Prof Cutler | Musings on the News

Members of the United Automobile Workers (UAW) will soon be encouraged by the union leadership to ratify a settlement reached with General Motors.

Will the membership ratify the contract?

That may depend on what they are hearing about the deal.  There are two distinct accounts out there and they offer up profoundly different lessons for the membership.

One version of the settlement comes from the UAW, the mainstream media, and pro-labor academics.  It celebrates the settlement as an enormous victory for the UAW and the American labor movement.  Who wouldn’t vote Yes?

The other version of the settlement comes from the business press.  If the membership were to get wind of the business press perspective, they would likely vote NO.

The Official Union Story

Union officials, led by UAW President Ron Gettelfinger and the UAW Vice President of the General Motors Department Cal Rapson, are doing its best to sell the deal to its membership.

As I noted in my book, “Labor’s Time: Shorter Hours, the UAW, and the Struggle for American Unionism,” Walter Reuther built an “administration caucus” that consolidated control of the UAW in the 1940s and 1950s.  That caucus remains firmly in control of the International Executive Board of the union and retains the loyalty of most local union presidents.

Hence the unanimous endorsement of the GM settlement by official delegates to the National Bargaining Council in Detroit.

Within the UAW, discussion will be limited to the monologue selling job of the top leadership.  At the local level, union officials from the administration caucus haven’t exactly promoted or invited deep debate about the issues.

Consider Flint UAW Local 659 in the heart of the General Motors empire.

Historians of the UAW will recall that Local 659 and its feisty newspaper, “The Searchlight,” played a prominent role in the cantankerous internal factionalism of the early UAW.

Today, the official website of Local 659 makes a mockery of that tenacious legacy.

The most recent on-line version of “The Searchlight” features an article on the annual Local 659 Walleye fishing Tournament–held in July–but makes no mention of the subsequent contract negotiations.

The website link to “retiree” issues (a centerpiece of the UAW-GM contract negotiations) comes up blank.

Bill King, shop committee chairman of the powerful Flint Metal Center unit, promotes his role as the elected chair the UAW/GM Top Negotiating Committee.  But his discussion of the contract is limited to a warning about the dangers of unauthorized chatter:

There is plenty of rhetoric and speculation in the media about this set of negotiations. Take this news with a grain of salt, as it is only opinions of people who will not be bargaining the contracts. Unless the information comes from a direct quote or a report from your union leadership, it is only an outside view.

The UAW selling job has received some welcome “outside views” from academics and the mainstream media.

Consider, for example, a September 30 article from the Detroit Free Press entitled, “Improved Prognosis: GM-UAW Agreement Begins New Era for Organized Labor.”

Labor unions, derided as dying organizations, saw in the UAW’s pending takeover of General Motors Corp.’s retiree health care burden a new mission and perhaps a new recruiting tool.

“It shows the labor movement is willing to stand up for the members, stand up for the retirees and take some risks,” said Glenn Feldman, director of the Center for Labor Education and Research at the University of Alabama at Birmingham….

Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor and globalization issues, described the deal as a landmark moment for the American economy, as defining for this era as the wealth-sharing contracts won by the UAW in the 1950s were for an earlier generation.

“Overall, what these negotiations sought to forge is a social contract for the 21st Century — a more competitive General Motors, translating into middle-class jobs,” he said. “In the context of the pressure of globalization and the stumbling of the domestic industry, that’s not a small feat. That proves a relevance for unions under these circumstances, rather than a hint of their demise.”

The Business Press: Reading “Against the Grain”

Factionalism and dissident organizing is not entirely dead within the UAW.

Several groups have mobilized internet campaigns (see “Future of the Union,” the Center for Labor Renewal, and “Soldiers of Solidarity,” to name a few) to establish more lively debate about the UAW settlement with General Motors.

The “Soldiers of Solidarity” website includes what appears to be a link to a PDF file of the actual settlement between the UAW and GM.  You can’t find that on the Local 659 website.  But it makes for interesting reading.

