With GM and Chrylser going bankrupt there’s a lot of blame that gets directed towards unions. Unionized labor at GM costs $71 per hour. In comparions Toyota has no unions and their labor cost is only $47 per hour.
Joann Muller wrote a great piece in Forbes on why the unions aren’t to blame. She writes that one of the major expenses GM faces aren’t employees being paid that much more than the workers at Japanese automakers, but the legacy costs.
it’s misleading to suggest that Detroit autoworkers are paid $71 an hour. About $17 of that is the cost of health care insurance for retirees. General Motors has 442,000 retirees in North America, four times as many current employees. Toyota has only 371 retirees in the U.S.; Honda has 2,400.
That narrows the gap between per hour cost of labor to about $7.
I’ve heard stories about unproductive and overpaid union employees: workers on a perpetual break, not worried about performance. This is definitely a negative on American production. But let’s not forget all the good unions have done. They gave us the 8 hour work day and the weekend. Their role in developing the largest middle class the world has ever seen is just as great as the role of the factories that employed them.
Before there was the UAW, there were garment unions. And now there is a new PBS documentary “At Home in Utopia” about a development of new American immigrants who fought for workers rights and racial equality.
Here’s the trailer:
I’m not saying that unions in the U.S. shouldn’t share some of the blame when it comes to the uncompetitiveness of American manufacturing, but we need to give them the respect that they deserve. The next time you hear someone bashing a union, ask them if they enjoyed their weekend.