When the elephant is in trouble even a frog will kick him.
— Hindu Proverb
President Bob King and the executive board of the United Auto Workers (UAW) are being criticized for abandoning the pursuit of GWIs (general wage increases, the Holy Grail of union contracts), and boldly embracing the strategy of profit-sharing. They’ve been accused of everything from gullibility to defeatism to outright treason. Personally, instead of being raked over the coals, I think they should be applauded.
Let’s not forget that the UAW (founded in Detroit in 1935) has lost more than one million members. In 1979, it had upwards of 1.5 million members; today it has about 390,000. The UAW has seen itself go from being celebrated as America’s most successful and prestigious labor union to being derided and sneered at as a hideous monument to wretched excess. Arguably, no American union in history—indeed, no union in the history of the world—has been hit harder or been more humiliated.
Beginning in the 1980s—plagued by foreign competition (much of it rigged), bad management, and Reagan’s anti-union crusade—the UAW has watched it all slip away, forced to accept every concession that came down the pike: two-tier wage structures, reduced health care and pensions, reduced crews, revamped seniority and work rules, elimination of cost-of-living allowances, etc. Name a concession, and it’s a good bet the UAW has already granted it.
For armchair critics to sit back and lecture these union leaders on what they should or shouldn’t do takes a lot of nerve. To second-guess this once-great institution for desperately trying to come up with a plan that gives them a fighting chance to rebuild themselves is not only presumptuous, it’s fucking outrageous.
And as for those tired old clichés about profit-sharing being a scam, or a palliative, or a form of “piece work” or, ideologically, tantamount to collaborating with the enemy, these critics need to lift themselves out of the rhetorical muck, take a deep breath, and carefully re-examine the history of organized labor.
Profit-sharing isn’t a new idea. Going all the way back to 1866, the year the nation’s first labor federation (the NLU: National Labor Union) was founded, working people have been openly and collectively questioning whether the hourly wage formula was, in fact, the best way to be reimbursed for their labor.
Under its charismatic founder, William Sylvis, the NLU formally proposed employee co-ops, arrangements where workers more or less ran the businesses and received commensurate shares of the profits. It was a stunningly innovative idea, and, predictably, one that proved far easier to formulate than to enact, but it illustrated the Big Picture concerns of working people.
In 1890, professional baseball players decided they’d found a better way of being compensated for their labor—a better way than receiving wages from team owners. In fact, they decided they no longer needed to be owned. After concluding that the only things they really required were equipment, a playing field, and an audience willing to pay to watch, the players set out on their own and formed a co-op, the Players League.
Another surprise: When you look at the history of these profit-sharing incentive plans, you find that most of them were discontinued for the simplest of reasons: They were too successful. It’s true. Once management examined the books and saw they were shelling out a far greater share of their wealth than they anticipated, they withdrew support for these “team” enterprises and returned to the traditional way of compensating workers; i.e., fighting at the bargaining table over hourly wages.
Then there’s the “insider” criticism—the objection that this profit-sharing scheme will kill any chance of the UAW ever going out on strike. However, had these “insiders” been paying attention, they’d know that as part of the 2009 auto bailout (the $24.9 billion in federal loan guarantees that saved the industry), strikes were already off the table. Per the agreement, Chrysler and GM workers were prohibited from going on strike over the issue of wages.
Thus, the UAW has declared it’s no longer looking specifically for wages. What it’s looking for is a reliable form of compensation that transcends wages. And given these recessionary times, the UAW’s frailty, and the no-strike restrictions of the ’09 bailout, profit-sharing is not only a commendable idea, it could turn out to be a brilliant one.