CNBC’s Jim Cramer is upset. Very upset.
United Auto Workers’ President Shawn Fain laid out the demands they’re putting forward as the UAW negotiates new contracts with Ford, GM, and Chrysler to replace those expiring on September 14th.
The UAW is asking the automakers to stop using “temporary” workers to replace union members, to increase paid time off, for an end to the two-tier wage structure, to restore health benefits, for annual cost-of-living adjustments, and a small increase in pension benefits both for current and future retirees.
“This man, Shawn, who is just talking about capitalism and the nature of capitalism and how it’s really hurt workers,” Cramer said. “It’s the kind of language where you say, ‘You know what, we should have built all our [electric vehicles] in Mexico.’ It’s that bad!”
Cramer is right about Mexico: when automakers move their factories offshore they can find cheaper labor, which means more profits for the company, its executives, and its shareholders. And CEOs love the idea of doing exactly that.
Which is why most countries have tax and labor laws to discourage that very practice. We did, too, before the Reagan Revolution.
The NAFTA agreement that Reagan and Bush negotiated (and Clinton signed), for example, explicitly encouraged automakers to move their factories to Mexico, and many did.
Trump’s tax cut for billionaires and corporations also included a provision that cut in half a tax on companies that move their manufacturing to Mexico: as a result, just after it passed the Senate in 2017, Ford announced it was going to build its newest factory in Mexico instead of Michigan.
In that, Trump was simply following the neoliberal template Reagan outlined when he set out to destroy the union movement in the US. For Reagan and the GOP, it was a twofer: in addition to increasing the profits of their wealthy donors, it also crippled the fundraising of the Democratic Party, which had historically been heavily dependent on union contributions.
The result was that working people did poorly, unions did poorly, and the morbidly rich became much, much richer.
UAW President Fain pointed out the 40 percent pay increase all three companies’ CEOs have taken over the past four years, noting the $29 million GM’s CEO received in 2022. It would take an entry-level worker at a GM joint venture battery plant, Fain said, 16 years to earn as much as that one CEO makes in one week.
In response, Jim Cramer shouted (as is his wont) in outrage because of the union president’s comment:
“That’s class warfare! And it’s very shocking to hear class warfare!”
During the following commercial break, he no doubt had to retire to his fainting couch. Instead, he might have pondered billionaire Warren Buffet’s famous 2006 quote from The New York Times:
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Unions are literally democracy in the workplace. Workers get a say in the terms of their employment, their pay, and their working conditions; in exchange, employers get a stable workforce and predictable production.
Unions were legalized in the United States in 1935 with the Wagner Act (aka the National Labor Relations Act), and as union density increased, so did wages of working-class people. By the 1970s, about a third of all American workers had a good union job, and another third of workers (generally working for smaller companies) had its equivalent because unions set the local wage and benefits floors.
That was all blown up, of course, when Reagan declared war on unions and radically cut taxes on CEOs and the morbidly rich. Notice what happens around 1981 when Reagan took office.
Today, only about ten percent of American workers in the private sector have union benefits and protections, a number that’s gone up by a few points over the past three years.
Similarly, per-worker productivity has inexorably increased since the first days of the industrial revolution, a trend that continues to this day. As long as working people had unions advocating for them, their share of the profits — derived from that increased productivity — grew along with the productivity itself.
Until the Reagan Revolution.
By gutting workers’ ability to collectively stand up to organized money (a corporation), Reagan devastated the income of working-class people and drove literally $51 trillion from them up into the money bins of the morbidly rich.
Very simply, a corporation is organized money and the only way to balance that power is through organized labor.
Under President Biden, the Department of Labor (DOL) is again protecting the rights of workers to unionize and strike for reasonable benefits and wages. As a result, since Trump left office and the DOL started supporting unions again:
— United Airlines Pilots negotiated a pay raise of up to 40 percent after years of stagnant wages
— UPS came to a tentative agreement that vastly improves its workers’ wages and benefits;
— Amazon employees in Bessemer, Alabama and Staten Island, New York have achieved union status
— John Deere workers gained a 20 percent pay increase
— Kellogg employees received cost-of-living pay raises and better starting wages
— Starbucks workers in Buffalo succeeded in kicking off unionization of that company
— Even the REI store in Manhattan has begun the unionization process
— Apple store employees in Towson, Maryland joined a union
— Trader Joe workers in Massachusetts joined the growing union at that company
— SAG/AFTRA and the Writer’s Guild of America are both on strike now
— Michigan medical technicians joined the nurses’ union
— Postdoctoral researchers at Icahn Mount Sinai School of Medicine won the right to
— Southern Maine Public Transit Workers formed a union with the ATU
— Cannabis workers in Colorado and San Diego formed their first union
— Nevada state employees got their first union contract
— Ski patrollers in Colorado created their first union
— The ACLU was unionized for the first time
— Portland Museum of Art workers joined the UAW
— Maine’s Bath Iron Works employees earned a generous new contract
— Tech workers at Glitch secured their first union contract
— Comcast workers in Massachusetts, after a 7 year battle, negotiated a contract
— The list goes on, including many more victories since the Biden administration has thrown their weight behind unionization efforts.
And it’s all righteous. As Abraham Lincoln said in his First Inaugural Address on December 3, 1861:
“Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
Lincoln was the first US president to openly support unions; the existence of such workers’ groups was so novel that when newspapers of that era reported on them they put the word “union” in quotation marks.
But Lincoln was right. No matter how much money Mark Zuckerberg or Jeff Bezos or Elon Musk may have, the vast majority of it was earned through the hard work of their employees.
Without other people’s labor, they’d just be three guys with good ideas and the ability to hitch a ride to the local food stamp office.
Republicans in Congress have blocked the PRO Act — which would give workers the right to easily unionize in the workplace without having to suffer through draconian anti-union efforts including years of forced meetings and threats of firings.
President Biden spoke out against the GOP and in favor of the PRO Act recently in Philadelphia, saying:
“Nothing has made me prouder than to be called the most pro-union president in history. I promised you I would be, and I commit to you as long as I have this job I will remain that.”
If we can keep the White House — and, thus, the Department of Labor — in Democratic hands, the upward progress of American working people will continue to increase.
And that’s a good thing for everybody, including the morbidly rich and their stalwart servant Jim Cramer.
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