Bloomberg (the company not the Mayor) reports that under the new agreement between General Motors and the United Auto Workers, costs will be cut primarily through lower pay and benefits for newly hired workers. General Motors is going down the tubes because the union successfully demanded too much compensation for too little work — retirees vastly outnumber workers — while the "who you know not what you know" managers that followed those who built the company paid themselves royally while failing to innovate and running the company into the ground. So sacrifices had to be made. But they were not made equally. Like our elected officials and public employee unions, GM and the UAW decided to preserve existing perks and privileges for those who have them, while ensuring the next generation will be worse off even as they must do a better job.
As per Bloomberg http://www.bloomberg.com:80/apps/news?pid=20601087&sid=aUQ.gxdsuh8I&refer=home, "The UAW has always prided itself in being an egalitarian organization: `We all hang together, with equal treatment for everyone," but now "all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees." If those employees graduate to more skilled work, their pay will rise to match those who came before. But their benefits will not. "The company likes it because it cuts compensation costs and the union can swallow it because the people affected aren't going to vote because they don't exist yet," an expert told this source.
What the experts didn't say is that the proposed health care plan is potentially even worse for new hires than the pay plan. From now on, if the agreement is ratified, the UAW will provide health insurance rather than General Motors. General Motors will hand the union billions of dollars up front, not enough to pay for the rich health benefits existing workers get indefinately, but enough to do so for a long time.
In theory workers could get together and agree to a more basic level of cost-effective health care equally for everyone into the future, and make the up-front money — and the investment returns on it — last. But given what the generation now in charge has decided in virtually every sphere, I doubt that is what will happen.
Aside from the pregant, infants and unlucky, health care is something people needed mostly after age 50. (Thus far, for example, I've used virtually none, but I know that isn't likely to continue indefinately). The UAW could take the upfront money and not only provide the existing level of health benefits, but far richer benefits, for those with seniority and those retired, by gradully drawing down the health care fund, "liberating the equity" to spend more now the way people did with their inflated home values during the bubble.
And then when today's young workers reach age 50, the money would be gone or nearly so, and health benefits would be slashed or eliminated "due to circumstances beyond our control." The current generation gets everything, those that come after perhaps nothing. Just like our non-plan for Medicare and Social Security.
Let me mention once again that those who have rich health care benefits — and remember the U.S. blows more on health care than anyone else overall — are the primary obstacle to some kind of national system. Because equality would mean paying more or accepting less for themselves. Extrapolate curent trends to the far off future and we are heading for a system in which 10 percent of the population has health care professionals waiting on them hand and foot each and every day, including massage therapists, personal trainers, and nutritionists to prepare their meals, all with the government paying or subsidizing it, while 90 percent pay taxes and get nothing. (In the Republican version the rich are the 10 percent, in the Democratic version there is a more fair-minded division between the rich and those with connections).
We've had example after example of diminished pay and benefits, higher taxes and diminished services and benefits, for younger generations, in business and government, for 25 years. Can you think of a counter example — a policy that disadvantages those who were already "at or over 55" when President Bush said the words to benefit those now in their youth? I can't think of one — the conversion to cash value pensions, generally problematic due to age discrimination laws.
Watching the new PBS special on World War II, and seeing the spririt of sacrifice those generations had, I can't help but contrast it with the decisions that have been made in recent years. All I can do is try to arrange my private life to try to offset some of the damage.