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In such parlance, the term "good" was actually a code word implying that the amount paid was more than what was justified for the position. Labor contracts across the automotive, steel, and rubber industries in the late 1980s called for annual factory wage and benefit packages that, adjusted for inflation, amounted to $75,000 in today's dollars. On the factory floor, that is what was meant by "good money."
When the first waves of downsizing came, they hit both white-collar and blue-collar workers. But employees weren't just booted out the door. They were coaxed to leave with liberal retirement incentives widely regarded as too good to refuse. So even when losing their jobs, employees departed with "good money."
What happened was that management in-place at the time was mortgaging the future of their companies by virtue of irresponsible promises being made to employees. And management never worried about setting aside enough money to cover these promises. As a result, the underfunded pension obligations of our major corporations are enormous, especially in the automotive and steel industries. Even the medical costs of retirees are major financial drains.
In some cases, the money paid to employees was so "good" that companies have gone bankrupt. In these cases, pension obligations are dumped on the federal Pension Benefit Guaranty Corp. But this agency generally can't pay the juicy pensions and benefits promised under labor contracts, so retired workers get a proverbial bucket of cold water in the face, financially speaking.
Frequently, newspapers run articles about the financial hardships these retirees are facing. And sometimes the articles mention the wages they received when they were working. In one such instance, an article describes financial problems being faced by a steelworker who retired three years ago and then lost his medical benefits when his former employer went bankrupt. He needed the medical coverage because he retired at age 55 and isn't covered by Medicare.
Several things about his story are noteworthy. The first is that he was able to retire at age 55. The second is that he was earning the equivalent of $67,000 per year in today's dollars when he retired.
Employment agencies frequently send me resumes with the salaries requested by engineers looking for jobs, and almost never are the salary figures as high as $67,000. I also scan the employment ads in the newspaper periodically just to see what engineers are being offered, and rarely do I see salaries quoted over $65,000. So even in contemporary times, financially troubled steel companies have been able to pay "good money" to the guys down at the mill. In fact, it is so "good" it often exceeds that earned by graduate engineers.
When the President was forced to rescind steel tariffs several months ago, domestic steel companies said they still needed the tariffs to establish a level playing field. But when you look at the wages paid in the steel industry, you see that "level" isn't the problem. The problem is the nosebleed altitude of the wage and benefit packages.
Financially pressed retirees, especially those who were in the steel industry, often say they are being treated shabbily in view of the fact they have given their lives to their employer. But when you look at the generous wages and benefits these workers received over a lifetime, you could ask: Exactly who gave whose life for whom? It looks as though the steel industry, having paid all that "good money," has given its life to its employees.
-- Ronald Khol, Editor
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