Why are Detroit’s labor costs so much higher? The UAW. Members get generous retirement and health care benefits. They can collect pensions in their 50s. And retirees get full health coverage until they become eligible for Medicare. Even then, they enjoy additional coverage in addition to the government program. Sounds great -- if it’s affordable.
What does the average Medicare recipient pay out of pocket annually? $4,200. But for UAW retirees, it’s only $285.
The UAW made some large concessions, but for new hires only. There were a few changes for existing UAW members, but nothing major -- changing overtime calculations, for example, and a bit less vacation pay. And their benefit funds were treated better than other creditors were, even though bankruptcy law calls for creditors to be treated equally.
“We should have asked the UAW to do a bit more,” President Obama’s “car czar” has admitted. “We did not ask any UAW member to take a cut in [his] pay.”
So, fellow taxpayers, the burden falls to us. We’re making it possible for two companies that refused to declare bankruptcy and restructure, as Ford did, to pay their union workers the same high rate that helped get them into trouble in the first place.
Remember that the next time you hear how the “auto bailout” saved jobs. In reality, it saved the UAW from its own folly -- and stuck us with the bill.