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Contracts Can’t Be Broken—Unless They Involve Union Workers |
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Contracts can’t be broken. We learned that lesson well over the past few days when AIG honchos swore that despite being bailed out by $173 billion in taxpayer funds, they couldn’t break the sacrosanct contractual bond that guaranteed billions in bonuses to the same top executives who brought the insurance giant to its knees.
But we also were taught another lesson in these months of financial chaos: Contacts can’t be changed—unless they involve unionized autoworkers.
Tim Rutten at the Los Angeles Times really hits the mark today when he writes:
What we’re essentially being asked to believe is that employment contracts involving hardworking men and women on Detroit’s assembly lines are somehow less legally binding—less “sacred” in the current rhetorical argot—than those protecting a bunch of cowboy securities traders living in Connecticut. [snip]
For years, the smart guys on Wall Street have convinced a growing number of Americans that organized labor is an impediment to economic progress, an unacceptable “cost” in a globalized system of production, a quaint social fossil from the era of mills and smokestacks. If there’s a lesson to be gleaned from the current crisis, however, it’s that when the chips are down, organized labor is a far more responsible social actor than the snatch-and-run characters who fancy themselves financiers.
Who re-negotiated their contracts in the face of a taxpayer bailout? Not AIG CEOs. It was the autoworkers who agreed to put their middle-class wages on the line to help out the struggling industry. So far, not one AIG CEO has stepped up to the plate to return that $1 million or so bonus. (AIG bigwigs aren’t alone in soaking up taxpayer money for personal fun—a video clip here by Brave New Films lists more CEOs on the taxpayer dole and urges people to take action on March 19.)
When General Motors (GM) and Chrysler asked for government support in December, Sen. Bob Corker (R-Tenn.) pushed a pay cut amendment in the Senate that called for slicing the autoworkers’ wages to those paid to nonunionized workers. So, Bob, your fans are waiting breathlessly to hear you call for AIG billionaires to give back their bonuses. Or, as a columnist in Corker’s home state puts it:
Paging Bob Corker! Explanation please! [snip]
So, to make sure I have this right, we can give $185 billion to AIG and we have to uphold their employment contracts with 80 people, but we can’t give 1/5th that amount to General Motors unless they abrogate their employment contracts with 100,000 workers.
Yes, taxpayers own 80 percent of AIG. But we can’t seem to stop AIG execs from getting bonuses. After all, AIG CEO Edward Liddy and the company’s apologists argue, AIG knew it needed to keep its people. The implication here is that financial wizards who run a global company into the ground are more valuable than the blue-collar men and women who aren’t paid seven-figure salaries and whose jobs involve creating tangible products like, say, automobiles. Meanwhile, AIG bonus information so far includes:
- $200 million in bonuses.
- 73 AIG employees receiving bonuses of $1 million each, almost all of the employees…responsible for creating the exotic derivatives that caused AIG’s near collapse.
- Some of those receiving the bonuses are not U.S. citizens.
A CNN poll released today shows the American public increasingly fearful that the nation’s economic downturn will mirror the Depression. Asked whether Depression-era circumstances could reign in the next 12 months, 45 percent of those polled reported that was likely. That’s an increase from 38 percent who responded in the same fashion in December.
As AFL-CIO President John Sweeney says, “These outrageous bonuses are yet another example of an economy that has become fundamentally imbalanced.”
All of the power is concentrated in the hands of the very few at the very top and the gap between CEOs’ and workers’ pay continues to grow. That is why we need to pass the Employee Free Choice Act.
Passing the Employee Free Choice Act will allow workers to have a voice at work, lift their standard of living and build stronger communities as well as stronger families.
A Gallup poll released in recent days found 53 percent of the U.S. public supports the Employee Free Choice Act, which was reintroduced in the U.S. Congress last week. Why? Because we need a stronger middle class. One with contracts that are sacrosanct.
8 Comments
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Why is it CEO’s are so greedy? Why can they not see what they are doing to the economy? To their own company. I guess they just do not care about anyone but number one. I have for a long time believed that is why the average worker does not get raises and everything you buy has went up so much that everyone is able to save less and less for even a simple retirement. My guess is that most CEO do not believe in God. Don’t be so greedy people!!!!
The economy is out of balance because that’s the way Capitalism works - the rich get richer as workers get poorer. The labor movement has gone along with this system for decades, and workers have been sacrificed and concessions made to prop up the fundamentally imbalanced and inhumane capitalist system. Instead of crying crocodile tears and expressing outrage because of the inevitable excesses of laissez faire capitalism that labor has gone along with, why not get busy and work for a democratic socialist economy where workers have control and share the wealth that we create? Until then, you are just weakly complaining that the band-aid they sold you to cover a gushing artery is failing.
you hit it on the head. the only thing i can add is it is time for a workingman’s revolution in this country! the wealth must be taken from the 1% who own 90% and redistributed!!!!!!!!
Companies can also claim tax deferments and tax write offs when they lose money: When a senior citizen draws on their 401k, annuity, IRA etd,.funds they are taxed and no compensation for any losses due to poor mismangement of the investments whether done by the corporate investers or mismangement due to bad advice from the Dept of Labor Secretary who told the any union that if they dont move the liquid monies into the open stock and bond markets and there is a loss, the members are still penalized with the same tax rate regardless.
So what this all means to me is this: we agree to a contract but that contract is worthless now because if the business goes bad we have to settle for whatever and thats that!
Money goes to money and if you have none you get none! CEO’s are the bosses and everyone else takes the losses!
On a radio talk show today I heard that the bonus figure was actually about 1 billion dollars, but AIG used some “creative accounting” to hide the rest of it. This will probably be the next bombshell to come out of this putrid mess. And Dodd, Frank, Geithner, Paulson, etc. will be pointing the finger at someone else or playing dumb “Gee, I never knew about that! Honest, never heard a thing about that!” Yeah, right….
What, Americans are outraged that their tax dollars are being used for crook’s bonus’ ?
By the way let’s not forget outrageous executive salaries.
Truth is, Americans have been slopping these “Pigs at the Trough” for years. We’ve all been paying these unnecessary and extravagant benefit packages for decades. The only difference is that is the money used to come directly out of our pockets in the form of higher prices, exported jobs and corporate rigging of the tax code and trade laws (Medicare drug benefit anyone) through their bought and paid for legislators and presidents.
I am glad to see the outrage now. What took so long?
Dave
Not only is it the UAW auto workers who have their contracts broken, but anyone who is not “EXECUTIVE” level. Look at the UAL retirees who were drawing retirement per their contract, many of whom had to go back to work, who lost up to 60 percent of their retirement.
what about the poor, no one says anything about the poor why is that???. is it because it isnot news, it doesnot sell newspapers, what is the problem.
this country, started it, and now it is out of control and it seems today, the banking system owns this country so do the chinese, japenese, and all other countrys in the world who have a peice of the united states??/?.
come on here lets stop the madness, and come clean with the people nothing is really going to change because are government does not want it to, that is the bottom line .