Donald Trump pretends to be a tribune of the working class, standing up for American jobs. Last week nearly 50,000 General Motors workers went on strike to get what they see as their fair share of its profits and stop further layoffs. Trump's response? A shrug.
In 2009, when GM was on the brink of collapse, the United Auto Workers (UAW) agreed to let the company hire new workers at about half the prevailing hourly wage and with skimpier retirement benefits, hire temp workers at even lower rates, and outsource more jobs abroad. American taxpayers also forked over $10bn to save the company.
When GM went public again in 2010, it boasted to Wall Street that 43% of its cars were made outside the US in places where labor cost less than $15 an hour, while in America it could now pay "lower-tiered" wages and benefits for new employees.
The corporation came roaring back. Over the last three years it's made $35bn in North America.
But its workers are still getting measly pay packages and GM is still outsourcing like mad. Last year it assigned its new Chevrolet Blazer, a sport utility vehicle that had been made in the US, to a Mexican plant, while announcing it would lay off 18,000 American workers. Earlier this year it shut its giant plant in Lordstown, Ohio, which Trump had vowed to save. "Don't move. Don't sell your house," he told a Youngstown rally in 2017.
GM is still getting corporate welfare: since Trump took office, some $600m in federal contracts and $700m in tax breaks (including Trump's giant corporate tax cut). Some of this largesse has gone into the pockets of executives. Chairman and chief executive Mary Barra raked in almost $22m in total compensation last year.
Trump's response to the strike? He's "sad to see" it and hopes it will be short, adding: "I don't want General Motors to be building plants outside of this country."
Reminds me of last month's anodyne statement from the Business Roundtable a confab of CEOs on whose executive committee Barra sits pledging to compensate all employees "fairly" and provide them "important benefits."
For 40 years these CEOs have fought unions, outsourced jobs abroad, loaded up on labor-replacing technologies without retraining their workers, and abandoned their communities when they could do things more cheaply elsewhere. Does anyone really think they've changed their minds?
Amazon CEO Jeff Bezos signed the statement. Last week, Amazon-owned Whole Foods announced it would be cutting medical benefits for its entire part-time workforce at a total saving of what Bezos makes in two hours.
Corporate profits have reached record levels but most Americans have not benefited. Profits now constitute a larger portion of national income, and wages a lower portion, than at any time since the second world war. These profits are generating higher share prices (fueled by share buybacks) and higher executive pay, resulting in wider inequality. The richest 1% of Americans own about 40% of all shares of stock; the richest 10%, around 80%.
The demise of unions explains much of this. In the mid-1950s, more than a third of all workers in the private sector were unionized. This gave them substantial bargaining power to get higher wages and benefits. Non-unionized workers benefited indirectly because their employers knew they'd be unionized if they didn't nearly match the union contracts.
Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.
