Caterpillar: Can’t Pay Workers Even When Its Booming?

File this under ‘unwillingness to share productivity gains with workers’ (boldface mine):

When it comes to dealing with labor unions, Caterpillar has long taken a stance as tough as the bulldozers and backhoes that have burnished its global reputation. Be it two-tier wage scales or higher worker contributions for health insurance, the company has been a leader in devising new ways to cut labor costs, with other manufacturers often imitating its strategies.

Now, in what has become a test case in American labor relations, Caterpillar is trying to pioneer new territory, seeking steep concessions from its workers even when business is booming.

Despite earning a record $4.9 billion profit last year and projecting even better results for 2012, the company is insisting on a six-year wage freeze and a pension freeze for most of the 780 production workers at its factory here. Caterpillar says it needs to keep its labor costs down to ensure its future competitiveness.

Here’s the kicker:

Caterpillar has offered workers several modest, one-time payments, but is also demanding far higher health care contributions from its workers, up to $1,900 a year more, according to the union. The company had profit of $39,000 per employee last year.

Will the salaries and compensation of managers and corporate executives be frozen? What about shareholder dividends? It’s an emergency, right?

Didn’t think so. Seriously, as long as productivity gains are funneled to a wealthy few who then unproductively park that money in bank accounts, lowering its velocity, we will have much lower economic growth than we should.

This is yet another reason why we can’t have nice things.

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3 Responses to Caterpillar: Can’t Pay Workers Even When Its Booming?

  1. dave says:

    this is why we need a job guarentee, plus single payer

  2. Kaleberg says:

    This is part of the general acceptance of the failure of capitalism. Even its supporters tend to enumerate its failures:
    – capitalism can provide primary health care to most people, but not to everyone
    – capitalism cannot guarantee that everyone has a place to live indoors
    – a capitalist society just cannot produce enough food to feed everyone properly
    – capitalism cannot raise living standards
    – capitalist nations are just not rich enough to provide everyone as much education as they can handle
    The list goes on. This is what capitalism’s supporters say, not its opponents. Listen to any serious capitalist pundit, business leader or politician, and they sound like their forebears listing the failures of Soviet communism. Of course, that may because capitalism is in no better shape.

  3. Pingback: More on Caterpillar’s War on Workers | Mike the Mad Biologist

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