Auto worker unions are a mixed bag of blessings for workers. On the one hand, they use the collective bargaining power of bloated memberships to ensure high wages, benefits, and good working conditions, eliminating the abuses of power that corporate giants can wield to keep individual workers under their thumb, so to speak.
On the other hand, the deals unions make can be so cost-prohibitive for employers that they ultimately decide to outsource operations, cutting local jobs and decimating entire local economies (just look at the auto industry in Michigan). On top of that, unions can charge their members exorbitant dues and demand that they go on strike to prove their collective power, forcing businesses into acceding to demands during contract negotiations. In the meantime, it’s the workers who go without pay and risk their livelihoods for a few cents more an hour that they may not even necessarily be clamoring for.
There was a time when unions were needed. A century ago, manufacturers abused workers with low wages, long hours, and the constant threat of firing if anyone complained. Nowadays, things are a little bit different. Not only is there a heightened level of transparency in business operations, but disgruntled and mistreated workers aren’t shy about posting their gripes online and through social media, pleading their case in the court of public opinion and letting consumers decide.
Where does this leave the automotive industry? Are unions and American car companies even compatible in this day and age? Are unions still necessary and wise or are they actually hurting the American workers they’re meant to protect?
How Unions Hurt American Industry
Innovations that lead to rapid success often leave a bit of a gap when it comes to regulatory concerns. The most recent example of this, of course, is the growth of the internet, which we’re still trying to figure out how to properly police. A century ago, it was the birth of the American automobile industry.
In the wild west of early automotive manufacturing, production ramped up quickly to meet a growing demand, and companies looking to establish themselves and maximize sales and profits took advantage of workers. With legislators struggling to impose rules and regulations on a burgeoning industry, workers got ground under the wheels of commerce.
It wasn’t until the 1930s that the United Auto Workers Union (UAW) formed to protect workers against unfair factory conditions and force automakers into fair practices. At the time, this was a necessary step to protect the rights of workers, but unions quickly gained power and turned the tables on automakers.
Over time, the demands of unions grew, and because of their collective power, they gained the upper hand. Eventually, hiring American workers became so cost-prohibitive that automakers were forced to shut down American manufacturing plants, laying off hundreds or thousands of workers in the process, and move jobs overseas to countries with more affordable labor, lest they risk going out of business completely.
How Unions and American Car Companies Hurt American Workers
Unions that initially protected workers have become more of a liability these days. Not only has auto manufacturing moved largely to other countries at this point, but unions still get their pound of flesh from workers through imposed deductions from paychecks. This is money workers will never get back, although it ostensibly goes toward their benefit.
Unfortunately, union members have little say over where their money goes. It’s often spent on lobbyists who wine and dine politicians that workers may not even support. In this day and age, the union system simply may not be in the best interest of workers anymore.
Looking to the Future
The automaker bailouts just a few years ago were a real missed opportunity to reimagine the American auto industry. The banks could have flipped the script and demanded nearly anything in exchange for funding to save these companies. They could have asked for union-free manufacturing, bringing jobs back to American workers from overseas. Unfortunately, they failed to secure such a deal, and the cycle of unions and American car companies continues and will likely lead to the same miserable outcome.
Modern-day unions have a stranglehold on American automakers and they’ve put them in an untenable position. There’s just no getting around the fact that American workers can’t compete against countries like China where workers are satisfied with a fraction of the salary and benefits. In some ways, unions have served as the death knell of a purely American auto industry.
Still, there is a vast market for buying and selling cars. If you’re looking for an online platform to buy, sell, and trade cars, look no further than DealerStrip, which helps to connect dealers and consumers.