On Wednesday, the 52,000 members of the United Auto Workers union at General Motors facilities will have some interesting reading: a new contract with GM, averting a strike.
By all indications, one big section to highlight in the document will be wage hikes. Raises, for the first time in a decade.
In the interim years, GM paid workers bonuses of up to $9,000 each in good years. That’s a big lump sum, though there are drawbacks.
“If you just get a lump sum, it neither gets built into your overtime, nor does it go into the base,” said collective bargaining professor Harry Katz at Cornell. Base, as in base wages, which will now go up.
“With future negotiations, that fact that the base wage is going up — they can start from that higher base and negotiate further in the future,” Katz said.
Higher base pay also bumps up retirement payments to workers.
Katz said General Motors gave raises to avoid a worker strike and labor discontent, at a time when business and profits are good.
“There were plenty of years where profit sharing yielded no check,” said Kristin Dziczek, labor and industry director at the Center for Automotive Research in Detroit. “There was a famous year where General Motors profit-sharing yielded 50 bucks. And many workers burned those checks.”
In a way, the company isn’t totally locked in to these raises. It can send assembly offshore, and thus hire fewer workers in the U.S.
“That’s going to be the company’s counterpoint,” Dziczek said. “’Well, if you raise our costs too much, we’re going to move that product.’ And the big threat is Mexico.’
And there, she says, is the trade-off: Better jobs at GM, but perhaps fewer jobs in the long run.
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