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Forums - General Discussion - So Detroit is now Bankrupt...

Kasz216 on 24 July 2013
theprof00 said:
Mr Khan said:

Hostess negotiated with their union in bad faith. They once told the workers to dodge a pay raise for the good of the company as a whole (to avoid bankruptcy!) the workers did so, the first time. Trouble was, Hostess took those savings and spent them on Executive Pay and the company continued to nosedive. So the *second* time Hostess came around and told the Union "pay cut or we go broke." The Union rightfully said "screw you."

On the part of the US Postal Service, aside from their collapsing revenue base (direct bulk mailing is what keeps them afloat now), the thing really crippling them is their "you must pre-fund your pensions for 75 years" thing, a law which was passed, by Republicans, specifically to cripple the USPS.

There are examples of greedy unions out there, but Hostess and USPS are both examples of right-wing malice and/or incompetence.

Yaknow, I just thought USPS was doing badly because they charge much less for the same service as any other carrier.

Boy was I wrong. In fact, it appears as if Congress is readressing this issue shortly. Man...having to pay 5.5B a year rather than pay what it actually owes. wtf? I'm with Khan on this. Stephen Lynch tried to fix this more than 2 years ago, and FL and CA republicans instead proposed that the usps workers fix it themselves, and said they would work against REPAYING 80B in overpaid pensions. 80B is a lot of fucking money.

The USPS hasn't overpaid their Pension plan.

Essentialy what happens is legally the USPS has agreed to prefund pension plans a lot more then most other companies/agencies.  Which almost  nobody else does.  Which coincidentally is why retirees like the ones in detroit are getting screwed.

 

http://www.govexec.com/pay-benefits/2011/10/gao-no-refund-for-usps-overpayment-to-retirement-account/35150/

The USPS says they're overpaying based on what private companies have to pay.

The "overpayment" claim is made by them claiming a new formula more in line with what people pay into pension plans ahead of time now.  (Almost nothing... so they can screw over retirees whenever they have too.  Hence why people at GM lose value in their pension plans when they no longer even have a union vote for their contracts.)

 

Essentially they are trying to screw over retirees by making claims that make republicans look like the bad guys while they secretly raiding the pension fund.  It's essentially the EXACT kind of thing you and Khan would normally be against,(and should be!) clouded by blaming republicans. 

It's a hatchet job attempt to screw retirees in one of the few jobs where their pensions actually are mostly guranteed rather then false promises only honored when times are good.  Dumping retirees on welfare whenever times turn bad.

 

Jobs that have pension funds should require a sane level of guranteed pension funding to protect retirees form getting screwed whenever a company hits hard times and bosses and current union workers both agree THEY don't want to face immediate cuts.



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Mr Khan on 24 July 2013
timmah said:
Mr Khan said:
Marks said:
the2real4mafol said:
 

Oh so whenever a industry fails, always gotta blame someone like the unions have you? You don't realise how useful trade unions are do you? Without them, we would still be working 16 hours a day for a few dollars a day. The work would be deadly due to a a lack of safety regulations. There would be child labour. The workplace would be filthy. The factories would be far more polluting. You could just go to a Chinese or Indian factory and you would see what your work would be like without the imput of trade unions all because the companies are just greedy. I'm sure they could get there products made in a developed country and still make money.

Without trade unions, i'm sure companies would go back to their exploitative ways. Without no one pushing for the worker to get the best deal, wages would remain flat despite inflation. They would get away without allowing people to have holidays off every now and then or have sick pay. The way i see it why should the lazy executive get millions and yet the hard working people who make the products, the workers get barely enough to live on? 

And another thing, if American car companies want to be popular again, they need to make fuel efficient cars now. 


Really, you think if unions disappeared today that all of a sudden people would be forced to work 16 hours a day with no overtime pay, no safety equipment, and in filthy environments? 

No, the free market (which includes the employee/labour market) would force companies to improve conditions or else have their workers quit and work for the competition. If the factory across the street has high tech safety equipment and offers better pay, you can either match it or see your staff flock out like bats out of hell. The free market works as well, if not better, than goverment in all instances. 

Workers quit and go where? Labor is a buyer's market, inherently, and all companies would push wages down as low as they felt they could for the job to still be "worth it" (and not in terms of what the job is fairly worth, but that you can hit a point where the pay is so low that people would just rather go on welfare)

If that were actually true, then why are only 6% of employees paid minimum wage? Oh, because labor competition is what actually sets wages.

