By Steven Rattner
Mr. Rattner served as counselor to the Treasury secretary and head of the White House Auto Task Force in the Obama administration.
After years of labor peace in the automobile industry, about 50,000 members of the United Automobile Workers have gone on strike against General Motors, seeking to redress years of pain, particularly during the 2008 recession and subsequent rescue by the Obama administration.
Having headed President Barack Obama’s auto task force, I’m deeply sympathetic to the plight of blue-collar workers in the automobile industry. But unfortunately, when it comes to the manufacturing sector, where the United States faces global competition, restoring the generous pay and benefits that used to accompany these jobs becomes impossible without jeopardizing the jobs themselves.
The financial challenges of Americans toiling in the auto sector have been building for nearly two decades. Wages for blue-collar workers in the sector peaked (after adjusting for inflation) back in 2002 at $30.90 per hour, which was then roughly 44 percent more than the average for all jobs across the economy. Today, those once-prized jobs pay just $23.48, a thin dime less than what a typical worker across the economy earns.
The principal culprit? Lower wages in emerging countries, particularly Mexico. At $3.29 per hour in 2015 (the most recent date for which reliable data is available), auto workers in that neighboring country were paid less than 14 percent of what the same worker in the United States earned. That didn’t matter so much when Mexican auto employees were less productive than their American counterparts. But even a decade ago, when I was working on the auto rescue, executives at the Detroit companies told me that their plants in Mexico were running just as efficiently as those in the United States.
Since then, that pay gap has been partly closed, but not surprisingly the union wants it closed faster. Meanwhile, the U.A.W. is fighting to preserve for existing workers one of the most generous health care plans in the country; its members pay only about 4 percent of their medical bills. (By comparison, workers across the country pay an average of 28 percent of their health care costs, according to the Henry J. Kaiser Family Foundation.)
I’m all for workers earning more, but it’s important to understand that, at least in the car industry, this is not a case of rapacious investors profiting at the expense of workers. Since its initial public offering in November 2010, G.M. stock has risen by only 13 percent, compared with 154 percent for the overall market.
We need to be realistic about these challenges. The United States government can support the auto industry with initiatives like the new trade deal with Mexico, which would require that 40 to 45 percent of the vehicle is made by workers earning at least $16 per hour. But Mr. Trump’s flowery rhetoric notwithstanding, we’ll be lucky just to keep the jobs we have now.