Global Labor Strategies

Labor and the Green Jobs of the Future

American auto workers and the UAW have been struggling – and even striking – to try to save their members' jobs.  In the last round of negotiations with GM and Chrysler the union won job guarantees for a segment of its shrinking membership. But tragically, most of the jobs it saved are jobs of the past, not jobs the future.

The UAW rescued jobs that will soon evaporate as the US transitions into a green economy.  Most are for building inferior gas guzzlers that not enough people want to buy. GM did announce during the negotiations that it would produce a new electric car called the Volt at a Michigan plant beginning in 2010. But according to some, the technology and the production plans are still very tentative. (It should also be noted that GM announced this week that it would open a major new research facility to develop green technologies—in China. GM’s US and Australian engineers who currently do this kind of work are worried.) By failing to mount a full scale challenge to GM’s product decisions and by joining GM in opposing stricter mileage standards, the UAW has helped make it likely that whatever jobs it “saved” under the new contract will soon be eliminated by environmental regulation – and global competition from vehicles with a smaller carbon footprint.

Job security for autoworkers no longer means simply limiting outsourcing, it requires shifting to cleaner, more energy efficient vehicles that offer genuine anchor for future job security. The UAW could have used this contract to demand that GM produce quality cars that address global warming concerns and that people want to buy. Instead, it let the automakers cast it in the role of “junior dinosaur.”

There is an alternative. Labor should actively promote the transition to a green economy. By doing so it can help create and retain decent union jobs with a future. The good news is that some parts of the labor movement are already hard at work on new strategies.

New York Times columnist Thomas Friedman, rarely a friend of labor, recently described the labor-backed Oakland Apollo Alliance’s successful creation of a "green-collar" union jobs program to train young low-income workers to install solar panels and weatherize buildings. A campaign by unions and allies persuaded the Oakland city government to kick in $250,000.  The effort has recently gone national, launching the "Green for All" campaign designed to pressure Congress to allocate $125 million to train 30,000 young people a year in green trades.

China's New Draft Arbitration Law

With China increasingly setting wages and working conditions for workers the world over, the ripple effects from changes in Chinese labor law are likely to be felt in each of our home countries. So head's up: new Chinese labor legislation is in the works.

The latest draft law concerns labor dispute mediation and arbitration.  Since Chinese workers lack the right to strike, arbitration has been one of the few institutional ways for workers to address grievances with their employers. But the current system is failing, triggering an increasing number of worker protests and social unrest.

The new draft was submitted to the National People’s Congress for its first reading on August 26, 2007.  It comes on the heels of the Labour Contract Law passed last August, which extended an array of basic rights for Chinese workers—including protections for temp workers, just-cause firing provisions, etc.

The arbitration law is designed to address a number of government concerns.  According to the China Daily, PRC figures reveal that “labor dispute cases in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.”

Is the US Leading the Race to the Bottom?

(A postscript to our analysis of the GM strike.)

A few additional bits of information about the recent settlements at GM and Chrysler have come to light this week. They add to the sense that the agreements are mile markers in the race to the bottom.

GM announced on Monday that it would save up to two-thirds on labor costs for new hires under its new agreement with the UAW. About 16,000 non-assembly line jobs will be reclassified as second tier jobs and paid under a separate wage scale.  In addition, second tier workers will not be eligible for GM’s pension or for retirement health care. The current hourly rate of $78.21 for wages and benefits for second tier jobs will be adjusted downward to $25.66 per hour. Apparently, workers currently in second tier jobs will keep their current pay rate but will be encouraged to retire or take a buy-out.

Assembly line workers will continue to be paid at the existing rate, but only those now employed will receive the GM’s current benefit package; new hires will not be eligible for the pension of the retirement health care.

GM and the UAW are currently negotiating a buy-out deal for all hourly GM workers. Up to 75% of GM’s workers are eligible for retirement in the next 4 years leaving plenty of space for lower wage new hires. Along with savings resulting from the Veba trust agreed to under the contact, GM says it could lower its ‘structural costs” by more than 25% of total revenues.

Wall Street loves this. GM stock has been trading at 3 year highs, although it dipped a bit this week.

With the pattern set at GM, the union turned its attention to Chrysler where, following a six hour strike, a similar agreement was reached. But there has been dissention within the union. While the union leadership approved the pact, it was not a unanimous vote. At issue for some was the lack of job guarantees and a failure to move temporary workers to permanent status as was done in the GM deal. Some members of the bargaining committee are urging Chrysler’s 45,000 US workers to vote no on the agreement. But no matter what the outcome of the vote, in the end auto workers will be earning significantly less in the future than they do today.

