Some time ago a friend suggested that we begin referring to the Republican party as simply the “Low-Wage Party,” since the only consistent theme throughout all Republican platforms seemed to be pushing down wages for the majority of Americans -- presumably so that a minority could scoop up what was left on the table.
Of course the current appellation for the Republican party is, correctly, The Party That Wrecked America (or perhaps the even more grandiose and accurate The Party That Wrecked The World). But if things ever get back to some sense of normalcy, I wonder if, on a day-to-day basis, it wouldn’t make sense to take my friend up on his recommendation and in conversation, casual to formal, refer to the party by its ideological foundations.
Meaning refer to the party as The Low-Wage Party and party members as Low-Wage Republicans.
Nothing made me think more about this than watching the auto-industry bailout spectacle unfold on television where Low-Wage Republican after Low-Wage Republican stepped up to the podium to make the argument that the solution to saving the domestic automotive industry lay not in managerial reforms at the wayward companies but in cutting the company’s workers.
"Seventy-five dollars an hour isn’t what Detroit is paying UAW workers, not even close."
Congressman Spencer Bachus of Alabama, one of the lowest-wage states in the Union, made the case saying: “I’m sure that I’m going to be asked, ‘Congressman, I work at Honda’ or ‘I work at Mercedes. I get $40 an hour. Why are you going to take my tax dollars and pay it to a company that’s paying their employees $75 an hour?”
Which sounds like a hard question to answer, until you realize that the numbers are cooked.
Seventy-five dollars an hour isn’t what Detroit is paying UAW workers, not even close. Nor is $73 dollars or $71 (two other figures bandied about). It’s what Detroit is paying in total labor costs per hour, which sounds like what it’s paying its workers, except it’s not.
That’s because Detroit figures into its hourly labor costs not only the cost of current labor (the guy bolting the door on the new Pontiac), but also the legacy costs of its retired workers. What it has to pay in pensions and health benefits for those no longer on the assembly line are figured into the costs of those who still are.
And they would be at other manufacturers, like Honda and Toyota, as well -- if they had legacy costs. But neither Honda, nor Toyota, nor BMW, nor Hyundai, have been operating factories in the United States long enough to have accrued significant legacy costs.
There just aren’t a whole lot of guys who have put in 40 years in a U.S. Honda plant and are now livin’ large in Gatlinburg to make a difference.
Lies, damned lies and statistics
The New York Times’ David Leonhardt put the numbers into perspective: of Ford’s $71 an hour total labor cost, $16 of that went not into current worker’s pockets but into paying health care and pensions to retirees. The average among Japanese manufacturers in the United States for the same cost? $3 an hour.
"Detroit figures into its hourly labor costs not only the cost of current labor, but also the legacy costs of its retired workers."
Ford’s current UAW workers take home pay (i.e. what they actually see in their paychecks) is $29 an hour. The average for Japanese plants? -- $26 an hour. The numbers become even more ridiculous when one considers that the average car takes about 23 man-hours to make (domestic or foreign, union or not) and that labor comprises only about 10% of the sticker price of a car.
Thus the $3 an hour difference between a Ford UAW worker and a non-union Japanese worker works out to a price premium of about $70 per car. Ask yourself honestly: is the reason you’re going for the Camry over the Saturn because the latter costs 70 bucks more?
Didn’t think so.
Shooting themselves in the foot
But that distinction-without-a-difference matters not to Low-Wage Republicans who would actually sit back and watch the domestic auto industry collapse, in the midst of the worst economic collapse this nation has ever seen, putting millions more out of work if it meant one thing: breaking the unions.
Which is as mendacious as it gets. But it’s not shocking because being mendacious is what we expect. No one is surprised, after all, when leaving the fox to guard the henhouse delivers a pile of bloody feathers.
But what is surprising is this: the number of middle and lower-class workers willing to not only accept the calculus of the Low-Wage Republicans at face value, but to energetically jump on the bandwagon.
"You can’t sell something to people who can’t afford to buy it."
I’ve heard it from every quarter: 75 (or 29) bucks an hour is just too much to make for a job putting doors on Pontiacs. “I only make $16 an hour, why should they make that much?”
I’ll tell you why: because the unionized workforce sets the wage ceiling. You’re only making $16 an hour because they’re making $29 an hour. You want them to make $16 an hour, instead? Fine, now watch your own pay drop to $7 an hour.
And because of the principle that every true capitalist from Henry Ford to Warren Buffet understands: you can’t sell something to people who can’t afford to buy it. The Low-Wage Republicans believe in a free lunch. They think they can slash the pay of consumers yet see no effect in consumer behavior.
Here’s another take on it, for the Low-Wage Republicans: you’re slitting your own necks. Go ahead and bust the unions, remove the last bulwark holding up the middle-class consumer.
But don’t cry to me when you can’t figure out why no one is buying what you’re making.
Gregory Travis can be reached at email@example.com.