Obama’s Labor Pick Is Good News for Workers

Senior Editor David Moberg looks at this week’s labor news, including Obama’s labor secretary pick, Detroit’s holiday package, and the recent death of labor leader Ron Carey.

David Moberg

Obama recently picked Rep. Hilda Solis to head the labor department. Many labor advocates applaud the choice.

After Obama picked many centrist, conventional Democrats – and even Republicans – to his Cabinet, his choice for labor secretary is refreshing. Hilda Solis is a progressive with a will to fight and to work with grassroots labor, environmental and immigrant worker movements.

Labor leaders across the board applauded the appointment of Solis, who serves on the board of American Rights at Work, a labor-founded but more broadly based advocacy group. Her ties to labor are deep, going back to at least her state senate days, when she also became a crusader for environmental justice.

Solis owed her seat in Congress from East Los Angeles in large part to support from the Los Angeles County Federation of Labor and the Service Employees Union in 2000. That was when she won a primary challenge to nine-term incumbent Democrat Matthew Martinez, who had angered unions with his vote for fast-track trade negotiating authority (and ticked off other progressives with votes against late-term abortions and gun control).

The big question is not her commitment to rights of workers but her clout in the Obama inner circle. One of his last Cabinet appointments, Solis will be a latecomer to the fashioning of economic policy. And unions want one of their top priorities – passage of the Employee Free Choice Act to strengthen the rights of workers to form unions – tied into the economic stimulus package.

In Bill Clinton’s Cabinet, Labor Secretary Robert Reich was also viewed by many as the progressive voice – even though his initial waffling about the importance of unions irritated organized labor. But he was largely shut out of policymaking by the coterie around eventual Treasury Secretary Robert Rubin, whose close associates have prominent posts in Obama’s Cabinet.

But the times and – one can still hope – the presidential temperament may be sufficiently different today that Solis won’t be locked in the Cabinet,” as Reich’s memoir described his tenure.

Big Three news

When Obama announced his labor secretary choice, he obliquely supported Bush’s emergency loans to the auto industry, or at least GM and Chrysler now, arguing that the companies need to come up with a new plan quickly and that restructuring should not come solely at the expense of workers.

He also set his benchmark for judging the strength of the American economy: jobs and wages. But by that standard, the Bush plan fails. Like Republican senators who sabotaged a bailout, Bush demanded that GM and Chrysler set wages and work rules competitive with the transplants of the non-union factories of Toyota, Nissan, Honda by the end of next year.

That goes directly against Obama’s policy benchmark – which includes wages as well as jobs – and against his planned economic stimulus program.

Few things could be worse for the overall economy now than a round of wage cuts feeding on each other.

Given that the main labor-related financial challenges for GM and Chrysler are the retiree health and pension costs – deferred wages that the companies should have provided for in their planning – the companies really need national health insurance, not wage cuts, to be competitive.

In any case, the UAW has already made so many concessions that unionized new-hires earn roughly what non-union transplant workers earn.

Republicans’ real objective – as they made abundantly clear – is to use the threat of greater calamity to break the UAW altogether.

As an internal Toyota report leaked to the Detroit Free Press last year made clear, Toyota wants to cut costs by driving wages down to the level prevailing in its Southern locations, instead of having to come close to UAW wages, in order to discourage unionization.

The problems of the Detroit Three don’t stem from higher labor costs, which make up less than 10 percent of the automobile price, as much as a long history of management missteps and shortsightedness – as well as faulty public policy the companies supported.

But even if their workers’ wages were the reason they aren’t competing well enough against the transplants – who are also suffering from plummeting sales, even for the hybrid Prius – why should wage cuts be the solution?

It makes more sense, in terms of workers’ well-being and the overall economy, to demand that the transplants match UAW wages.

After all, these transplants received over $3.6 billion in direct public subsidies – not bridge loans – over the years as they played one state against another over factory locations.

Also, though raising the transplant wages may seem fanciful, it’s essentially what most foreign countries do. Either because workers are easily unionized or the government extends union contracts to all of an industry, wages are standardized across the auto industries in most advanced industrial countries.

Raising Toyota wages makes more sense than cutting Chrysler workers’ wages, unless you hate workers and especially unionized workers so much that you’re willing to push a crashing economy even farther and faster down to disaster.

The labor movement has not fought for the auto workers with anywhere near the needed vigor, but then the UAW leadership – frightened understandably by the prospect of company bankruptcy and massive job loss – hasn’t been fighting that hard on its own behalf. If concessions eventually are forced, a campaign in defense of auto wages would at least minimize the sacrifice.

Labor’s weakness on the auto bailout may come to be viewed as the Patco of this era, reminiscent of Reagan’s smashing of the air controller union while organized labor remained all too disorganized on the sidelines.

In memory of Ron Carey

The labor movement is capable of putting up a good fight even in its weakened condition, as the Teamsters demonstrated in 1997 when it struck successfully against UPS partly on the theme that part-time America doesn’t work.” The union’s leader in that strike was Ron Carey, who died at age 72 on Dec. 11.

Carey was a former UPS driver who rose to the top of his New York local as an honest, hardworking advocate for members in a union all-too-plagued by leaders partial to sweetheart contracts, fat salaries and mob ties. When the government obtained a judicial consent decree to clean up the union, Teamsters for a Democratic Union, a long-time rank-and-file reform group, won direct member elections of officers as part of the oversight plan.

With TDU support, Carey campaigned against a divided old guard” and won the international union presidency in 1991. He reformed the union internally and cast the union’s votes for John Sweeney’s team in the 1995 fight over reform of the union movement. But when he ran for re-election in 1996, he mistakenly thought he could swing many of the old guard leaders to back him as the inevitable winner.

But they fought back, uniting behind Jim Hoffa, and Carey turned to professional election consultants who partly supplanted his earlier grassroots campaigning with a more expensive, media-oriented approach. They violated campaign financing rules, and eventually the government watchdog overturned the election and barred Carey, even though a federal jury later acquitted him of charges that he knew about and failed to stop the wrongdoing.

Before the election was overturned, Carey executed a brilliant campaign against UPS that started with months of educating and mobilizing members, then used those members as the public spokespeople of the union. The union united UPS workers – both full-time and part-time – from all parts of the country, and it won widespread popular support, making it possible to hold out and win a rare major strike.

Despite the sad end to his career, Ron Carey was a strong and admirable leader for American workers with a zeal and courage not only to transform his own union but also to take on one of the Goliaths of American business – and win.

David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.

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