Home > Health care reaches tipping point
Un/Employment Trade unions Healthcare
Companies can no longer afford insurance; only government can
by Ron Gettelfinger
This Labor Day, you can find a solution to one of the most difficult problems facing American workers and employers by reading a single magazine article: "The Risk Pool," by Malcolm Gladwell, in the Aug. 28 issue of the New Yorker magazine.
Examining the roots of our health care and pension dilemma, Gladwell reports that when General Motors and the United Auto Workers were negotiating in 1950, corporate Chief Executive Charles Wilson favored a company-by-company approach to worker benefits. But Walter Reuther and the UAW wanted a universal system that would include all workers and all employers:
"The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible.
"(I)n most countries, the government, or large groups of companies, provides pensions and health insurance. The United States, by contrast, has over the past 50 years followed the lead of Charlie Wilson and made individual companies responsible for the care of their retirees. It is this fact, as much as any other, that explains the current crisis. In 1950, Charlie Wilson was wrong and Walter Reuther was right."
Starbucks sets example
The health care and pension problems Gladwell writes about in the auto and steel industries are present throughout our economy. Starbucks, for example, is a retail firm, operating in a competitive environment that is worlds away from manufacturing. But Starbucks now spends more money on health care than it does on coffee — not unlike GM, which has for some time paid more money for health care than it does for steel.
Starbucks, like GM before it, is finding out the hard way that America’s benefit crisis cannot be solved by any one company or any one industry. As Wilbur Ross, an investor in the steel and auto parts industries, explains to Gladwell:
"Every country against which we compete has universal health care. That means we probably face a 15 percent cost disadvantage versus foreigners for no other reason than historical accident. The randomness of our system is just not going to work."
Unfortunately, the reaction of many corporate executives and public officials is to make our current system more random, not less. Employers who seek to avoid the cost structures that have caused difficulty for major industrial firms have transferred responsibility for health care and retirement to individual employees, through 401(k) plans, health savings accounts and other mechanisms.
Don’t burden households
But if pension and health benefits can’t be adequately maintained by individual companies — whether they are young retail giants like Starbucks or venerable manufacturing firms like GM — then it makes no sense to transfer these obligations to individual households. We need to go in the opposite direction, like all of our industrial trading partners, and develop well-funded public programs which cover every man, woman and child in America.
If we don’t, a writer who is not yet born will be writing 50 years from now about millions and millions of workers who once labored for firms with no pension or medical plans and now cannot afford to take care of themselves properly in their retirement years.
"The Risk Pool" is important not because of what it says about the past, but because it sets the right framework for discussing America’s future. Malcolm Gladwell is author of the "The Tipping Point," a book that argues that small events can have a large effect on complex systems. This Labor Day, let’s hope that his recent New Yorker article becomes a tipping point in the national conversation we desperately need to have about health care and pensions.
Ron Gettelfinger is president of the United Auto Workers. Send letters to The Detroit News at Editorial Page, 615 W. Lafayette, Detroit, MI 48226 or (313) 222-6417 or letters@detnews.com.
Forum posts
9 December 2008, 14:50, by Mike Westfall
RON GETTELFINGER VERSUS WALTER REUTHER
By Mike Westfall
Past UAW President and founding father, Walter Reuther, was a strong principled labor leader of vision. Walter had a backbone and refused to become a corporate puppet. Walter knew that if you were to get respect that you had to demand it. The companies and nation thrived, the middle class expanded and the world respected autoworkers and copied the responsible contracts resulting from Walters’s tenure. Walter never apologized for his workers making a decent wage, never betrayed his retirees and always said that you could tell the quality of a union leadership by how they treated their defenseless retirees.
In the six short years since UAW President Ron Gettelfinger has taken office he has been apologizing for and sacrificing scapegoated autoworkers wages, pensions and benefits.The world now loathes UAW members and accept that if the their own UAW President believes their work life and standard of living is so exceptional, that their retirees health care is so unimportant and all the painfully hard won gains won over the life of the UAW are now gratuitous that it must be so.
Gettelfinger and his colleagues at Solidarity House will soon retiree on their separate, lucrative, secure and healthcare protected pensions. UAW workers and retirees however will never recover from the damage these people have done to them and their families. Gettelfinger should to be shamed and expelled from Detroit.
In the auto loan hearings the insulated, smiling, anti-union, photo opt. politicians and their biased and naive witnesses from academia land, none of whom has ever spent a minute slaving on an assembly line, falsely suggested that the fault of the auto industries’ woes were due primarily to union workers and retirees.
The politicians are wrong, the befuddled prejudiced witnesses are wrong and what they said is bogus. The indisputable facts are that 90% of the costs of building an automobile are “not” worker related. The particulars are that Gettelfinger’s unending concessions have not made and “will never make a difference” because workers and retirees were never the problem.
Auto executives have been able to snooker, backslap and dance Gettelfinger to the edge of the cliff and he pushed his trusting membership off that lethal overhang because he simply couldn’t stop saying yes to the companies when he should have been saying no.
