What Would You Do?

Here’s another hypothetical for you: Suppose your employers announced that because of some really asinine choices made by their senior management team, some of which were so bad that they actually did bankrupt the company, you and your coworkers were going to be required to take a 50% cut in pay. That’s right; not a 10% reduction or even a 25% cut, but half of your current salary is going away. When you protest that this isn’t fair, and you can’t afford to live on such a salary, your managers tell you that the new, lower wage is about the industry standard these days (since your entire industry is in the tank); when you say you won’t accept the pay cut, they tell you that if everyone in the workforce does not accept it they’re going to close the factory and lay off everyone. Now, my question is, would you still refuse? Would your answer be different if you knew you could transfer to another facility owned by the same company and retain your current salary in the event of a plant closure?

Before you answer that, consider that your plant is one of the largest employers in the city you live in; even if all of the people who work there are able to transfer to other locations in other states there will be a domino effect as all of the businesses that provide you and your coworkers with food, shelter, clothing, transportation, entertainment and various services will lose thousands of customers, the city itself will lose tax revenue (from the plant being gone and from all of the former workers leaving, and from all of the collateral damage mentioned above) and have to restrict or eliminate even basic services, other manufacturing companies may flee the expanding urban blight, and your entire community could spiral into the sort of decay that causes everyone to move to less doomed places like Detroit. Are you still going to walk away?

Given where you’re reading this story, you already know that there’s a real case going on where this is actually happening; you can find the original story here if you want to. A union supporter would tell you that the union people had no choice but to reject the offer; making that sort of concession would have dramatically lowered the power and leverage of the union and placed all of its members in danger of further abuse by management. A management supporter, on the other hand, would point out that the union effectively demanded that the new owners continue paying their people double the industry standard for those jobs, that the rejection of this offer has a real chance of turning the workers’ community into a ghost town, and that any of them who can’t transfer will end up having to take the standard wages offered in the industry anyway – thus, effectively leaving them with the same situation they would have been in if they’d just accepted…

The people I feel sorry for in all of this aren’t the owners (as noted elsewhere in this space, the American auto industry dug its own pit and jumped into it willingly), nor even the union employees (the UAW leadership has been guilty of a few hair-brained moves of its own), but rather the people in the community who have been supplying goods and services to the company and to the people who worked there, many of whom are about to see their own businesses bankrupted and their own lives destroyed in the fallout. I’m not saying that I’d accept a 50% pay cut, or that I’d just go along with paying people double the industry standard for their positions; I’m just saying that there ought to be a better way. And I might add that unless we start looking for other possibilities, the decay of the American manufacturing sector is only going to get worse…