Some interesting stats on this...

  • Only about 6% of the workforce actually makes at or below minimum wage at any given time
  • The vast majority of these are young people and/or people with very little education or in part time positions
  • The industry with the highest number of people making these low hourly wages is the foodservice industry, where tips make up the difference, leading to actual incomes generally above minimum wage. If you take these out (since they make more than minimum wage when you include tips), the above figure would drop much lower.
  • Almost nobody STAYS at minimum wage, unless in a tip-based position, but they make more than the statistic suggests anyway

The fact is, as long as you get a halfway decent education, there's absolutely no way you should be stuck in a minimum wage position. Hell, I worked at a fast food restaurant while in high school and was only at minimum wage for 3 months there! If companies could really 'push down' wages without a minimum wage as you (wrongly) suggest, they should be able to 'push down' wages to the minimum wage with one in place, but that's not the case. Why do the vast, overwhelming majority of workers (in both union and non-union positions) make above the minimum wage? There's no law stating they have to pay their employees what they do.. It's because the market has set reasonable value on those jobs, not a government regulation.

That's a fact, Jack!

EDIT: If employers really had the power to just go as low as they wanted, why is the average hourly earnings in the US about $24? http://www.bls.gov/eag/eag.us.htm . The current minimum wage has almost zero impact on real hourly rates.

Does that "average" earning take into account the people who make $1000 in the time it takes to sneeze?

As far as we can tell in the meanwhile, most people on the minimum wage are NOT teenagers, but are "full" adults, and 40% of them are classed as breadwinners (pulled from... somewhere in the Department of Labor).

As for the questions of why companies would try to push down? Even for professional positions, companies are trying to find ways to get away with paying people little to nothing, but they call them internships. Fortunately unpaid, work-producing internships for for-profit companies are in the process of being outlawed. Next they just need to crack the non-profit sector.

You do make a valid point that a company's desire for long-term worker retention usually leads to seniority-based pay raises even for low-end positions, but the entry level wage would certainly sink across the board (until it hits that dirt-poverty threshold. But then again, internships dodge the dirt-poverty threshold and still people compete for them) if the laws mandating it vanished.



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Kasz216 on 24 July 2013
TheLastStarFighter said:
 American car companies have just always been very inefficient and slow to adapt. Poorly designed vehicles, poor quality and ridiculous levels of redundancy (To think that Chrysler's new Pentastar engine replaced something like 6 or 8 crappy, different V6's used throughout their company line!!?!?!).

That in of itself is pretty unfair.   The US Automakers were set for HUGE returns with well made cars.  The problem was, those cars were SUV's and the SUV bubble burst due to all the crazy gas price increases.



timmah on 24 July 2013
Mr Khan said:
timmah said:
Mr Khan said:

Workers quit and go where? Labor is a buyer's market, inherently, and all companies would push wages down as low as they felt they could for the job to still be "worth it" (and not in terms of what the job is fairly worth, but that you can hit a point where the pay is so low that people would just rather go on welfare)

If that were actually true, then why are only 6% of employees paid minimum wage? Oh, because labor competition is what actually sets wages.

Some interesting stats on this...

  • Only about 6% of the workforce actually makes at or below minimum wage at any given time
  • The vast majority of these are young people and/or people with very little education or in part time positions
  • The industry with the highest number of people making these low hourly wages is the foodservice industry, where tips make up the difference, leading to actual incomes generally above minimum wage. If you take these out (since they make more than minimum wage when you include tips), the above figure would drop much lower.
  • Almost nobody STAYS at minimum wage, unless in a tip-based position, but they make more than the statistic suggests anyway

The fact is, as long as you get a halfway decent education, there's absolutely no way you should be stuck in a minimum wage position. Hell, I worked at a fast food restaurant while in high school and was only at minimum wage for 3 months there! If companies could really 'push down' wages without a minimum wage as you (wrongly) suggest, they should be able to 'push down' wages to the minimum wage with one in place, but that's not the case. Why do the vast, overwhelming majority of workers (in both union and non-union positions) make above the minimum wage? There's no law stating they have to pay their employees what they do.. It's because the market has set reasonable value on those jobs, not a government regulation.

