Abstract

Last January, the New York Times reported that assembly line workers at Detroit automobile factories, who have been earning around $28 per hour, would be "bought out" and gradually replaced by workers earning as little as half of that. This would save companies like Ford and Chrysler $30,000 per lower paid worker per year, in addition to reductions in benefits. It would also mean—though this escaped the Times reporter—that output per hour (productivity) would remain unchanged or, more likely, continue to improve (as it has hitherto in the industry). "Two-tier agreements, double-digit wage cuts, health care cost shifts, work rule changes, and defined pension . . . rollbacks have occurred in one major contract settlement after another. . . . In one industry alone, airlines, wage and pension concessions given back to employers since 2001 . . . totaled over $15 billion," writes Labor Notes (January 2008). Yet, output per hour in air transportation rose at an average annual rate of 2.9 percent between 1987 and 2005, according to the Bureau of Labor Statistics (BLS); it rose 3.8 percent in motor vehicles manufacturing. These two examples illustrate what is happening to the bargaining power of trade unions—a steady weakening, a loss that began with the defeat of the air traffic controllers strike in 1981 by Ronald Reagan's administration, a loss, therefore, that is political in nature. And it is in this sense that we must view the widening gap between the advances of productivity and the stagnation of working people's incomes.

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