The most “dangerous” sign about the dissident internet campaigns is not that they are reading and quoting Marx but that they are reading and quoting the business press.  The “Soldiers of Solidarity” homepage currently features a quote from JP Morgan analyst Himanshu Patel:

While the devil will be in the detail, our first reaction is that GM captured a much broader set of concessions than we previously anticipated.

Is the business press an “objective” source on labor relations?  No.

It is unabashedly and transparently pro-business.  But that transparent bias is precisely what makes it potentially more interesting and more reliable than mainstream media accounts.  Business press bias means that union victories are often disparaged while union defeats are celebrated.

To read “against the grain” of business press bias requires only that one reverse the terms: expressions of fear, disappointment, and rage in the pages of the business press are best interpreted as signs union strength.  Expressions of euphoria and/or indifference in the business press can signal union weakness and a raw deal for workers.

So, what is the business press saying about the UAW-GM deal?  Are the signs of fear and trembling at a labor movement is willing to stand up for the members, stand up for the retirees and take some risks?

Hardly.

The editorial page of the Wall Street Journal was delighted with the terms of the settlement.

This week’s deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition.

The most extraordinary review comes from my favorite business press source, the Financial Times.

FT Associate Editor John Gapper is well pleased with the outcome, but offers a devastating portrait of the UAW in his essay, “Reality Intrudes at General Motors.”  It is worth quoting at length:

“[T]here was something about the United Auto Workers’ short-lived strike this week that felt fake…. [T]he strike was hard to take seriously. It seemed more like role play than a genuine threat, something the UAW’s leaders had to do to show their members they were not a pushover rather than a fight they thought they could win. So, after two days, they came back, having accepted watered-down contracts…”

[The UAW] is now allowing GM to buy out thousands more contracts and hire workers at lower rates… [T]he Jobs Bank [a “scheme” in which GM gave “workers who were laid off full pay for years at a time”]… is already considerably diminished and this deal will weaken it further…

The financial risks usually imposed on employers by the health insurance system will instead be borne by the union…

[I]f the role of a union is to advance the interests of working people by negotiating steady improvements in pay and conditions, the UAW did a bad job this week…  [The UAW effort] was distinctly pusillanimous.”

Needless to say, Gapper considers all of this “preferable” to the alternative of a fighting union.  But that is precisely the point.

As for the much-touted “VEBA” agreement to which Gapper alludes, in which the union has agreed to bear the “financial risks” of the health insurance for retirees, the business press offers some insights that might be of interest to UAW members trying to judge the deal on offer from the UAW.

In an essay entitled “A New Era for U.S. Auto Makers?,” Thomas G. Dolan–editorial page editor at the financial weekly, Barron’s–seems to think UAW members are in for a rude awakening:

If ratified, the new contract with GM hands the union “responsibility” for GM’s $51 billion present-value liability for retirees’ health care. GM gets to buy back its promises for something like $35 billion in cash, stock and bonds (in proportions and timing so far unspecified), to be invested in a trust called a Voluntary Employee Benefit Agreement. The VEBA pays the benefits from principal and investment income for as long as it can — UAW President Ron Gettelfinger made the absurd claim that it will last 80 years.

Don’t ask what happens if the VEBA isn’t viable. GM isn’t telling. Neither is the union. We expect the liabilities will grow faster than the assets.

Dolan predicts UAW retirees may “pay more than they think” once the VEBA runs out of money.

Which Side Are You On?

For some, there is nothing more blasphemous than to criticize a labor union.  Is not reliance on the perspective of the business press–rather than the official union press release–not telltale sign of an anti-union ideologue?

Perhaps.

But it is one thing to absorb the bias of the business press (i.e., Harley Shaiken’s notion that “a more competitive General Motors”–guaranteed through a two-tier wage system and a wage freeze–somehow translates into “middle-class jobs” and a “social contract for the 21st century”).  It is quite another to read the business press, but to do so against the grain of its bias.

