,000 income ceiling, you make the program broader and costlier — and create a bigger stimulus. By moving any of these in the opposite direction, you make the program narrower, cheaper and smaller.

I was actually trying to develop something along these lines to enter in a policy competition at a thinktank earlier this year. I like what Blinder has put forward, but I think that he fails to recognize a key aspect here, which is access to credit. If Blinder's plan were matched with a government guarantee to purchase a limited amount of the output of smaller, fuel-efficient vehicles being brought online by GM and Ford it could have two effects.

1) It would help underwrite the transformation of the American automotive industry in a way that wouldn't prompt WTO action. Under the WTO government spending is exempt from most trade litigation. So you can "protect" the American manufacturing base and well paying jobs without sending the WTO into a fit.

2) This can put a lot of money into the hands of lower income folks, who will most likely spend it, and in doing so boost the economy. It's a long term effect, because the savings at the pump occur every year. In short its a capital expense not a consumption expense.

And this can be matched to Dr. Blinder's program. Contract with GM and Ford to make an affordable hatchback cheap. Let's say $10,000. Government buying in volume can go a long way to driving prices down (and paying the cost for GM and Ford to retool their plants). So let's say we have someone come in with a 1987 Chevy Silverado. It's worth about $2,000. I'd say double the value. So you give the owner $4,000.

And then, you have a 6 year no interest loan on the remainder subsidized by the government. $6,000 for 72 at 0% is a monthly payment of something around $100 taxes and insurance included. And you can really help lower income folks out this way. Reliable transportation makes it much easier to find a better job.

And it helps to preserve what's left of the US auto industry by paying most of the transition cost for retooling plants to more fuel efficient vehicles.

And the point in the end?

Instead of bitching about what's wrong, why don't we talk about how to make things right?

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Comments

That's BS

Although since when have some bloggers written things where they have no idea of what they are talking about!

Yes, that was the deal, GM was going to shut down US plants and move manufacturing overseas for newer models.

And they just did that, as usual. They don't simply retool and keep the same workers, for their brains are stuck on labor arbitrage versus being a well run corporation.

I agree with you, the attitude towards blue collar workers is pathetic and completely wrong headed. What white collar don't see to get that there for the Grace of God Go I and it's proven to be true, now occupations requiring years of education and training are being offshored. They cling to the belief that somehow a college degree or somehow being smart exempts one from being looked at as a head, a worker bee and that is completely wrong.

On top of it, who said one has to be a genius to have economic security and stability? It sure wasn't FDR!

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Kos

Kos is perpetuating the very sort of elitism that turns the blue collar vote away from the left. Not surpirisng - Kos is an unapologetic globalist. Little wonder that the dems have a serious issue in the industrial midwest in winning over the wroking vote.

Kos is parroting the Ricardian model of paying workers as little as possible, instead of the Henry Ford model that the auto industry was built upon creating the middle class.

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globalists

Right, well more the reason to spread out and be the blogosphere instead of one site. Whoever owns the blog can dictate the overall agenda of the blog.

That's why on EP it's a voting system on the front page instead of certain people on the front page.

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This is why I'm in favor of tarriffs

You know, if even ailing GM and other so-called American companies want to continue to play wage arbitrage, well I say let 'em. Then we impose tariffs that negate any benefits they received from the outsourcing. Wait..we can't do that because of the WTO? While I highly doubt even the Democrats would pull us out of that insidious corporate wage brothel masquerading as a "free trade" group, we have other avenues. Simply replace tariff with taxes. This is why I never was for a "fair tax" or a "flat tax," for it didn't give us leverage on these multinationals. Whatever gains you made closing that plant in Ohio and opening up in Mexico, you're not only going to give back to the tax payer, but you will be charged more to compensate for any unemployment costs the tax base had to incur.

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VAT/BAT

Look over in the middle column. There blog trade reform has some organizations behind it and that's what they propose. These would be legal under the WTO (have a chance) and work somewhat similar to tariffs. Also, be aware that "emerging" economies and China is classified as one believe it or not, can set high tariffs.

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Did you catch the Economist's take on the failed Doha round?

It's all China and India, they saw where the train was heading. The world was gonna do to their agribusinesses what they did to our manufacturing. So what do they do now, they play the anti-free trade card. You know what, I'm glad they did, because now this runaway train we dub free trade will finally turn course! The ride was never "free" and the path was never fair.

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link?

I didn't, but I can tell you India is demanding guest worker Visas claiming it's "services to be traded" and even worse the US said "ok". they failed on farming. Even worst than that, our Democrats, yes Democrats are trying to get 1/2 a million Visas for more guest workers. Unreal and that's the "labor" party? That will absolutely decimate tech workers across the board. The work areas only employ about 1.3M total in the US (I think) but it's like replacing half of US workers with guest workers!

I'd be surprised if the Economist is waking up although there are a lot of economists, the good ones, looking at the stats and writing some frightening projections.

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India/China and a group of Caribbean

countries split from the South American agro-exporters that have traditionally been partners in trade talks. India wanted to protect their farmers.

The Indian and Chinese governments are worried about social unrest if they allow their peasant agricultural sector to be crushed.

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When Delphi

was undergoing the selective bankruptcy (they were allowed to declare bankruptcy on only their US subsidiary, which they bankrupted by shifting all the global losses onto US books, and moving the profits offshore) I thought that going after the corporations intellectual property.

What I mean is that if the company wants to claim bankruptcy in the US let them, but transfer the physical plants, the rights to the brand name and product designs in the US to the workers. And let them make a go of it selling the products through an ESOP.

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Kos is an idiot.

Ever read anything about the Sugarscape or in the new field of '...agent based generative social science'? Or The Origin of Wealth?

Basically, Kos got big in the 'sphere because he got there first and with his resources deriving from his sports blogs he was able to dominate. None of this means he has the skillset, knowledge practical and theoretical, nor character to lead a progressive movement. He does not.

We see that now with the disaster of Obama looming.

More importantly we see 'Exodus' the movement of many who are sick of the ignorant ranting at CheetoLand and the rest of the top ten political blogs not only to new blogs The Confluence, Anglachel's Journal and Allegre's Corner but....

And this is my main point.

Here.

To economic blogs where folks are grappling with the theory and practice of a science about to explode in in it's effects on not only policy but the citizenry's ideas about social and economic justice.

If you accept that the L-curve distibution of income is what is the ineveitable and natural result of the conservative 'free market' mantra then you be wantin' you some....

Big time Gummint regulation.

No messin'

Hi Robert, good to see some folks contributing some thoughtful stuff here.

Gotta love those neandertal UAW dudes a little....

They brought us the weekend.

More than Kos will ever do.

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'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'

While I agree with you

Let's not get into one of those personality wars or even "what that other blog is doing". There are certain wars that go on in the blogosphere that to me have little to do with what the Congressional record is, the positions are, the policy is, the money behind a candidate is, what's in the national interest is, working America's interests and probably #1, what is in those details that the Devil loves so much.

What are we doing? Well, we are trying to bring about civil debate, discussion and awareness on all things economic and get some fact based policy as well. We don't give a rats ass what those other political blogs are doing.

Consider us the Switzerland of blogs. The only thing we're interested in is the money.

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