Gall about the jobs bank

December 4, 2008
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The jobs bank has come to symbolize whatever the general public thinks is wrong with the United Auto Workers and Detroit car companies.

For many years, the UAW contract has stipulated that laid-off workers be paid nearly their entire compensation. Now, because the jobs bank has become such a lightning rod, the UAW says it will suspend the benefit in the hope of persuading Congress to OK a bailout.

Toyota made news this year when it treated its workers much the same. It continued to pay laid-off assembly line workers even through production slowed and they werenâ??t needed. Yet, the decision wasnâ??t met with disdain.

Why are Americans repulsed about the UAW jobs bank but nod approvingly when Toyota keeps its workers on the payroll during slow stretches? Is the difference that Toyota workers keep training during their layoffs?
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  • My thought is that the idea of full-compensation is admirable until the time that the compensation is funded by taxpayers. I don't believe Toyota is seeking a multi-billion dollar check from the Feds. With the Big 3 seeking tons of money, why should they continue high-level spending? With Gov't funding, it seems to become a form of welfare. When they can afford to pay their own workers, they can continue the full-compensation.
  • Exactly.
  • ditto
  • I agree with the first commenter. In addition, I think a key difference is the free-choice factor. Toyota made that choice of its own free will. Whether or not it is a sound business decision only time will tell. If you believe demand will increase again in the short-run, it makes sense to keep trained labor available. If demand does not increase, Toyota will be penalized for maintaining an elevated cost structure. Washington is less likely to give Japanese firms handouts.

    The Big 3, while certainly not well-managed, implemented full-compensation because the Unions had much more negotiating leverage. A Job Bank program does not make sense if demand for a firm's product is declining and will stay down for the forseeable future. Generally, a firm that has to reduce its workforce is not doing well. The Union Job Bank plan takes a bad situation and makes it worse. The market told the Big 3 to change their operations and value proposition in order to be viable. The Job Bank makes that much harder to do by maintaining elevated costs. No one likes to see someone lose their job, but our system requires firms that do not provide what the public wants be allowed to fail. We benefit more as a society by focusing our resources and productive capacity on goods and services that best satisfy needs. The free market, while imperfect, is the best system to guide those choices. A Job Bank program runs counter to the tenets of the somewhat regulated free market economic system we employ. That bothers a lot of Americans.
  • What I always hated to hear, and it has been this way forever with them was that all these laid off workers wouldn't do anything other than sit around. Many, many you'd hear about spending all their time going hunting and fishing, like it was some big vacation fully paid which it was

    This has been going for a long time and everytime you'd hear about it, it just infuriated you, especially if you were the kind of person who'd always go to work and get things done.

    Yes, it does seems like a double standard, but the US unions have made a mockery of the system which galls most people
  • It's about time this travesty was brought to light. Every worker who took advantage of this situation should feel personally responsible for the downfall of the Big 3. You cannot have extra labor costs and be competitive. Even though this does equate to billions of dollars of savings in year 1, it is, as one person said in the news, the unions private jet. It just shows how irresponsible and unaware of long term ramifications the union was--and how much they really were not thinking of the members' long term well being or they would not have set up this economic impossibility or the political PR problem of having to explain to those of us who work for our money every day how it could in any way make sense to pay someone to stay home or go hunting.

    The unions have outlived their useful life. It's time they disappear, and our economy will be better off without them.

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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