There is also a difference between criticizing a union for doing a bad job and hoping it does a bad job (i.e., being anti-union).

The union leadership wants its membership to rely exclusively on  “a direct quote or a report from your union leadership” and to eschew any “outside view.”

Insofar as the membership can be shielded from any “outside view,” the contract will be ratified.

If, however, the membership finds its way to the on-line business press… then all bets are off.

Here is a Q & A I did for NPR on the legacy of Haymarket, May Day, and Shorter Hours:

http://www.npr.org/templates/story/story.php?storyId=5369420

Q&A: The Legacy of Haymarket

Jonathan Cutler is Associate Professor of Sociology and American Studies at Wesleyan University in Connecticut. He is the author of Labor’s Time: Shorter Hours, the UAW, and the Struggle for American Unionism. Here he answers questions from NPR.org on the ramifications of the Haymarket riots. You can read more of his current affairs commentaries at profcutler.com.

What is the legacy of Haymarket? Does it still resonate today?

Haymarket resonates today more than it has at any other time in recent years. The original Haymarket affair of 1886 was part and parcel of a massive, national May Day rally and strike led, by and large, by America’s immigrant workers. Today, precisely 120 years later, the May 1, 2006 Immigrant General Strike — also known as the “Day without Immigrants” and the “Great American Boycott” — looks set to inherit and reinvigorate the legacy of Haymarket. Then, as now, employers launched an aggressive drive to undermine wages and living standards. In 1886 workers from around the world responded with an aggressive campaign of their own: an international movement for less work and more pay.

What is most misunderstood about the labor movement… historically and today?

Today it is easy to misunderstand the relationship between immigration and the labor movement. The unruly nationalists of basic cable talk tough about immigration and America’s “broken borders” in the name of defending working-class America. They hurl insults on the awkward coalition of Big Business interests hungry for cheap, docile labor and pro-immigrant progressives who favor free and open borders.

Today, anti-immigrant nationalists seem to speak truth to power because they insist that flooded labor markets benefit employers at the expense of employees. In the era of Haymarket, however, the May Day demand for shorter hours provided an acid test for differentiating labor’s true friends from the misleaders of labor.

In the time of the Haymarket affair, anti-immigrant nationalists sowed the seeds of chauvinism through labor market exclusion; shorter-hours activists sustained a vision of solidarity without borders. Where employers expected docile immigrant bodies, immigrant activists responded with May Day militancy. Today, immigrants rights activists have broken decisively with employers and reinvigorated the tradition of May Day militancy.

What’s the difference between May Day and Labor Day?

In almost every country around the world, May Day is the principal workers’ holiday. It is a day of strikes, rallies and demonstrations, often linked to demands for shorter hours. Within the international labor movement, the May Day protest tradition got its start in the United States. Today, however, the United States is the great exception to the May Day tradition. Our end-of-summer Labor Day holiday was developed as an official government alternative to the labor movement’s May Day rallies. One central difference: May Day has always been linked to the demand for less work and more pay; Labor Day celebrates the “dignity” of work.

How have American attitudes toward labor evolved since the Haymarket riot?

Most people in the United States seem to think of organized labor as a strictly blue-collar affair. Likewise, the Haymarket riot is viewed in nostalgic sepia tones. The labor movement, according to this viewpoint, had its place in the 19th and early 20th century when workers were exploited and abused in the furnaces of industrial capitalism but has no place in the high-tech, white collar world of the new economy.

The irony is that the issue at the heart of the Haymarket affair — the hours of labor — is now quite significant in the white collar world. The 1938 Fair Labor Standards Act established the 40-hour workweek as the legal norm and imposed over-time pay requirements on employers for all work in excess of 40 hours. Hourly wage workers get extra pay for extra time. Most white collar work is exempted from the law. As a result, the pressure on the white-collar work week has grown tremendously in recent decades.

