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Can't get by on $87K/year? Well Boo Hoo

by JP Bill / September 30, 2005 11:57 AM PDT
Autoworkers crying poor in new reality

Jim Mateja
Knight Ridder

Friday, September 30, 2005


After months of U.S. automakers crying that they are reeling from the cost of health-care and pension benefits for the United Auto Workers comes word that union members are crying poor, too.

Up to their ears in debt, about 10% of United Auto Workers members are filing for bankruptcy.

With so many tears being shed, you may want to wear boots the next time you visit Detroit.

While the cash-rich automakers complain that more money is going out for health care and pensions than coming in from vehicle sales, the affected UAW members say they can't cover the payments on their vacation houses, second or third cars, bass boats and/or snowmobiles with their overtime pay. Overtime pay has been scaled back because plants have cut production to reduce inventory or prevent its buildup with sales slumping.

The Detroit News has reported that one worker lost US$16,000 in overtime pay, had to survive on only US$87,000 in wages, and now is in debt for US$469,000. The typical UAW member earns about US$54,000 a year in straight time, though pay rises based on job classification.

Another found himself more than US$300,000 in debt when his overtime stopped but the bills didn't for his satellite dish, vacation cottage and two pickup trucks.

The Detroit News says union members have lost five hours of overtime each week, or US$10,000 each year, since 1997.

Though union members get 95% of pay when a plant is idled and they are laid off, their contract doesn't provide them with overtime pay when a plant operates on a regular eight-hour shift.

Besides the loss of overtime, bonuses have shrivelled because they are based on automakers' declining earnings. For a typical Ford employee, the Detroit News says, his annual cash bonus went from US$6,700 in 2000 to US$600 in 2004.

Little wonder the UAW resists suggestions that its members, who under the current contract don't have to come up with a co-pay on prescription drugs, volunteer to make that contribution in the next contract.

You probably won't find many folks outside Detroit sympathizing with those forced to give up the dish or boat to make ends meet. Just as few outside Detroit will feel bad for management that has given the union so many perks it has difficulty paying health-care and pension costs.

But there's some good news in all of this. UAW members, retirees and their immediate families get free legal aid in filing for bankruptcy. That was one of the contract perks awarded by the automakers, who cry that the UAW has too many perks.

Perhaps when the next contract is negotiated next September, the UAW should demand free classes in Economics 101 -- for the hourly workers and management.


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(NT) (NT) Both sides are getting their due now
by dirtyrich / September 30, 2005 12:13 PM PDT
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(NT) (NT) thats when a union gets in
by Mark5019 / September 30, 2005 12:14 PM PDT
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Dam fools get what they deserve!
by gearup / September 30, 2005 12:21 PM PDT

I retired in 1993. My net income is $3,000 a month! I have $$$$'s to spare simply because I dont throw them away. When the automakers begin to cut back and close plants they can all get on soup lines in Detroit for all I care!

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I love the wording ...
by Evie / September 30, 2005 11:58 PM PDT

... Another found himself more than US$300,000 in debt

How does one FIND themselves in this kind of debt?

On the otherhand, no matter how much or little you make, people tend to live according to their income level. Have you noticed that the wide ranging middle class lives largely the same. Tend to own homes (just the size and location differs), furniture (Ethan Allen vs. Levitz), two cars (Lexus vs. Chevy but late model higher end models), TV/DVD/stereo/boat or bike or other toys, etc. (even most of the "poor" have two TV's in their homes for example). I know folks with jobs where they have guaranteed overtime (not union). Their lives are structured around that income stream as if that is their regular salary. Sometimes that chunk is a significant amount of their income -- like 25%, and if they lost that it would be a financial jolt. How many of us could adjust to a 25% pay cut no matter what income level we are at? But, one should be able to adjust eventually without having that much debt!!

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