DETROIT — Every day at a General Motors plant near Lansing, Mich., workers drive hundreds of Buick Enclaves — many with leather seats for seven and onboard video systems — off the assembly line.
Driving one home would be tough for the plant’s newest workers, whose annual pay is less than the $35,000 it costs to buy even the cheapest Enclave. Newly hired members of the United Auto Workers at GM, Ford and Chrysler earn about $14 an hour, half what veterans make under their current contract.
It’s a far cry from the days when the union autoworker had one of the sweetest deals in American labor. And within the Enclave plant near Lansing, the disparity creates mixed emotions, including some resentment, among the 130 recent hires.
20 percent less
“It’s difficult to look across the line at someone getting paid more for doing the same job you’re doing,” said Steve Barnas, the plant’s union bargaining chairman.
For decades, the UAW tugged wages upward. In 1960, a UAW member made 16 percent more than the average American manufacturing worker. By 2006, the figure was 74 percent. Today, new hires in the UAW make about 20 percent less than the average.
In the old days, other industries adopted UAW benefits to compete for workers. Rival companies like Toyota would match their pay. The Federal Reserve even kept a close tab on UAW contracts because they were such a strong predictor of U.S. wages.
That was before high gas prices, the recession and skyrocketing health care costs brought the Detroit Three to their knees. Last year, as GM and Chrysler tumbled into bankruptcy, workers agreed to concessions, including the lower starting wage and suspension of cost-of-living raises that could amount to thousands of dollars over the life of a contract.
Workers angry
Demands for cuts are still coming. Workers at Nexteer Automotive, a steering plant in Saginaw, Mich., that GM is trying to sell, were asked to freeze wages for five years, lower the entry-level wage to $12 an hour and remove family members from new workers’ health care plans. Workers voted down the concessions Thursday.
Saladin Parm, who worked at the plant for 23 years before becoming a member of its union leadership team, said workers are the angriest he has ever seen.
“They’re saying, ‘This is not a high-school job where I want to take my girlfriend out to the movies. I have to support my family on this,'” he said.
In 2005, under a different contract, Parm’s own wages were cut from $28 to $18, but the blow was softened by a one-time, $105,000 payment from GM. Workers who have come in recently make even less but pay the same union dues as those who have been at the plant for years. Parm said he understands their resentment.
“We do want our company to be competitive. That’s the only way we’re going to keep our jobs,” he said. “At the same time, we’re saying, ‘Is this the best you can do?’ ”
It wasn’t always this way. When the UAW was setting the bar for U.S. manufacturing wages, some autoworkers made more than $100,000 a year with overtime and enjoyed nearly free health care and generous pensions.
Pay cut pressure
But the UAW and other unions have been forced to make concessions to blunt competition from places like Mexico, where autoworkers earn just $4 an hour.
Between 1960 and 1969, U.S. wages grew nearly 50 percent; in the 2000s, they rose just 29 percent, according to the Social Security Administration.
The UAW, which elected Bob King its new president this week at a convention in Detroit, still sets the tone.
So everyone from nonunion auto plant workers to unionized government workers could face similar pressure to lower their pay, says Sean McAlinden, a senior economist with the Center for Automotive Research in Ann Arbor, Mich.
“The UAW is showing the way,” McAlinden said. “What they’re basically telling the economy is the defined-pension benefit is dead. That retiree health from the company is dead. That high wages at the start of your career are gone.”
