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    The economics behind the UAW from beginning to current

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    How important was the leadership of Walter Reuther? What did he do that increased the economy and what did he do that declined it?

    What are the economic implications of the UAW from its beginnings to now?

    What are suggestions on how to fix the decline?

    © BrainMass Inc. brainmass.com December 24, 2021, 10:42 pm ad1c9bdddf

    SOLUTION This solution is FREE courtesy of BrainMass!

    The UAW is a product of the Great Depression.
    It developed the 'sit down' strike - that is, it was tougher for scabs to move in.
    Reuther was a moderate socialist and supported the USSR in theory, not in practice.
    The concept of labor organization here was rational and based around real, achievable goals.
    Reuther's main tactic was to hit one of the main car manufacturers with a sit down strike - as that one company struggled, the other two would outsell it. It was a brilliant plan.

    Foreign competition in the auto market harmed the UAW.
    Needless to say, this was a part of and a result of globalization. The UAW has a long history of rejecting all global trade treaties unless they specifically increase labor welfare. Since few do, the UAW has developed a basically 'nationalist' approach to trade.

    With the destruction of Germany and Japan after WWII, it was easier to absorb costs. When these countries rebuilt, that became more difficult. The oil shocks of the late 1970s hurt GM as well.

    It appears that the late 1970s was the peak of the UAW. It was also the peak of American working wages. Globalization helped depress them from then on.

    Basic demands (these remained more or less the same throughout the UAWs history). These received their highest level of articulation under Reuther:

    overtime pay
    paid vacations
    union shop (that is, no non-union person could work)
    cost of living increases
    improved health care packages
    retirement pay
    paid personal holidays
    retraining in case of layoffs

    GM's response to all of this is that labor demands were hurting US cars against foreign ones.

    The union's response has always been that, if it was not for us, American workers (of any kind) would have no protection at all. It was the union forcing the hand of firms like GM that created things like paid holidays, basic rights and protections, and health care plans.

    People like Reuther also forced GM to not pass on increasing costs to the consumer. Money would have to be taken from the top of the corporation to pay for better conditions.

    In terms of the modern decline of unionization in general the one word is globalization. So long as American workers are forced to compete against foreign ones, there is little chance to halt the decline. Workers in China or Mexico work for far less than the typical UAW member in the US. Hence, forcing firms to pay for higher wages are out of the question. The company can simply move its plant abroad. That is one of the huge problems in all organized labor today.

    The basic concept is the "race to the bottom". Companies go where labor is cheapest. This means that countries have an interest in keeping wages low. That also means that domestic wages must remain as low as possible as well. Think of it this way, if you think that a plant can move to China, you are less likely to agitate for better health plans.

    It should also be noted that, starting in the late 1970s, the major auto manufacturers were hiring people on the basis of their opinions towards the union (from the UAW site).

    Here's a good resource:

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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