No business which depends for existence on paying less than living wages to its workers has any right to continue in this country ~ Franklin Delano Roosevelt (1/30/1882 to 4/12/1945) the 32nd president of the United States (3/4/1933 to 4/12/1945). Excerpted from his statement on the National Industrial Recovery Act, 6/16/1933.
What follows is an excerpt from the Thom Hartmann Radio Program, 1/5/2012, which I edited for brevity and clarity. Have paying higher wages for manufacturing jobs been as disastrous for the "job creators" in Germany as here in the United States? According to the Right-wingers the greed of labor unions and the outrageous salaries and benefits they extracted from their employers bankrupted the auto industry. Is this true? Thom Hartmann reality-checks the assertion...
Thom Hartmann: This is incredible when you think about this. Germany just announced this week, that their unemployment rate is the lowest it's been in 20 years. And 20 years ago they were doing pretty good. The also... and this is going to make your head explode... they also announced that not only do they make a lot of things there... they, for instance, make twice as many cars. Germany is ... smaller then us [81 verses 312 million people], and they made, last year, 5.5 million cars while we made 2.7 million. They also make precision equipment, medical machinery, precision tools, etc. But guess what the average auto worker in Germany makes.
In the United States the average auto worker makes $33.77 an hour. That includes the benefits. At GM and Chrysler the new hires are coming in at $14.00 an hour. That's in the United States. So we've seen, since Reagan came into office, the average wage of the average US autoworker dropping, from what would be in today's dollars around 45 to 50 dollars an hour, down to 14 dollars an hour at entry level. That's 30 years of Reaganomics... and insane free trade policies.
Germany, which protects it's domestic industries, requires large corporations have half of their board of directors made up of representatives of labor, has a system called "worker's counsels" where the workers make all the major decisions about the workplace... how things happen on the factory floor... In Germany the average hourly salary with benefits is $67.14. On top of that those German workers have free health care. Their children have free education through college (more or less free). It's amazing.
Conservatives would look at this and say, "Germany must be having horrible problems. They pay $67 an hour and the workers run the factories? Their CEOs must be hysterical". No. The CEOs and stockholders are doing just fine. In fact their companies are making billions. Last year Volkswagen, BMW and Audi... all three of the major German car manufacturers, all reported profits in the billions. That's the leftover money after everyone has been paid. After the CEOs have been compensated, and they're well compensated. Not hundreds or thousands of times more then the average worker, but dozens of times. They're making good money.
Horst Mund is an executive with IG Metall [the country's equivalent of the United Automobile Workers] said that because of the work's counsels "you don’t always wear your management pin or your union pin". In other words, we're working together here. What an amazing idea, an economy where people collaborate?
And then, on top of that he said, "this goes against all the mainstream wisdom of the neo-liberals". Now, in Europe they refer to what we here call Republicans or Conservatives... they call them "neo-liberals". Liberalism in Europe means being in favor of business being able to do whatever it wants. Unrestrained business. As opposed to here in the United States where Liberalism means having a social saftey net, and providing people with bootstraps so they can pull themselves up.
So [Mund] says that the fact that the German companies are making billions in profits and the average auto worker is making $67.14 an hour. He says "this goes against all the mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages... despite our [the union's] possibility to influence companies, the economy is working well in Germany".
(The facts presented in Thom's rant are from a 12/21/2011 Forbes article by Frederick E. Allen, titled "How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much".)
My Commentary: What this proves, as stated in an article by Daily Kos author Laura Clawson writes (12/28/2011) is that "German auto manufacturers' high profits and high pay show why U.S. labor laws need to be stronger". Because if the government doesn't force companies to pay decent wages they will take advantage of their employees and pay them as little as possible. The Daily Kos article concludes, "that's why we need laws that level the playing field for American workers - and how we know, despite what Republicans tell us, that those laws won't tank our economy".
Such laws will actually be very beneficial to our economy, as it will put more money in the hands of workers, who will then spend it and stimulate further economic growth. This is the same reason why minimum wage laws don't cost jobs (as conservatives claim). Paying higher wages to workers (and a little less to CEOs) causes those workers to buy things; creating more demand; and thus causing employers to have to higher more workers to meet that demand.
Greedy unions forcing employers out of business and the minimum wage costing jobs are lies conservatives use in order to justify underpaying workers (and keep that money for themselves in the form of outrageous CEO compensation). Economies THAT WORK... like Germany's prove Conservatives are wrong. So-called "Right to Work" laws lead to lower wages and are bad for our economy. Protecting good paying American jobs via unions and tariffs are good for our economy. We need both higher unionization rates and higher tariffs.
This is why Congress needs to pass Card Check, tie increases in the minimum wage to inflation, and back away from the free trade agreements. Until (or unless) those objectives are accomplished the American middle class will continue it's decline.
Note: If you are a subscriber to the Thom Hartmann program podcast, the location of this segment of audio can be found at 0:16 to 6:30 of Hour 3, Thursday January 5 2012.