An American union fable

General Motors Chevrolet New YorkerA month ago the New Yorker published what appears to be becoming a widely discussed story on the need for unions to politically campaign for provisions that benefit all workers and their communities.

The story set in 1950, is about Charles E. Wilson, The president of General Motors and Walter Reuther, the national president of the United Auto Workers Union.

While bargaining with Reuther, Wilson, for the first time, offered every G.M. employee health-care benefits and a pension.

Reuther was opposed to the offer.

“His inclination was to fight for changes that benefited every worker, not just those lucky enough to be employed by General Motors… In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible.”

However the workers eventually accepted the offer and GM established a private pension scheme.

That scheme is now buckling under its own weight and GM is in serious financial difficulty.

“Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish. General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises.”

The New Yorker makes the point that individual American companies cannot guarantee ongoing health care, superannuation and social welfare. But workers in European countries as well as New Zealand, Canada and Australia do have a better guarantee of these services because they have campaigned politically for them to be provided universally, by the state, rather than by individual companies.

(Thanks to lslphoto for the photo)


1 Response to “An American union fable”

  1. 1 Baby Boomer 1961 24 October, 2007 at 7:47 am

    I tend to disagree with the above if only for the fact that giving the government more power over our lives ensures only mediocre performance and service from a burueacracy that is only concerned with its own existence.

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