UAW loses power to set example
American workers once looked to Detroit to see their future. That's no
longer the case.
This year's contract talks, under way between the United Auto Workers
and the Detroit Three automakers, may decide the fate of the domestic
auto industry. But economists and labor historians agree that UAW
contract talks no longer set the nationwide agenda for the broader
American workforce as they once did.
Paul Fuller, 44, of Temperance, a nearly 20-year veteran of Ford Motor
Co.'s assembly plant in Flat Rock, said the public needs to realize that
good pensions and benefits don't come automatically but must be earned
through hard bargaining.
"I think maybe it's taken for granted that that stuff is automatically
given to employees," he said. "I don't think the public is really aware
of the impact that it's going to have on retirements and things like
that. By the time it does, it's going to be too late."
Dana Johnson, chief economist of Comerica Inc., said Detroit's influence
on the U.S. economy has waned with manufacturing on the nation's
"I think the big industrial unions find themselves in a different kind
of position than they once did," Johnson said. "They're not the
pacesetters of the overall economy."
Few unionized today
From the 1940s on, particularly in the 1950s and '60s, the UAW won
benefits that soon became standard for a broad swath of the American public.
Those included everything from paid holidays for production workers to
company-paid pensions and health coverage. The UAW either won those
benefits first in Detroit or popularized them in landmark contracts with
General Motors, Ford and Chrysler.
"The idea of pattern bargaining meant not just the pattern for the
unionized industry but for other workers as well, and it had a big
ripple effect throughout the economy. But that's no longer the case,"
said Nelson Lichtenstein, a labor historian who has written about the UAW.
A professor at the University of California at Santa Barbara,
Lichtenstein argues that low-cost, low-wage retail giant Wal-Mart now
influences U.S. pay scales more than the UAW contracts. Just as historic
UAW contracts once built up the U.S. middle class, Wal-Mart's low pay
rates and antiunion policies may now be eroding what it means to be
Fifty years ago, when the UAW helped set the agenda for the broader
American workforce, about one-third of U.S. workers labored in
manufacturing, and roughly a third of all nonagricultural workers were
unionized. Today, not one in 10 workers toils in a factory, and fewer
than 10% of workers outside government belong to unions.
Peter Morici, a professor of business at the University of Maryland,
said those trends diminish the significance of this year's UAW talks.
"I don't believe this has any great significance for the U.S. economy
other than the survival of the industry itself," Morici said. "I don't
believe this is setting the pay scale for anyone."
Foreign automakers set tone
With the Detroit Three's market share dipping below 50% of U.S. vehicle
sales for the first time ever in July, the UAW's ability to dominate the
nation's pay-and-benefits agenda is shrinking still further.
According to an internal document obtained by the Free Press last
winter, Toyota Motor Corp. wants to move its pay toward regional rates
-- more in some parts of the country than in others -- to control costs.
Toyota and other foreign-based automakers operating in the United States
had sought to match UAW pay rates in part to fend off union organization
efforts in their plants, but the memo suggested a move away from that
If anything, UAW concessions this year may set a pattern for further
givebacks by other American workers. Peter Rachleff, a professor of
labor history at Macalester College in St. Paul, Minn., has worked
extensively with unionized postal workers. He said that UAW contracts
have influenced what postal workers got both on the way up and on the
"When I started, you went into contract talks and the arbitrators would
say, 'The auto industry and the steel industry, here's what they just
did, and you guys can get more or less the same.' "
But for the past several years, Rachleff said, "Postal negotiators have
been saying, 'This is what the auto and steel workers have just given
up, and you're going to have to give it up, too.' "
The waning influence of the UAW for the broader economy also may reflect
the changing position of major corporations, said Comerica economist
"We had a model in this country that major corporations would continue
on indefinitely, and it was perfectly reasonable to organize our pension
and health care around them," he said. "But we're finding, in fact, that
major corporations come and go. We really have to organize our
compensation schemes with the idea that very few people have careers
that are predominantly at one company."