If there is anyone who needs to attend to the spirit of Haymarket, it is the American white-collar professional who works 10 hour days, including many weekends, and who has fewer paid vacation days than other white-collar professionals around the world. Annual hours of work in the United States are now longer than any other industrialized country in the world.

What do the recent labor protests in France illuminate about the American labor movement?

There are some very significant parallels between recent events in France and those developing in the United States. In France, there were enormous immigrant protests in late 2005. The demands of the protesters were quite similar, in many respects, to those articulated by immigrant rights activists in the United States.

At the time of the 2005 protests, employers in France thought they might be able to use the immigrant protests as an excuse that would allow them to undermine French job security protections. The most recent labor protests were a reaction to this government initiative. The protesters succeeded in defending job security protection.

In the United States, there were similar suspicions that employers might use the immigrant rights rallies as an occasion to establish a “guest worker” program as an alternative to amnesty and full citizenship. The May Day Immigrant General Strike contradicts that notion. Like their counterparts in France, immigrant workers in the United States — through their demands for amnesty and full rights — have rejected employer efforts to use immigrant workers to undermine U.S. labor standards.

How will the labor movement factor into the ongoing immigration debate? Can the two issues be separated?

Until recently, it has been common for labor leaders to justify their failure to organize immigrant-intensive industries with the claim that low-wage undocumented workers were difficult to organize. The wave of protests that started on March 25 in Los Angeles defy that rationalization.

Some unions are quite animated by the immigration debate and have mobilized members to action, but have weighed in on the side of anti-immigrant nationalism. Other unions, especially the Service Employees International Union (SEIU), led by Andy Stern, seem interested in building bridges between immigrant communities and organized labor. Still, for some reason, many SEIU locals have shown only lukewarm interest — if not outright hostility — toward the May Day strike. Immigrant workers are proving themselves to be more militant than the official unions. Organized labor has some catching up to do.

What are the biggest challenges facing the labor movement today?

The biggest challenge is putting the “movement” back in labor. Of course, there are economic obstacles. But the real and unprecedented crisis is organizational, not economic. Back in the Haymarket era, labor activists were scrappy fighters and labor unions were nimble and responsive. Today, labor has formal rights but no soul. There is “organized labor” — a big lumbering bureaucracy with lots of large buildings in Washington — but precious little in the way of labor movement.

How do you see those challenges being resolved? What do you see as the next step for the labor movement?

There is hope on the horizon, although it may be difficult for some to recognize at first. In 2005, the labor movement split into two rival labor federations. One is the old AFL-CIO, led by John Sweeney, and the other is the new “Change to Win” federation, led by Andy Stern. Sweeney and Stern each have their defenders and detractors, but many labor activists argue that labor as a whole is injured by a divided house of labor.

It is worth recalling, however, that the great Haymarket battle occurred in the context of a long-term rivalry between the pre-cursor of the American Federation of Labor (AFL) and its primary challenger, the Knights of Labor. The Knights are usually thought of as the more militant organization, but this is not entirely true. The Knights of Labor were initially hesitant to embrace strike tactics or to press for shorter hours. Fearing the loss of members to the AFL unions, however, the Knights eventually embraced both shorter hours and May Day strikes. The competition between the AFL organization and the Knights forced the two organizations to bid for the support of rank-and-file workers and led to an upward spiral of demands, centered on the idea of shorter hours.

Today, the “Change to Win” federation, like the Knights of Labor, is usually thought of as the more militant organization. However, the apparent refusal of SEIU and “Change to Win” to endorse the “Day without Immigrants” raises serious questions about that assumption. Is “Change to Win” willing to confront employers on behalf of undocumented workers? Immigrant rights activists may have to find ways to exploit the rivalry between the AFL-CIO and the “Change to Win” federation if either organization is going to play a productive role in the burgeoning immigrant workers movement.

The immigrant workers movement is leading the way by summoning the American labor movement to revisit its own May Day protest traditions.