The recent two-day strike of 73,000 UAW members at General Motors and the resulting labor accord are nothing short of monumental. The tentative accord reached between the two long-time adversaries models a bold approach to restoring U.S. manufacturing competitiveness and mending the nation’s unraveling private social safety net. But it’s still a short-run solution for retaining cradle-to-grave benefits and restoring U.S. manufacturing power.
The strike and accord occurred as the gap between the haves and have nots continues to widen in America. Between 2000 and 2006, the richest 20 percent of Americans enjoyed a 1 percent increase in their real incomes, while the incomes of the rest of the nation decreased by 3 percent, according to the U.S. Census Bureau. And the number of Americans with private health insurance benefits decreased by 7 percent.
As global economic competition threatens U.S. manufacturers, manufacturing jobs, along with the labor movement whose bargaining gains a half-century ago wove together the nation’s private social safety net, are disappearing. Around 1950, when American manufacturers dominated the market, the UAW and U.S. auto giants bargained for an employer-based, cradle-to-grave benefit package that quickly became the gold standard among unionized and non-union corporations.
Today, the shrunken labor movement nonetheless remains the chief force for reweaving the nation’s unraveling private social safety net, helping millions of working people protect their American dream.
The accord – that awaits final UAW membership ratification – reportedly provides for new GM investment in American factories, maintains current job levels and shifts GM’s financial liability for the health benefits of retirees and active workers to a “voluntary employee benefit association,” a novel, independently-administered health trust fund arrangement. Over the four years of the agreement, workers would receive no wage increases, except for some bonuses, and GM can institute a two-tier wage system, a cost-cutting arrangement that many unions oppose.
The accord hardly jumpstarts workers toward the American dream, but it may offer a model for slowing down the growing divide between rich and poor. By cutting costs, GM may become more competitive, and by maintaining job levels and reorganizing health benefits, millions of retirees, active workers and their families may live longer and healthier lives.
One company and one union alone cannot revive American manufacturing, repair the private social safety net and reduce the gap between the rich and poor. What is monumental about the UAW-GM tentative accord is its on-going pursuit by adversaries of a shared and lasting destiny through collective bargaining.
In order for this model of employment relations to spread throughout the U.S. economy, more non-union workers will have to unionize, employers must stop intimidating workers during organizing drives, and the labor movement will have to double its efforts to organize the lowest-income workers, such as low-wage service workers, ethnic-racial minorities, women and immigrants, whose real incomes declined the most since 2000.
In a non-union America, the prevailing model of employment relations in the new millennium will continue to polarize our nation and make the American dream unattainable.
Dan Cornfield is Professor of Sociology at Vanderbilt University and Director of the Vanderbilt Center for Nashville Studies. He writes about work, employment, and labor issues and is editor of Work and Occupations. This article was originally published in The Tennessean on Oct. 2, 2007.