Now and then, a single statistical comparison tells an important story: In a year that the United Auto Workers was able to wangle a wage package worth between 6 percent and 7 percent a year from General Motors and Ford, the average wage increase over the life of the contract in other major settlements in the first half of this year was only 2.8 percent.
Not all of the auto package, to be sure, is in wages -- some is in bonuses or profit-sharing, which are not incorporated in the hourly wage base. Nonetheless, the 6-7 percent package represents the added hourly labor cost to the companies, at a time when auto employment costs were already 60 percent higher than the average for all U.S. manufacturing companies.
Something is wrong with this picture -- and there's no mystery about it: the automobile industry is able to pay higher-than-average increases because it has been insulated by "voluntary" quotas on Japanese cars since April 1981. And obviously, Detroit believes that it can twist enough arms in Washington to get the quotas extended past their expiration date in March 1985.
Last May, in an exclusive Washington Post interview, U.S. Trade Ambassador William Brock said without equivocation that the administration would not sit still for another renewal of auto quotas. White House officials, never quite denying what Brock said, tried to soften the waves he made by assuring the industry that a final decision hadn't been made.
But once the election is over, if Reagan is returned to office as the polls are predicting, there shouldn't be the need for further pussy-footing.
This protectionist device has saved relatively few auto jobs (at the extraordinary cost of $160,000 per job per year, according to analyst Robert W. Crandall of Brookings).
The higher price tags to consumers added up to more than $4 billion last year, fattening the profits not only of major Detroit producers -- who shelled out shamefully excessive bonuses to their top executives -- but of the biggest Japanese companies. (Toyota and Nissan now are the strongest advocates of continued quotas, which would keep smaller Japanese companies on a leash.)
All of these facts are well known to the Reagan administration, which succumbed to Detroit's pleas for quota restrictions on Japanese cars after the U.S. industry lost $4 billion in 1980. Originally set for a maximum of three years, the White House agreed to a fourth year (the current one) only to keep the issue out of the campaign.
The question now is whether the administration will have the guts to let the quotas expire next March, or whether it will be talked into yet another period of restraint by Ford, Chrysler and the UAW. (General Motors, anxious to bring in small cars produced by some of its Japanese partners, is not pushing for an extension.)
"It ought to be clear that quotas are not in the industry's long-run interest, and, at a minimum, if it's politically difficult to get rid of them, we should start phasing them out," Kenneth McLennan of the Committee for Economic Development said in an interview.
The CED economist suggests that the current 1.85 million ceiling on Japanese imports could be boosted by about 20 percent next year, and by another 20 percent the following year. Unless something like that is done, he predicts that the industry will achieve oligopoly power, with no further incentive to be competitive with the Japanese companies.
The quotas haven't -- as promised -- "bought time" to enable the industry and workers to adjust to Japanese competition. In fact, Crandall, who has made a detailed study of the auto industry and the effects of the quotas so far, points out that Detroit had already begun to make major adjustments to high-priced gasoline and the "real world" of international competition by 1981. "It is difficult to trace any differences in product offerings to the quotas," he says.
It is clear, on the other hand, that the main result of the quotas has been an artificial scarcity of Japanese cars that boosted prices. Japanese producers last year raised prices by about $1,000 a car. And while American car-makers are prone to say that higher American selling prices represent consumer choices for bigger cars and a more luxurious "mix," Crandall shows that after making all allowances, quotas allowed the real average price of American cars to go up about 5 percent, or $400 a year.
Crandall estimates that by last year, the American industry sold 400,000 more cars than it otherwise would have, because of the quota-scarcity of Japanese models. That "saved" 26,200 production jobs. Taking the average additional cost of $1,000 per Japanese car and $400 per American, the total consumer bill to protect those jobs was a socko $4.3 billion, or $160,000 per job. (This allows nothing for the constraint on consumers' free choice.)
The bottom line question is this: How long will American car-buyers be willing to pay such premiums to fatten corporate bonuses and auto union wages well over what they themselves earn, on the average? With the election campaign over, will politicians do what's right for the country?