NEW YORK (CNNMoney.com) -- There was a time, not very long ago, when getting a job on the production line at a big automaker meant an instant ticket to the American dream, even for someone with little formal education. Not anymore.
"The minute you signed the paper, you were instantly vaulted into the middle class," said Mike Smith, director of Wayne State University's Walter P. Reuther Library in Detroit, named for the founder of the United Auto Workers, the union that represents auto workers.
A shrinking paycheck. As the auto industry undergoes a sea change, the government has demanded that Chrysler and General Motors (GM, Fortune 500) bring their labor costs in line with foreign competitors operating non-union factories in the U.S.
Today, an entry-level auto-worker will be making $14 an hour, compared to the $28 "base rate" the job had earned before, according to a summary of Chrysler's contract agreement.
Worker's benefits have also taken a hit.
"Workers coming in will have good benefits and a good wages but not necessarily what they were 20 or 30 years ago," said Smith.
Anemic healthcare. New UAW employees will pay a much larger portion of their healthcare expenses and once they retire carmakers won't be paying for their healthcare, according to information from the Center for Automotive Research.
Fewer medical procedures and drugs will be covered and, under new agreements, Chrysler and GM employees won't have dental and vision care covered.
Eroding unemployment benefits. As GM and Chrysler restructure, the UAW has agreed to give up salary protections that had cushioned laid off autoworkers.
These protections had allowed factory workers to get their full pay, or close to it, even after they had been laid off. Workers could stay in the so-called "jobs bank," with pay, until they'd either returned to work or turned down job offers from the automaker.
Under new deals with GM and Chrysler, factory workers will receive much less money when they're laid off. Senior workers will only be protected for up to one year, according to a summary of recent UAW contract changes. |