There are plenty of people in this country who would desperately love to see all unions go away. Over the course of the congressional hearings on an automaker bailout this week many of those people have continually brought up the un-cited "fact" that UAW workers get $70/hour in wages and benefits as opposed to about $40 or so for non-unionized workers at the foreign owned transplants. While the UAW and the Detroit automakers have made more than their share of mistakes and deserve a good chunk of the blame for what is happening, there is a major problem with this particular argument. IT'S NOT TRUE!

UAW members do not take home $70/hour. That is the automaker's cost per active employee. What's the difference? The latter figure is total spent by automakers on wages and benefits divided by the number of active employees. The cost of benefits includes the pensions and health care costs for the hundreds of thousands of living retirees in addition to active workers. Those punching the clock every day, don't get a dime of that. As of last year, UAW workers made an average of $28/hour in wages + $10/hour in benefits. The rest went to retirees, a cost that is borne by the automakers. The reality is that unionized and non-unionized autoworkers actually make very similar wages and benefits. Continue reading after the jump.

[Source: The New Republic, via DailyKos]


You might be wondering why the UAW has had such a hard time organizing the US factories of Honda, Toyota, Nissan and others. A major part of it is because the workers there don't see a need to join. They already make as much as their unionized counterparts. The fact is that in industries like this, companies will often tend to match the compensation offered to union workers just to keep the union out. When I was growing up in Hamilton, Ontario, Canada, there were two big steel companies in town, Stelco and Dofasco.

Stelco was unionized and Dofasco was not. Both companies paid workers essentially the same. My father worked at Stelco and went on strike three times over his 30 years there. Every three years when there was a new contract at Stelco, Dofasco automatically matched it for their employees. If the United Steel Workers at Stelco didn't pay the price to get those raises do you think Dofasco workers would have got them? Not a chance. It's exactly the same with the auto makers.

Since I can't find the precise quote at the moment, I'll paraphrase the late Studs Terkel, who asked someone who was anti-union, "Do you like going home from work at 5 o'clock? Do you like having health care benefits? Do you like having paid time off? You may not be in a union, but if you have any of that, you can thank union workers for it." Before unions fought for reasonable work weeks, health care, and workplace safety in the first half of the twentieth century, few Americans had any of that. Don't kid yourself that big corporations would give any of that from the goodness their hearts.

Yes unions have gone too far at times, but as we have clearly seen with the financial collapse in the last few months, non-union financial "geniuses" are actually far more to blame for the current predicament than those who punch a clock every day. The real reason so many are pushing for chapter 11 is not to save the automakers, because that will almost assuredly not happen. They want to break the union contracts. The problem is doing that will ultimately cost this country a lot more than $70/hour.

It's time to stop demonizing and start addressing the real root causes of this problem. That is the fundamentally flawed mechanism we have for paying for health care in this country and the ability for people to finance the purchase of vehicles. Until we put the screws to the financial "geniuses" things will only get worse.