That's a fact, Jack!

EDIT: If employers really had the power to just go as low as they wanted, why is the average hourly earnings in the US about $24? http://www.bls.gov/eag/eag.us.htm . The current minimum wage has almost zero impact on real hourly rates.

Does that "average" earning take into account the people who make $1000 in the time it takes to sneeze?

As far as we can tell in the meanwhile, most people on the minimum wage are NOT teenagers, but are "full" adults, and 40% of them are classed as breadwinners (pulled from... somewhere in the Department of Labor).

As for the questions of why companies would try to push down? Even for professional positions, companies are trying to find ways to get away with paying people little to nothing, but they call them internships. Fortunately unpaid, work-producing internships for for-profit companies are in the process of being outlawed. Next they just need to crack the non-profit sector.

You do make a valid point that a company's desire for long-term worker retention usually leads to seniority-based pay raises even for low-end positions, but the entry level wage would certainly sink across the board (until it hits that dirt-poverty threshold. But then again, internships dodge the dirt-poverty threshold and still people compete for them) if the laws mandating it vanished.

This takes into account those who make an hourly wage, the 'rich' are generally salaried.

You miss the point that only 6% of all workers make minimum wage (about 4% if you factor out tip-based positions, which you should) or lower at a given time, 50% of those are young people, 30(ish)% in the service industry (so most likely make more), that leaves the rest who are generally TEMPORARILY at that low a wage, are part time (not the breadwinner), are just starting in a position, and/or are extremely low skilled. Even so, the extremely low skilled worker will generally not be at minimum wage permanently. Again, if your hypothesis were true, there should be a far larger, and more statistically significant portion of the population making the minimum.

It is a near statistical impossibility for anybody with half a bran, a high school diploma, and a decent work ethic to be in a minimum wage position long-term. This is undeniable.

Even though most of the poplulation will literally NEVER make minimum wage, those that do DO NOT stay there, period. Your hypothesis just doesn't match up with the reality of how the market works.

Hell, even the average cashier at WalMart makes about $10/hr!

EDIT: In a good economy (more robust job market), the percentage at minimum wage is about half, so again, market sets wages...



the2real4mafol on 24 July 2013
Kasz216 said:
TheLastStarFighter said:
 American car companies have just always been very inefficient and slow to adapt. Poorly designed vehicles, poor quality and ridiculous levels of redundancy (To think that Chrysler's new Pentastar engine replaced something like 6 or 8 crappy, different V6's used throughout their company line!!?!?!).

That in of itself is pretty unfair.   The US Automakers were set for HUGE returns with well made cars.  The problem was, those cars were SUV's and the SUV bubble burst due to all the crazy gas price increases.

If US cars would be smaller and more fuel efficient, i'm sure they would shift. I guess these companies haven't adapted yet but surely it's a good thing fewer people can afford these wasteful cars. Something expensive oil is good for. 



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ManusJustus on 24 July 2013

Detroit, like most major cities that haven't already done this, needs to have a unified government with it's suburbs to offset urban sprawl. People drive into the city to work but live and pay taxes in the suburbs. Detroit has a population of 700,000 but the metro area has a population of 5 million, combine the metro into one government and the wealthy suburbs will offset the poor inner city.



MikeRox on 24 July 2013

Maybe they should look at how the UK car production industry has transformed itself over the past decade or so. Production levels are higher than they have been in a long time.

Baffling that the suburbs are part of a different government/funding stream than the central areas. US government is so different to the UKs (my local government/council actually incorporates several towns and all their surrounding areas as one metropolitan borough)



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the2real4mafol on 24 July 2013
TheLastStarFighter said:
I work as a city manager, so I find this topic especially interesting. I don't have an opinion on it yet though, so I want to learn a bit more on Detroit's situation and come back to it.

People blaming the UAW are a bit off though. German auto workers are actually much better compensated than American ones. American car companies have just always been very inefficient and slow to adapt. Poorly designed vehicles, poor quality and ridiculous levels of redundancy (To think that Chrysler's new Pentastar engine replaced something like 6 or 8 crappy, different V6's used throughout their company line!!?!?!).

