I'm reading a book called "While America Aged" with a subtitle of "How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis." (long subtitle).
Ok, it's a little biased. But can you guess who is GM's #1 supplier? To which other company does GM pay the most? You might be thinking a steel (or aluminum) company. You might be thinking an auto parts company. Maybe the company that makes interior carpeting. Windshields and glass companies. If you guess any of those, you'd be wrong.
GM pays Blue Cross Blue Shield more than any of those companies. And they're competing with Toyota which doesn't have the same cost structure. There's more to it than that, I've got more reading to do. And after seven LONG chapters describing the problems in PAINFUL detail, there will be a conclusion, 20 pages titled "The Way Out."
But something struck me very strange today while reading, waiting on a plane to take off (1 hour on the runway is no fun). In New York City, sanitation workers went on strike because their pension plan wasn't as rich as police officers' plan. After all, the reasoned, they were uniformed employees too.
Now I believe everyone should earn a livable wage. And yes, sanitation workers are part of everyone. But if supply & demand applies to products, why can't it apply to workers too? How many people can be a police officer? It takes a good bit of training and some amount of education (at least high school, in some areas a college degree). How many people can be a sanitation worker? In a city near me, they let prisoners do it (which bothers me, but that's another issue). Training is minimal, education less. No degree required. Seems that the supply of sanitation workers should be high, and the price (wages, etc) should be low.
Now don't get me wrong, I don't aspire to be a sanitation worker. I've seen what they do and frankly, I don't want to do it. I'd rather pay someone else to do it instead. But if the sanitation worker's salary ever tops mine, I would seriously consider switching careers.
More from the book as I move along in it..