New autoworkers no longer tops in manufacturing pay

June 20, 2010 at 12:00a.m.

By DEE-ANN DURBIN

and TOM KRISHER

AP Auto Writers

DETROIT (AP)

Every day at a General Motors plant near Lansing, Mich., workers drive hundreds of Buick Enclaves — many with leather seats for seven and on-board video systems — off the assembly line.

Driving one home would be tough for the plant’s newest workers, whose annual pay is less than the $35,000 it costs to buy even the cheapest Enclave.

Newly hired members of the United Auto Workers at GM, Ford and Chrysler earn about $14 per hour, half what veterans make under their current contract.

It’s a far cry from the halcyon days when the union autoworker had one of the sweetest deals in American labor. And within the Enclave plant near Lansing, the disparity creates mixed emotions, including some resentment, among the 130 recent hires.

“It’s difficult to look across the line at someone getting paid more for doing the same job you’re doing,” said Steve Barnas, the plant’s union bargaining chairman.

Bobbi Marsh, 32, was hired at the GM plant in Lordstown, in Trumbull County, two years ago, making $14 per hour. With raises she now makes $16, but that’s still less than half the wage of her father, a machinist at the Lordstown plant.

Her father’s job helped pay for her college and family vacations. She is afraid she will not be able to provide the same for her 10-year-old son.

“I feel bad for my child because I want him to have the same opportunities I had when he was my age,” she said.

Marsh had several teaching jobs after she graduated college in 2000, but she was laid off each time because of enrollment declines or budget cuts.

She said the job at GM has changed her life with a good, consistent paycheck. Even at $16 an hour, her pay is more than double Ohio’s minimum wage.

For decades, the UAW tugged wages upward. In 1960, a UAW member made 16 percent more than the average American manufacturing worker. By 2006, the figure was 74 percent. Today, new hires in the UAW make about 20 percent less than the average.

In the old days, other industries adopted UAW benefits to compete for workers. Rival companies such as Toyota would match their pay. The Federal Reserve even kept a close tab on UAW contracts because they were such a strong predictor of U.S. wages.

That was before high gas prices, the recession and skyrocketing health-care costs brought the Detroit Three to their knees. Last year, as GM and Chrysler tumbled into bankruptcy, workers agreed to concessions, including the lower starting wage and suspension of cost-of-living raises that could amount to thousands of dollars over the life of a contract.

Demands for cuts are still coming. Workers at Nexteer Automotive, a steering plant in Saginaw, Mich., that GM is trying to sell, were asked to freeze wages for five years, lower the entry-level wage to $12 per hour and remove family members from new workers’ health-care plans. Workers voted down the concessions last week.

It wasn’t always this way.

When the UAW was setting the bar for U.S. manufacturing wages, some auto workers made more than $100,000 a year with overtime and enjoyed nearly free health care and generous pensions.

But the UAW and other unions have been forced to make concessions to blunt competition from places such as Mexico, where autoworkers earn just $4 an hour. Between 1960 and 1969, U.S. wages grew nearly 50 percent; in the 2000s, they rose just 29 percent, according to the Social Security Administration.

The UAW, which elected Bob King its new president last week at a convention in Detroit, still sets the tone. So everyone from nonunion auto-plant workers to unionized government workers could face similar pressure to lower their pay, says Sean McAlinden, a senior economist with the Center for Automotive Research in Ann Arbor, Mich.

“The UAW is showing the way,” McAlinden said. “What they’re basically telling the economy is the defined-pension benefit is dead. That retiree health from the company is dead. That high wages at the start of your career are gone.”

Benefits such as big one-time buyout payments or cost-of-living increases made nonunion Americans seethe as their own jobs and benefits were cut.