Strong Unions (or well-compensated non-union workers) are very good for the overall economy by re-distributing wealth and creating balance. The major problem in today's western economy is that for decades manufacturing has been moving to Asia. You can't constantly be funneling money from your country into another for all of your manufactured goods and expect it not to eventually destroy your economy. Western countries desperately need to tariff countries where manufacturing workers are not well compensated in order to create a fair global economy. The problem is not that workers in the US (or elsewhere) are too well paid, but that workers in other countries are not paid well enough. Executives for large corporations have managed to convince many in the public that US workers are spoiled as an excuse to use near-slave labour in other countries. US voters should be demanding trade tariffs so that UAW members are not looked at as getting too much, but rather so that other workers in other manufacturing sectors can also be making as much.

Agreed if only more people would see this way. To keep the economy in check we need to maintain manufacturing to an extent. But i think the developing world need tariffs more than the developed world do. They need to build their own industries while we already have ours, moving our companies to their countries only damages their industries, which lack abit due to less infrastructure. Part of the developed worlds problem is tax avoidance from these big companies too who get away with putting in tax havens like Switzerland and the Cayman Islands.

As usual, the real problem stares us in the face and yet ordinary people are lead to believe themselves and their action are the problem. It's amazing what manipulation of media can do. I also think that's what allows such spineless and shitty leaders to rule as they can just lie there way in.

It's sad really but hopefully this recession is a turning point, i would like to think we have learnt our lesson on the economy and look at the countries that have been the least affected by the recession and learn from them. Scandanavia, Germany, Korea, Australia seem to be doing fine. 



Xbox One, PS4 and Switch (+ Many Retro Consoles)

'When the people are being beaten with a stick, they are not much happier if it is called the people's stick'- Mikhail Bakunin

Prediction: Switch will sell better than Wii U Lifetime Sales by Jan 1st 2018

Kasz216 on 24 July 2013
the2real4mafol said:
Kasz216 said:
TheLastStarFighter said:
 American car companies have just always been very inefficient and slow to adapt. Poorly designed vehicles, poor quality and ridiculous levels of redundancy (To think that Chrysler's new Pentastar engine replaced something like 6 or 8 crappy, different V6's used throughout their company line!!?!?!).

That in of itself is pretty unfair.   The US Automakers were set for HUGE returns with well made cars.  The problem was, those cars were SUV's and the SUV bubble burst due to all the crazy gas price increases.

If US cars would be smaller and more fuel efficient, i'm sure they would shift. I guess these companies haven't adapted yet but surely it's a good thing fewer people can afford these wasteful cars. Something expensive oil is good for. 

Oh they've shifted since they bailout.  It's just they weren't prepaired for the huge gas shock after people basically spent a decade saying "fuck you" to gas efficent cars, with more and more people wanting SUVs.



theprof00 on 24 July 2013
Kasz216 said:

The USPS hasn't overpaid their Pension plan.

Essentialy what happens is legally the USPS has agreed to prefund pension plans a lot more then most other companies/agencies.  Which almost  nobody else does.  Which coincidentally is why retirees like the ones in detroit are getting screwed.

 

http://www.govexec.com/pay-benefits/2011/10/gao-no-refund-for-usps-overpayment-to-retirement-account/35150/

The USPS says they're overpaying based on what private companies have to pay.

The "overpayment" claim is made by them claiming a new formula more in line with what people pay into pension plans ahead of time now.  (Almost nothing... so they can screw over retirees whenever they have too.  Hence why people at GM lose value in their pension plans when they no longer even have a union vote for their contracts.)

 

Essentially they are trying to screw over retirees by making claims that make republicans look like the bad guys while they secretly raiding the pension fund.  It's essentially the EXACT kind of thing you and Khan would normally be against,(and should be!) clouded by blaming republicans. 

It's a hatchet job attempt to screw retirees in one of the few jobs where their pensions actually are mostly guranteed rather then false promises only honored when times are good.  Dumping retirees on welfare whenever times turn bad.

 

Jobs that have pension funds should require a sane level of guranteed pension funding to protect retirees form getting screwed whenever a company hits hard times and bosses and current union workers both agree THEY don't want to face immediate cuts.

Can you prove this though? They are the only company in the USA (and likely the world) that pays so high a rate ahead of time.
You say "Oh the outrage they're talking about is that they can't fuck over pensioners like other companies". I find the two ideas to be extremely different. Are you saying that virtually every company in the USA is fucking over their pensioners?