I woke up this morning to read about two new attacks against workers. The banner headline in the Financial Times (subscription required) reads: "Delphi seeks to tear up labour deals." You may remember that back in November the company's CEO Steve Miller had concocted a deal that would plunge Delphi into bankruptcy, gut the living standards of the workers (cutting wages from $26 an hour to $12.50 an hour) BUT pay executives and senior managers hundreds of millions of dollars in severance packages and bonuses. Even some conservatives have had a dim view of Miller's plan.
Now, the FT reports that Delphi "is set to ask a bankruptcy judge to tear up its labour contract with its 33,000 US blue-collar workers as a way of stepping up pressure on trade unions to accept deep cuts."
While The New York Times makes no mention of the Delphi development, it does have a front-page story on a new hard-line taken by the New York City's transit authority in negotiations with its workers. After the transit workers rejected a proposed contract by just seven votes, the authority has come down with a substanially worse offer.
According to The Times:
The authority's new offer keeps the provision that union members disliked most, a requirement that workers begin contributing 1.5 percent of their wages toward health-insurance premiums, and revives a proposal that had been taken off the table, that new workers contribute more to their pensions than current workers. It also includes provisions dropped early in the negotiations, like the expansion of one-person train operation.
In addition, the authority's new offer eliminates a provision that delighted many workers — a pension refund that would give thousands of dollars to about 20,000 union members who made overpayments from 1994 to 2001.
So, here are some thoughts. Why do we sit by and allow the bankruptcy laws to be used to bludgeon workers, particularly while executives make off with millions of dollars? Executives at these companies are essentially engaging in legalized looting--using the cloak of the law to force concessions from the average worker in order to enrich themselves.
Where is the Democratic Party? The corruption story that should really be making the front-page news every day and spark press conferences with outraged politicians performing before the cameras is these outrageous looting of companies at the expense of millions of Americans. From where I sit, the story of Jack Abramoff is nickel-and-dime stuff--though certainly part of a corrupt pattern.
The big story is how politicians from both parties aid and abet the construction of a legal system that makes it possible for a guy like Steve Miller to screw his workers and enrich himself. United Airlines executives are doing the same thing (millions of dollars will be pocketed by execs after workers have given $4 billion in concessions).
At a minimum, we need to change the bankruptcy laws. If a company goes into bankruptcy, if its going to demand wage cuts from its workers, executives have to be hit with the same proportional hit to their pay and benefits. And, as an aside, the law should prohibit companies from using bankruptcy to shred pensions--because pension money, after all, really belongs to workers (it is their compensation that they've deferred to a later date).
And where is the Democratic Party demanding that, as a part of any of these concession demands, companies commit to endorsing and working to enact Medicare For All? After all, rising health care costs are a major factor hitting the bottom line of many companies in distress (certainly, airline and auto companies). It's idiotic to think you can just hit workers now as a way of turning around a business if you ignore a central structural cost that can be solved with national policy.
Same goes for the transit authority. No deal should be made that includes a provision for health care concessions without a commitment on the part of the authority to embrace Medicare For All.