aNewDomain — Automobiles and McDonalds. WalMart. Apple. American profit.
Autoworkers in the U.S. used to make good money. They could, by and large, afford the products they were making. The economic collapse of 2007-2008 allowed the big automakers to do some clearing of house when the middle class suddenly found the American Dream back into somnambulistic fantasy. Layoffs and contract renegotiations, factory closures, protests and sit-ins, and some union-hating followed.
One state lost a factory because it refused to unionize, fearing high wages and worker demands would result in unprofitable conditions. Now even the workers themselves are wary of unions, thinking asking for too much makes them uncompetitive.
Was it unions that destroyed the American auto industry?
Or might there be another narrative?
Did you ever stop to wonder what happens to unsold cars?
Through most of the 1990s and 2000s, the strategies of GM and Chevrolet and Toyota had more to do with market share than profit. Each was willing to lose a billion dollars a year so long as it was able to encroach on the others’ businesses. By the time of the crash, GM looked set to win that battle domestically, and Toyota internationally.
This strategy involved buying up successful competitors who were small enough to acquire (Saturn and Hummer both went by the wayside when their successful, smaller-manufactory business models were gobbled up by their new owners, who had them mass-producing the same old cars as the parent brands under their boutique labels. It also involved making a lot more cars than were needed.
Efficiency was the order of the day.
If you’re going to pay plant workers fifty grand a year, you want your money’s worth out of them. But extra production carries a lot more cost than labor saves when it isn’t feasible to sell all the product. Material costs mushroom; transportation, storage and disposal all cost money.
And keeping all the extra product a secret has got to be pricey – tens of thousands of unsold cars that would sink a brand if someone found out they existed.
Who wants to buy a Ford Malpractice when one knows the company is throwing them away as fast as they’re making the next model?
Anyway, that was all the 2000s. Psychopathic, Enron-style business practices probably sunk those companies rather than labor costs; just making what you could sell would save a great deal of money. Nothing like this would happen today, though, right? With the economy recovering, doesn’t it seem there would be fewer chances to lay off a bunch of people and force the rest to accept shittier and shittier conditions?
Well, let’s ask WalMart. There isn’t definitive proof they’re shutting the five stores noted in this article because their workers demanded a living wage. But I don’t like coincidences. Do you?
Moreover, The Wall Street Journal had this to say about McDonalds’ plan to start closing stores in the coming fiscal year:
So even one of the world’s most ubiquitous consumer brands cannot print money at its pleasure. This may be news to liberal pressure groups that have lately been demanding that government order the chain known for cheap food to somehow pay higher wages.” More here.
But these closures are (so far) more to do with public consciousness and psychopathy. Consciousness in that everyone knows fast food is one step up the food pyramid from poison … or maybe just half a step … We eat there because we’re poor or lazy or there just isn’t any other food in our neighborhood. And psychopathy in that the McDonalds model has been to expand every year into and beyond market saturation. They seem to just keep building stores until adding more stores doesn’t result in more profits. When they got near saturation, they invested heavily in Chipotle instead.
Only conservative opinion-mongers are really making the connection to the need for higher wages. McDonalds is slowly coming around to the idea, though, endorsing $10.10 as a sustainable minimum wage – about a third of the increase to $15 that seems to be the minimum to support a worker but a real start.
Wisconsin is great at blaming the workers. That state government got people to rabidly hate school teachers who are barely getting by because everyone else is doing worse.
And attacks on tenure are rampant, especially from people who don’t understand it or the need for it. But academic integrity absolutely benefits at the institution level from having a cadre of educators you can’t easily fire (or just not assign classes) if they disagree, speak out too loudly.
Just try to remember when we’re squabbling over who gets food stamps, or whether teachers deserve health care and whether an autoworker has the right to a labor union, we’re squabbling over 6 to 8 percent of the total economy.
You know who has the rest of the money? The money from stocks, bonds, corporate profits, CEO pay, lawsuits, hedge-funds, celebrity? Ninety-two percent of the cash going around in America?
For aNewDomain, I’m just a working stiff named Jason Dias.