astro’s figure includes benefits, which add anywhere from 50-100% to the base hourly salary.
And that’s much of the answer, especially when added to what msmith537 said.
We take the way the auto industry works for granted today and forget entirely about its history.
The big auto companies, led by Henry Ford, were militantly paternalistic and anti-union well into the 1930s. Ford was becoming increasingly paranoid by this time and the Depression seems to have unhinged him. (A broad generality, yes, I know.) The auto industry was at that time the largest industry in the country and the driver of much of the economy. Ford and GM were vertically integrated, owning everything from the coal mines to steel factories to parts manufacturers - and not just in autos; they had major brands of appliances and other uses of steel as well. This meant that they had enormous influence in the whole industrial northeast.
And they used the Depression to hit workers hard, with mandatory large wage cuts, layoffs of a third of the workers, and hardball tactics all around. Labor violence was frequent and Ford especially had squads of goons that acted as a private army. The other firms followed his lead: I don’t want to minimize their culpability. In fact, the takeover of GM’s Flint plant was the catalyst for change and the eventual recognition of unions throughout the industry.
When the war hit, auto plants turned into arms factories and were critical to the war effort. Yet with the huge numbers of men going into the service, workers were hard to find and harder to keep. Leaders in the industry realized it was to their best interest to make peace with the unions. Besides, the country was booming and money from the government was flooding in.
More of the same occurred after WWII. All the money that had nowhere to be spent during the war (no consumer autos were built for about three years from 1942 to 1945) was now available and people needed transportation.
Besides, the rest of the world was either destroyed, exhausted, broke or all three. There was no external competition for a product that everybody wanted in the midst of growing demand and general prosperity. And a hugely increasing population: that baby boom you might have read about now that it’s 60.
This was the be the American Century, after all. Henry Luce of Time magazine said so. After two decades of misery, a golden age had arrived. Factory production would allow those who had suffered want now be part of a consumer society that would spread all over the world. Jobs were for life, and the haunting memory of unemployment, bankruptcy, lack of retirement or health benefits, lack of medical care, lack and need and want, were all to be things of the past.
And, you know, for the majority of the population, all that came true. It is better to be rich than poor, the working class joined the middle class, affluence became the norm instead of a hopeless dream.
The problem was the usual one. They were extrapolating off of one data point: the 1950s. The 1950s were unsustainable. The rest of the world survived and began to prosper, in large part, ironically, because of our largess. They built newer plants with better manufacturing techniques. They subsidized their industries so that they didn’t have the costs of paying benefits. They started competing where we briefly had a monopoly. And the industrial society obsoleted itself.
But the unions and the auto companies were stuck. Nobody at the top of the Big Three in Detroit believed for a second that foreign competition would ever be more than a sliver of the market. And the union leadership remembered the bad times all too well and weren’t about to give up their gains, even if the membership would let them. And they wouldn’t. Nobody in their right minds gives up lifetime employment and retirement benefits because of predictions that several decades down the road the next generation might not be able to share the same perks. They had had predictions for decades and all of them turned out to be wrong.
This is a universal condition. Europe and Japan are facing exactly the same issues because of exactly the same deals they made with that generation of workers. Nobody in any western country would ever allow the horrors that blasted the world economy for two decades starting in the 1930s to return.
The problem is simply stated. We locked in outcomes based on rational decisions made as to the conditions of the time. Conditions have drastically changed, but the contracts survive. What are the possible solutions? Well, that’s an issue for GD, but there are no good solutions that don’t make losers out of tens of millions of people. Who decides which group of tens of millions of people will lose out? Nobody wants to make that decision, and nobody wants to enforce that decision.
No decision is a decision, as the saying goes. The result is that decisions are made for people who are unwilling to make them themselves. And tens of millions of people lose. Is it the same group as the others? Larger? Smaller? Who knows? Those are arguments.
But get used to the arguments because exactly the same kinds of who wins and who loses decisions have to be made on immigration, on Social Security and Medicare, on health care, on the economy, on oil consumption, on everything. The magical conditions of the 1950s that allowed everyone to win will probably never roll around again. But they’re now the past that remains in the collective memory. Talk about fighting the last war. We may not see answers until a generation from now, when a different memory is the cultural norm, allowing different decisions to be made. Not necessarily good decisions, of course. We never know until it’s too late whether the decisions are good ones or not. There’s too much past and never enough future.