These settlements represent versions of what’s been going on for most workers for years. The reality is that auto workers are playing “catch down” to the rest of the working class.  This economic decline is reflected in a new Pew Research Center Poll that shows that 48% of Americans now believe the country is divided between “the haves and the have-nots.” This compares to 26% who believed this in 1988. Asked which group they were in, 45% said they were in the “haves”, 34% in the “have-nots” and 21% in “neither or don’t know”. Compare this to 1988 when 59% or respondents said they were in the “haves” and only 17% in the “have-nots”.

The perception reflects the reality. The richest 1% of families have doubled their share of national income from 8% in 1980 to 16% in 2004, not counting capital gains. Meanwhile, in 2006, median household income was still 2.1% below 1999 levels.

There has been hope in the labor movement that agressive organizing will make janitors and other low wage service workers the auto workers of the 21st century, earning middle class wages with good benefits in decent jobs. So far there is scant evidence that this is happening. On the contrary, evidence is mounting that auto workers--even highly unionized auto workers--will become the janitors of the 21st century as their wages and benefits are cut.

Today no group of workers, no matter how well organized, is immune from the pressures of globalization. Going it alone simply won’t work, nor will a trade unionism that limits its struggle to the bargaining table. Only a revitalized labor movement that links the organized and the unorganized in a broad social and political movement for workplace and economic justice can protect and extend the gains that labor has made over the last century.

M.O.

The GM Strike: Can the UAW Turn a Defeat into a Strategic Retreat?

The idea of a strategic retreat is an essential element of good conflict planning. Faced with an opponent that cannot be defeated or a situation in which victory would be pyrrhic, a strategic retreat allows you to withdraw from the field of conflict rather than risk losing everything.  A strategic retreat differs from a defeat because it is a planned, orderly, withdrawal from direct conflict that plants the seeds of future action even as it gives ground to the opponent. The UAW could have exercised a strategic retreat in its conflict with GM and the other auto companies. Instead its strike and contact agreement were just another skirmish in a decade long rout.

September’s strike was hardly an epic battle. One writer likened it to two invalids flailing away at each other with crutches.  Another, echoing a widely held sentiment in the press, wrote that the strike was “a fake”, called by the union to show a skeptical membership that it did everything in its power to get a decent contract.  In fact, after Wednesday’s 6 hour Chrysler strike, the New York Times wrote from Detroit, “ A new expression is making the rounds here in the nation’s automotive capital: “Hollywood strike,” as in, “just for show.”

The UAW is clearly in a fix. It is up against the epochal forces which are reshaping the auto industry and the global economy, forces which are gradually gutting union power and eroding work standards everywhere. Now, after decades of defeats, it seems the UAW has chosen to circle the wagons to protect its graying—and rapidly shrinking—membership as they hold on for dear life trying to make it to retirement. And the end is in sight for many: the average age of GM’s existing workforce is 50 years old, and 63.4% are eligible to retire in 5 years. In the process, the UAW has abandoned a significant portion of its existing membership—those employed in “non-core” jobs—and any newcomers to the industry, should there be any. 

It is a cautionary tale which should give pause to those who think that building union membership and increasing union density will lead to a revival of the labor movement.  Union density in the auto industry is over 50%--unimaginable in any other sector of the economy. Even in the lagging parts industry density is far higher than in the most of the private sector economy. In a world of globalized production national union membership and density does not necessarily translate into union power.

Is the situation hopeless? Not at all. The UAW and other similarly situated unions need to exercise a strategic retreat to regroup. We offer some suggestions about what that might look below. But first a look at the current settlement and some historical background.

Are Corporations Sacking Workers To Avoid China's New Labor Law?

A newspaper in China’s Guangdong Providence recently ran an article entitled "'The Labor Contract Law Made Me Lose My Bowl of Food." It relays the story of “a 50 year old worker Hua Yi, who was employed at a plant since 1996--until recently, when she was told there wasn't enough work for her. New workers, though, were hired in Hua's place. Another worker, A Yu, put in 21 years at a factory only to be informed that her work was unsatisfactory and fired. She was left to rely on her husband's 600 RMB per month salary to take care of aging parents and a daughter not yet four years old.”

As many GLS Blog readers know, last year US and EU corporate lobby groups launched a major campaign to block new protections for Chinese workers. They were successful in part—as one corporate lawyer put it “the business community appears to have had an impact…scal[ing] back protections for employees and sharply curtailed the role of unions”.  But their aggressive tactics also unexpectedly sparked major push-back from the international labor and human rights movements inside and outside of China.  This pressure forced companies like NIKE and others reverse their positions and support the new labor law, which was passed by the National People’s Congress in June 2007.

Good news right?  Not so fast. Recent reports like the one from Guangdong reveal that some companies are quietly firing workers before the new Labor Contract Law takes effect.  While passed in late spring of ’07, the new law does not become binding until January 1, 2008, giving employers a six-month window to continue to take advantage of China’s rights-free labor market.