Sunday, December 14, 2008

Repbulican UPSIDE-DOWN sector-wide labor contracts

Insistence that GM's autoworkers reduce their pay to the level of foreign brand workers sounds like UPSIDE-DOWN sector-wide labor agreements to me. Under sector-wide as practiced in normal first-world labor markets and even many second and some third world markets, NON-unionized employees work under contract conditions negotiated at unionize firms.

Didn't Keynes say that a recession is not the time to reduce wages?

Better we use the GM troubles to introduce the concept of "traditional" sector-wide contracts here (at last!). If we had it all along GM would not be in much of the trouble it is in. Honda and BMW will gladly pay full UAW wages to manufacture here -- the more especially if people really prefer their products. (Potential UAW givebacks on benefits would still be whatever they are going to be.)

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