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The Delphi Incident
Salaried, white-collar, non-union employees of Delphi (the former General Motors-owned auto parts conglomerate), in Warren, Ohio, were recently treated to a bitterly cruel lesson in the benefits of belonging to a labor union.
As part of GM’s government-supervised bankruptcy, Delphi’s salaried workers were stunned to learn that a union contract trumped all that touchy-feely “team building” gibberish they’d been fed over the years. It was revealed that, while Delphi’s union members would be receiving their full pensions, a significant percentage of Delphi’s white-collar employees would be receiving only partial ones.
Although the PBGC (Pension Benefit Guaranty Corporation), by law, insures company pension plans, PBCG payouts are tricky; they’re arranged in such a manner that maximum “caps,” based on complicated formulas that take into account an employee’s age and level of benefits, come into play. Under the PBGC, older workers do far better than younger ones. And in regard to the Delphi deal, those employees caught in the middle—in their fifties, with many years of service, but too “young” to retire—were hit the hardest.
No one on labor’s side is gloating or rejoicing. Not only did the unions who represent the workers—United Auto Workers, United Steelworkers, International Union of Electrical Workers—not want to see Delphi’s salaried employees get shafted, the union’s legal team has offered to help recover what’s coming to them. Which is ironic, given how unlikely it would have been for this salaried, white-collar “tribe” to have reacted similarly had the shoe been on the other foot.
Not to sound cynical, but people need to be reminded of the stark fact that “muscle,” more than any other factor, is what gets things done—even meritorious things. Lots of stuff is capable of rousing people’s interest, but it takes muscle (or the perception of it) to close deals. Politicians, soldiers, entertainment agents and labor union reps know this better than most.
The notion that important things get done simply because they’re the “right thing to do,” is a bit naïve. Take the Civil Rights Acts of 1964, for instance. While getting that legislation passed was unquestionably the “right” thing to do, it wasn’t passed on the basis of its intrinsic merits; rather, it was passed as the result of deal-making, arm-twisting, lavish promises, trade-offs, and serious threats from people with muscle.
More recently, the same dynamic was seen in the success of the so-called “surge” in Iraq. The reason the surge worked wasn’t because America sent in more soldiers or different soldiers or better soldiers, or because we finally convinced recalcitrant Iraqis to jump on the Democracy bandwagon; rather, it worked because the U.S. offered to pay approximately 750,000 Sunni insurgents not to fight. It worked because these hold-out Sunnis had sufficient muscle to insist that they get paid….or else.
And the “or else” was simply too gruesome for the military command to contemplate. So the American taxpayer put these Sunni insurgents on the payroll. And that’s how the surge succeeded. Mind you, there’s no shame in using money to get a dirty job done. There’s no shame in paying your way to success—paying your way to peace, paying your way to prosperity—so long as you don’t pretend that you succeeded by other, more noble means.
Which brings us to organized labor, which isn’t complicated. Unions were formed by working people who shared a common goal; they coalesced by attracting people with similar needs and skills, people facing similar obstacles, and they flourished only when they reached a critical mass. Simple as that.
A thousand random janitors will forever be at the mercy of a pitiless market, with the low bidder always getting hired, and wages being driven inexorably downward. But a thousand janitors who are organized, who belong to a collective, who refuse to work for less than a decent minimum wage? That’s another story.
The reason labor has lost so much of its influence over the last thirty years isn’t because America shifted ideological gears, or because working people suddenly decided to go it alone—decided to avoid workers’ collectives, to turn away from the most desirable, safe and well-paid jobs in the community and go with the crappy ones instead.
Rather, labor lost its influence because (1) the country abandoned its core manufacturing sectors, (2) the Republican party, led by Ronald Reagan, launched a furious attack on unions at a time when, arguably, they were most vulnerable, and (3) deregulation of trucking made it feasible for businesses to move to anti-union, right-to-work states. All of this—coupled with the dread Rise of the Outside Contractor—resulted in labor’s membership rolls plummeting. There were other causes, but these were the critical ones.
And with that staggering drop in membership, labor unions lost the patronage of everyone who mattered: the politicians, the academic wonks and the media outlets who regularly courted them. When you have the whiskers to get 200,000 workers in a major industry to walk off the job, people tend to listen to you. Conversely, when you have nothing to back up your threats except empty saber rattling and some old press clippings, people tend to brush you off.
Thus, the Delphi incident is both a cautionary tale underscoring the importance of muscle, and an exercise in nostalgia, harking back to a time when labor unions guaranteed working people a place at the table. And even though the “right thing to do” was to give those salaried Delphi employees the pensions they deserved, it didn’t happen. It didn’t happen because they weren’t union members.