Many of the politicians involved in the loan proceedings were campaigning for healthcare in the recent presidential election and were supported by a majority of autoworkers. Now these same hypocritical double-talking politicians are using their pulpits to ridicule America’s autoworkers and deceitfully crush the auto retirees by calling them unfortunate legacy costs as they push for the theft of their healthcare.
Instead of using the national spotlight to tell the world that retirees and workers have been a hard working and committed workforce who have given their labor, accumulated experience, knowledge, wisdom, and skills to advance these American based multi-national companies and build the American dream for our entire nation, Gettelfinger has remained painfully silent.
Gettelfinger’s weakness for concessions has forced autoworkers to suffer with condemnation, substandard unfair wage configurations and sliced protective work rules. These union officials have consciously refused to keep pension buying power of older retirees in line with inflation. Divorcing himself from his struggling retirees, Gettelfinger has reduced these retirees to collective beggars.
In the auto industry it is well known that the factories are unhealthy places to work. In many manufacturing plants the workers’ life expectancy is less then the normal life expectancy because of the exposure to strong carcinogens and multiple other workplace chemicals and hazards unique to the building of automobiles. Plants are known to have enormous long-term health problems including cancer that come from worker exposure over the decades of labor. These diseases many times don’t surface until workers retire. Past UAW leaders knew this and negotiated hard won retirements and health care benefits to protect retirees because of it. Corporations have always had pipe dreams of gullible union officials who would allow them to legally walk away from their full healthcare responsibilities. Never until Ron Gettelfinger would past UAW administrations ever consider it. It was unthinkable because Healthcare is a life and death benefit for retirees.
Gettelfinger never mentions the fact that retiree healthcare benefits was negotiated and paid for by retirees during their working years in lieu of wages.
Retirees own these benefits. That is why Gettelfinger and company has had to go to court to get at them. As the retirees paid for these benefits during their working years, their union officials refused to vest them and spent the retiree healthcare funds elsewhere.
Gettelfinger has betrayed the union retirement promise. He has not only refused to negotiate basic pension increases for older retirees to keep up with rising inflation, but also went to court to obtain the legal right to concession away the little income that they do get.
The elderly UAW retirees lacked the options for building their own pensions available to today’s workers. Their entire wherewithal is dependent on the fixed retirement promises made to them at the time of retirement. Simply put, elderly UAW retirees cannot afford to pay for healthcare. Stealing the health care of these already besieged elderly retirees, whose meager pensions have lagged far behind inflation and are much smaller than more recent retirees, would be to repay these needy retirees with a potential catastrophic health related death sentence.
It now is indisputable that Gettelfinger has been running the UAW as a company union and has used his power and influence against those he should be representing to race the clock back 70 years to evaporate all the gains. His tenure has been both a C.E.O.’s dream and a union members nightmare. He has volunteered and sacrificed member’s bedrock pensions, jobs, health care, benefits, wages, work rules, and worker solidarity. He has become a corporate cheerleader “expecting continual worker sacrifices” and become the representative and facilitator for job destroying corporate restructuring. Gettelfinger has agreed to ongoing local “ New Operating Agreements” that evaporate long-standing job protections and allowed the companies to decimate wages by replacing existing workers with new workers at half the wages.
The ironic thing about this is that none of it had to happen. It hasn’t helped and it won’t help. For shockingly cooperating in unreasonable ways with the corporate executives who have shamefully used him, for refusing to defend UAW members, for taking struggling UAW retirees to court in order to negotiate away their healthcare benefits, for ignoring the needs of workers and their families, for breaking sacred solidarity and shamefully redefining the term union, the wretched record of Gettelfinger and his colleagues, who have betrayed the very premise of what they were elected to do, will be recorded in labor history. That will be their dishonorable testament and legacy. The assault against working Americans by the very powers that should be protecting them is a betrayal and a cultural tragedy. History will hold them accountable.
Mike Westfall
westfallpapers@yahoo.com
Relative historical links…
UAW OFFICIALS BETRAY AUTO WORKERS [2007]...
http://unionreview.com/insights-analysis-uaw-betrays-autoworkers
VICTOR REUTHER SPEECH 50TH ANNIVERSARY OF THE UAW FLINT RALLY [1987]...
http://westfallmike.tripod.com/Page12.htm
MIKE WESTFALL SPEECH 50TH ANNIVERSARY OF THE UAW FLINT RALLY [1987]...
http://westfallmike.tripod.com/Page11.htm
HISTORIC UAW LEADER SPEAKS OUT FOR RETIREES AND WORKERS [2007]…
http://www.intellectualconservative.com/2007/08/11/interview-with-whitey-hale/
EASTERN ECONOMIC MANUFACTURING SPEECH [1985] …
http://westfallmike.tripod.com/Page14.htm
ROGER & ME –FLINT CONTROVERSY [1990]…
http://westfallmike.tripod.com/Page10.htm
ARCHIVES AND ADDITIONAL INFORMATION [1976-2008]…
http://www.umflint.edu/library/archives/westfall.htm
http://michaelwestfall.tripod.com/id50.html
http://westfallmike.tripod.com/