Is it me or is there nary a word on bailing out workers from mainstream news and cable outlets and their talking heads? Chatter is all about whether the big three automakers – Chrysler, Ford and GM – and their valiant CEOs, who have selflessly abandoned their private jets for environmentally friendly cars, should be rescued with taxpayer dollars. And the sacrifices these men are willing to take to salvage the companies they and their fellow executives have run aground … a dollar a year compensation! What about stock options and compensation packages? What about all the money they “earned” while mismanaging their firms?
I am not keen on giving money to corporations and rewarding obscenely overpaid executives. After all, their downfall is part of the beauty of the free market and surely these men are uncompromising laissez faire capitalists. I am aware however that ordinary Americans will be negatively affected by the demise of the car manufacturers. They already are struggling under worsening economic times as are millions of other hardworking women and men.
As such I think that there should be more talk about bailing out workers. In particular, government policies should promote industries that provide alternative manufacturing jobs. President-elect Obama has talked about a “Clean Technologies Deployment Venture Capital Fund.” Such a fund would help finance companies involved in the alternative energy sector thereby creating several million jobs. This should not take long to jump start. There is a growing number of solar and wind power enterprises. There is also discussion about WPA-like infrastructure projects.
Concurrently, safety nets such as unemployment benefits, health coverage, child care, adult education and skills training should be expanded. I am not talking socialism. Rather I am arguing fairness. Safety nets in their present condition are too narrow and have too many holes through which people are falling. People who would like to earn their keep are unable to and their government would rather bail entities and executives who have enough to live on a hundred times over if they were to lose their jobs.
The main counter argument is that GM et. al. are too big to fail, that allowing them to decline will trigger a domino effect that would bring down many other manufacturing industries that make parts for autos, process the raw materials they need, and so on. First, these secondary industries also must either find new products to make or go the way of the car makers. Second, the way to greatly curtail the side effects and pain of the transition to new industries is to bail out the workers but not the plants.
Rescuing the workers should take the form of paying for their retraining, relocation, and extended unemployment benefits, and even assuming responsibilities for their health insurance and retirement funds, now paid for by the Big Three. The costs of bailing out the workers are much smaller than keeping them afloat by bailing out the plants. The reason is that in such “rescue” plans, part of the funds go to maintain and modify the obsolete assembly lines (and more generally the plants)—as well as to pay high salaries to executives and dividends to share holders.
So enough talk on bailing big industry and big men. Let’s talk about Joe the autoworker.
Image from Boycott Norwich Bulletin.