Sunday, December 28, 2008

Haircut, Haircut, Who's Getting A Haircut?

Megan McArdle compares auto workers with financial workers:
Financial executives have been fired in large numbers and taking pay cuts that reduced their income to a fraction of what was expected six months ago. Auto workers have not. Financial firms are in the process of laying off hundreds of thousands of their best paid workers (50,000 at Citibank alone); auto firms are not.

The shrinkage of the financial industry, and the vastly reduced pay prospects of its workers, seem entirely reasonable to me, though of course extremely sad for people who put themselves through expensive rounds of schooling in order to secure luxe jobs on Wall Street which have now disappeared leaving them broke and trying to sell the houses and cars they can no longer afford into a panicked local market. But I am fairly sure that the auto workers do not want the deal, as a class, that those rapacious financial executives have been given, which includes horrifying job insecurity, massive paycuts at the discretion of their managers, and for many or most of them, the knowledge that they will almost certainly never again earn a tenth of what they had set their lives up to expect.
(via Instapundit)

3 comments:

OBloodyHell said...

> the knowledge that they will almost certainly never again earn a tenth of what they had set their lives up to expect.

I don't see this, one way or the other. That system is going to recover, and it'll be making beaucoup bucks again within 10 years or so, barring major economic collapse due to misapplied government power.

Carl said...

Maybe. I know folks that left real estate after changes in the 1986 tax law ended certain loopholes. They never returned to real estate, and never again earned nearly that much.

bobn said...

Financial executives have been fired in large numbers and taking pay cuts that reduced their income to a fraction of what was expected six months ago. Auto workers have not.

Financial firm executives directly caused the crisis and profited from its runup - and their firms have received incomprehensible amounts of public money with no strings attached. Auto workers have not.

And autoworkers actually make real stuff that provides a value.