Ford proposed a new plan to Congress today with various components, which included Ford CEO Alan Mulally volunteering to accept a salary of $1 for a year. But part of the plan also includes negotiating with the United Auto Workers to cut their “labor costs”–in other words, Ford is seeking pay cuts for its workers. I understand the mentality: to save the company everyone needs to make sacrifices.
But what I wonder is if cutting workers’ wages really accomplishes the plan of stopping economic hardship. Despite claims of $70-an-hour union workers, unionized auto workers are squarely in the middle class, the economic group that’s seeing the most squeeze in this economic recession. They’re still paying taxes, but with inflation and pay freezes, the middle class is seeing their real wages shrink. By asking the unions to drop securities for their members and cut wages, the companies may actually make the economic situation worse for the average worker.
Cross posted at Pushback.