Finally, after seven years of economic recovery from the last recession, a major union has won a contract that includes a real wage increase.
The 13,000 workers at Ford, Canada -- represented by the Canadian Auto Workers (CAW) -- have voted 94% to accept a new contract which calls for a wage hike of three per cent a year for three years, plus protection against inflation. The total raise will probably be 13.5%, bringing the wage of an average assembler from $24.03 per hour to $27.46 per hour.
The workers also won a $10 a day childcare subsidy, $800 per year tuition fee subsidy for dependents going to university or college, and 25 percent increase in retirement benefits. Now a worker with 30 years experience will be able to retire at age 60 and get $49,200 per year in pension benefits.
Ford's first contract offer, just days before the strike deadline, was so awful that CAW president Buzz Hargrove said a strike was almost inevitable.
Ford management quickly backtracked and agreed to major concessions because they knew that a strike by CAW would cripple their North American operations.
They cannot afford any downtime. There is tremendous pent-up demand for cars and trucks, and the Big Three auto makers are working flat out and raking in huge profits.
In the first six months of this year alone, the Big Three posted profits of $16.5 billion.
They can afford to give their workers a raise!
Look at the next company the CAW is targetting, Daimler-Chrysler. The minivans and maxivans that company produces here in Canada earns the corporation $1,450 profit per vehicle.
The CAW contract was patterned on the contract won with Chrysler by the United Auto Workers in the US. There, the union also won annual wage increases of 3 percent a year, plus inflation protection.
The economy has stepped back from the abyss that opened up during the stock market crash one year ago.
As the economy expands, profits and executive salaries have gone through the roof.
The average pay for Chief Executive Officers for companies listed in the Toronto Stock Exchange 300 soared last year to $972,000, up 17 percent from 1997.
They are raking it in, but workers wages have been stagnant. A recent study by two researchers at Ryerson University shows that:
The wage and benefit hike for workers at Ford was a long time in coming.
And now it is time for the rest of us to get our share.