Friday, December 19, 2008  

Mo' Bailout:

1) The Treasury Department has now posted the terms of the bailout. 

2) How does the UAW's Gettelfinger get away with saying these terms are "singling out workers"? The deal calls for creditors to convert two thirds of their debt into equity. There are also limits on executive compensation. Maybe they're mostly toothless in practice--but the terms directed at the UAW are explicitly toothless. They're just "targets."

3) It's not a deal:   Note that Gettelfinger says he's unwilling to abide by these provisions and makes it clear he intends to "work with the Obama administration and the new Congress to ensure that these unfair conditions are removed." So it's not really a deal. It's a deal that one party has pledged to undo as quickly as possible. Think of the fuss if there were a Republican adminstration on the way and GM vowed to undo its obligations under the arangement as soon as possible.

4)  We like it except for the parts that, you know, make our constituency change:  Indeed, Barney Frank has joined in the call for removal of the UAW-sacrifice "targets" once Obama takes office . Is he actually amping up the pressure on the incoming President to protect the UAW, or is he just scoring cheap points with labor at a time when feelings are raw and he can't be expected to actually do anything? I smell Kabuki! They stick in non-binding targets. Labor and its allies rebel and righteously remove the non-binding targets. Everyone wins. Gettelfinger looks strong. Dems like Frank repay their debt to labor. Republicans get an anti-union cause. Nothing has happened. The real issue is whether Obama actually forces unionzed autoworkers to shave wages and (a much bigger issue) change restrictive work rules when the actual crunch date comes around next year.

5) Here are two paragraphs for my pro-union friends who doubt that Wagner Act work rules are a) at the core of Detroit's problem and b) the hardest thing to get the UAW to reform, because they require more than an incremental increase or decrease in compensation:

The Bush plan requires work rule parity between U.S. automakers and foreign automakers — not a simple task, said Aaron Bragman, an automotive industry analyst at consultancy IHS Global Insight.

"Work rule parity is very different between the UAW and the foreign automakers," Bragman said. "Work rules govern how you make the cars, or who can touch what in the factory. There’s such a level of detail, and how a Japanese automaker makes cars is totally different to how a U.S. company makes cars. So there are a lot of difficult issues to be fixed very quickly. GM’s Rick Wagoner says they can fix them, but analysts are not so sure." [E.A.]

As far as the UAW is concerned, this was not a change election! ... 11:24 P.M.

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Jobs Americans Won't Will Do: A WSJ report contradicts two pieces of pro-legalization CW:

1) 'Crops will rot in the fields without legalization and a "guest worker" program': Not this year--

Growers across the country are reporting that farmhands are plentiful; in fact, they are turning down potential field workers.

2) 'Non-immigrant Americans just won't do tough, dirty jobs like agricultural field work and day labor' Not any more--

In particular, Mr. Gray has observed an influx of U.S.-born Latinos and other workers who previously shunned field work. "These are domestic workers who appear to be displacing immigrants," says Mr. Gray.

A similar situation has emerged in U.S. cities from New York to Los Angeles, where unemployed, nonimmigrant laborers are seeking informal work that typically has been performed by low-skilled immigrants ...

Note that if Americans will do the work when they're desperate--i.e. when they can't get better jobs--that suggests that at least some of them will do the work if they're paid sufficient wages (i.e. when they can't get better jobs).  The point is they will work on farms. We're just haggling over the price, and the alternatives. That means, when the economy picks up, that farmers could get much of the labor they need by ... raising wages. What a concept. ... [ As long as we don't raise autoworker wages, eh?--ed The UAW's members negotiated above -market wages, demanded lots of legalistic work rules, and now want taxes on people like $10/hour agricultural laborers to bail them out when their firms go under (while deferring modest wage adjustments until 2011). Seems like a different case! But maybe your point is that restricting the flow of illegal immigrant labor can raise the wages at the bottom of the ladder, for the "least among us," while protecting the UAW protects the $50/hour "aristocracy" of the labor movement . That must be it. I wonder which course the Democratic party dogma prefers.] ... 10:29 P.M.

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