Evening star., 1955-05-29
The Issue

The Issue
The United Auto Workers have
been talking for years about what
UAW (and CIO) President Walter
P. Reuther originally called Guar
anteed Annual Wage. OF late. how
ever, the union has started to call
its proposal Guaranteed Employ
ment Program" This is entirely a
matter of semantics. In the public
mind-or in what union propagan-
dists regard as the public mind
GAW seems to accent Wage"
while GEP stresses Employment"
The union contends that nobody
wants to be paid for not working,
that everybody wants a steady job,
but that in the present scheme of
things in the auto industry. some
surety must be given the man who
makes auto building career.
The details of the unions pro-
posal are rather complex. They
will be described below. But first,
a number of questions arise:
Why does the union say a GAW
Tor GEP) is necessary?
1t would provide steady employ
mcnt in an industry that historically
works by fits and starts. A new
model comes out, and everyone tolls
feverishly to meet consumer de-
mand. Then the demand is met,
orders fall off. and the assembly line
slows down. Layoffs come An
other squirt in demand, another squirt
in activity in Detroit. Finally, at
the end of the year, new models are
scheduled, and the assembly lines
go down again while the companies
retool for next year.
This is not union propaganda; it
Is, rather, a simplified version of
the auto industry's history. Some
companies do better than others,
and have fewer and shorter layoffs
But all are subject to the same kind
of f1uctuation, to one degree or an
other.
What does the union want in the
way of a Guaranteed Employment
Plan?
1t wants, in effect, assurance that
a career worker in the auto indus
try will get steady income; what
with vacations and other benefits,
years pay for a years work. 1t
is the unions position that if such
a system were in effect, the indus
try would reschedule its work so
that guaranteed employment would
be a fact, not just a sugar-coated
synonym for unemployment insur-
ance.
What is the unions plan?
If a man with seniority rights
that is, virtually any man with more
than 90 days employment in a
company-is laid off, he would get
benefits equal to his take-home pay
for 40 hours. In the case of a man
with a wife and two children, this
would be about $72 week. Since,
in Michigan. a laid-off man can
draw unemployment compensation
equal to about half this amount.
the union wants the company which
laid off the man to pay the other
half.
How would it be financed?
The unions plan for accumulat-
ing reserve fund equal to one-fifth
of the payroll in the boom year 1853,
plus provision for payment of cIlr-
rent layoff benefits out of running
expenses.
To get the reserve fund built up.
the unions plan somewhat over
simplified) is that each company
would deposit each year an amount
equal to per cent of its 1858 pay
roll. This build-up would continue
for five years, or until 20 per cent
was accumulated. (About this al
tentative language, more later0
Meanwhile, If layoffs occurred,
they would be paid for out of Or
dinary revenues. In other words, if
a company laid off a man next
week. it would pay him his layoff
benefit and at the same time con-
Ninue to deposit per cent of the
base-period payroll in the reserve
fund.
However, the union offers this
safety valve: In no case would the
current and reserve fund payments
exceed per cent of current pay
rolls. Hence the a per cent for
five years, or 20 per cent" language
mentioned above. If layoffs oc-
Cured before the reserve fund was
built up. it might take longer than
five years to accumulate 20 per cent.
Industry Reaction
If the UAW plan is complicated,
industrys reaction is simple:
Industry is agin' it.
Though the industry opposes the
Reuther plan for guaranteed en-
ployment." this does not mean