For weeks the GM and Chrysler have been warning that unless their workers make major wage concessions the companies will be forced to file for bankruptcy, leading to further job losses. These demands have come despite the fact the automakers are under contract to honour existing agreements and that the auto workers union have already made many “painful” concessions while bondholders to whom billions of debt is owing have yet to make any concessions at all.
While one is legally and morally obligated to fulfill the terms of a contract, practically speaking it just may not be possible to do so. Included in the mitzvoth of the Torah is the prohibition of asking for payment of a debt knowing full well that the debtor is in no position to do so. Asking for payment in such a situation, besides being pointless, makes the debtor feel hurt and embarrassed. So sensitive is the Torah to such hurt feelings that the creditor may not even pass by or greet the debtor i.e. wishing the debtor a Shabbat Shalom – as such interaction is likely to cause discomfort.
Employers are in business to make money, money often made through the efforts of labor. Yet despite the benefit one receives through the efforts of one’s employees, providing employment, form the perspective of the employee is a form of charity. Our tradition teaches that it is in fact the highest form of charity one can do. By providing an opportunity for the recipient to earn his wages, the employer has not only provided ongoing support but also a sense of dignity for the employee.
There are, however, limits to charity – primarily that one is not obligated, or even allowed, to impoverish oneself so that others may benefit from one’s largesse. Jewish law thus allows layoffs, plant closures and the like when necessary – which for simplicity sake we will define as when an operation is not profitable and has no realistic chance of being so in the near future. When employees in an industry facing structural problems insist on their full wages and benefits they may be trading short term gain for long term pain (something unfortunately that is at the root of our current economic crisis). Whether one likes it or not employees and employers, especially during a recession, are essentially business partners. While they may have competing interests those interests will only be met if they collaborate together. Not surprisingly the unions did agree to further concessions.
Yet what if workers refuse demands to reduce wages? Such was the scenario regarding the (obscene) bonuses paid to workers at AIG insurance, some of whomthousands upon thousands of job losses. Yet unpalatable as it may be, it appears that those bonuses were
legal, the result of questionable negotiation techniques of the US government. Imposing taxes payable only by AIG managers’ would appear to be a discriminatory tax and thus not legally enforceable; doing so retroactively risks making government contracts meaningless. This despite the emotional and moral appeal of such legislation.
Unfortunately correct moral decisions are often just that – left to the moral conscience (or lack thereof) of the person but not legally enforceable. We can urge and hope these bonuses are returned but forcing them to be returned is a different matter. To do would require demonstrating that the bonus agreements were negotiated in bad faith, without full disclosure of all relevant data. Whether AIG negotiated in bad faith is something that can be debated. What can not be debated is that as long as we value the bottom line over all else we will continue to have moral crisis’s which will inevitably lead to economic pain.