Furloughs & Pay Cuts: A Sign of the Times–Unless You’re in the UAW

By John Hollon

Jan. 23, 2009

I’ve said it before and I’ll say it again: Desperate times call for desperate measures. Although everyone seems to tiptoe around what to call the economy we’re in (Downturn? Recession? Wanna-be depression?),  it’s clear that businesses and organizations everywhere are swallowing hard and making some tough decisions to get through this difficult time.

Although I have been writing about things like the rise in forced workforce furloughs as a cost saving measure, the full impact of what so many organizations are doing didn’t really hit me until I read this Associated Press story in the Chicago Tribune this week: “More employers are freezing pay –even the White House–as recession deepens.

The message here is pointed: Pay freezes, furloughs and pay cuts are preferable to cutting more jobs, and workers everywhere are reluctantly agreeing to go along with the program.

“It’s a real tectonic shift,” said Terry Connelly, dean of Golden Gate University’s Ageno School of Business, who talked to the Associated Press.

“The extraordinary pace of layoffs has shifted people’s internal calculations to the point where they are not only willing to take a pay cut to save their own job, but also take a freeze to save their co-worker’s,” he said.

I don’t know anyone, anywhere, who likes taking a pay cut, or enjoys being forced into an unpaid furlough, but most workers have bought into the premise that these measures are a “shared sacrifice” that they are willing to make to help their organizations get through this tough period.

It’s a reminder that our country was built on this notion of shared sacrifice, and that most Americans are selfless enough to rise to the occasion and do it again when needed.

So furloughs and pay freezes are a sign of the times, of our shared sacrifice, and something we can all be proud of. Unless, of course, you work for the United Auto Workers.

The United Auto Workers union will sacrifice to help General Motors and Chrysler get their federal loans, but doesn’t expect to take lower wages,” UAW president Ron Gettelfinger said this week at the Automotive News World Congress. (Automotive News is a sister publication of Workforce Management.)

The story went on to say that “Gettelfinger also said automaker executives have indicated publicly that wage concessions would not be required of the union as part of federal bailout provisions being demanded of GM and Chrysler. “We’re not expecting lower wages,” he said, despite the fact that “the federal government made union concessions a major condition of a $17.4 billion loan package to GM and Chrysler.”

I don’t know about you, but I find this attitude by the UAW amazing, given that the federal government is going to spend many billions of dollars to bail out the three American automakers. Even House Speaker Nancy Pelosi, a strongly liberal friend of organized labor if there ever was one, said she expected all the major players in the American auto industry–including dealers, suppliers and investors–to take “a haircut” as part of the federal bailout.

This is the problem I have with organized labor: It doesn’t buy into the notion of shared sacrifice, even though the America auto industry is much worse off than so many other business sectors where wage freezes, unpaid furloughs and salary cuts are the order of the day.

Rather than focusing on heavy-handed legislation like the Employee Free Choice Act and its frighteningly wrongheaded notion that the secret ballot shouldn’t apply to unions, maybe Ron Gettelfinger and his union brethren should look at the tough choices other businesses and organizations are making all around them and see that pay adjustments are something that many, many workers are having to swallow.

Desperate times do indeed call for desperate measures.

Do American autoworkers and their union masters understand that they aren’t immune? That they also have to submit to hard choices and shared sacrifices needed to get through these times?  The survival of a proud and influential American industry hangs in large part on the UAW’s ability to come up with the right answer.

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