Wheels on Fire

It's another weekend, another week of bad news. In the Reuters photo above, a mother and child walk past burned out cars in Greece, where street riots continued all week after police killed a 15-year-old during demonstrations against job losses, wage cuts, and pension reforms. 20% of Greeks live in poverty. On Friday, demonstrations spread to France, Spain, Germany and Denmark.

Here at home, the Republicans blocked the economic package that would at least delay a major auto layoff, demanding that autoworkers first make economic concessions. The global stock market fell. The White House Treasury said it will step in. “A precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destabilise our economy at this time,” said Dana Perino, White House spokeswoman. The global market rose again.

Gwen Ifill asked, "so how did this happen and where do we go from here?" At least she asked the right question. I found the best analysis of what went wrong and why Detroit matters on the BBC UK news site.

What a lot of junk talk in the air. Some suggest U.S. auto workers should be willing to lower incomes to be more comparable to the incomes of Japanese auto workers. Or maybe comparable to the incomes of auto workers in the south. Some professors are grumbling that lower educated workers seem to be making more than highly educated academics.

I've been a professor. Professors work a lot harder than most people believe. Sometimes they have to grade papers while trying to watch Sunday football. But professor salaries are based on 9 or 10-month contracts and they make more if the take work during summer semesters. Even professors make more in the unionized north than in the south.

And did you know that the "hourly compensation" numbers being tossed around are not hourly wages? They are hourly production costs that include all wages, shift differentials, overtime, benefits, pension plans, health insurance, and payroll taxes. The $70-75 an hour number being tossed around includes all of those costs to current employees plus "legacy costs" - payments made to retired autoworkers who have pensions and health benefits.

In reality, unionized American auto workers make more like $14-35 an hour, have health insurance, and pensions. A series of negotiations over past decades have held back pay raises in return for protected benefits. In the 2007 contract, new hires start at $14 an hour. Employees with seniority make $28. In the 1980's autoworkers were asked to make a "shared sacrifice" for the sake of the American economy. They did. Recently Ford executives explained that executives are no longer expected to share the sacrifice. The current high salaries for Detroit auto executives are calculated on the basis of global profits from plants like the newUS auto factories in Mexico. Hey, I have an idea - let's save the economy by lowering all of our salaries to be more competitive with Mexican workers.

Anyone else notice how quickly the tv talking heads' indignation at the Big 3 execs arriving in their private jets was shifted to indignation at the idea that American factory workers should make a decent living?

I say, wrongly accused.



somebody wrote me a nasty letter
but they didn't sign their name
i think i know who wrote it
well i recognize that hand
its getting warm
oh so warm
so warm
on a winters day

im reading backwards
on this page
hoping to defend me
if the devil comes
ive been wrongly accused
ive been wrongly accused

Wrongly Accused, by Otis Taylor