Amy Traub

The Bankruptcy Double Standard

The Drum Major Institute has had a lot to say about the draconian new bankruptcy standards signed into law earlier this year. The law imposes onerous new requirements on families struggling to get back on their feet after personal catastrophes like a medical emergency or the loss of a job, yet it was signed amidst much moralistic posturing about personal responsibility and the social costs of walking away from one's obligations.

Now we read that while families who can't pay their medical bills are irresponsible, companies that want to use bankruptcy to get rid of obligations to employees are just conforming to "market realities."

This week, auto parts manufacturer Delphi Corp. is trying to use its bankruptcy to slash wages and benefits for its 33,650 hourly workers, even as it plans to grant tens of millions of dollars in stock options and bonuses to top management.

Since Congress seems to care more about protecting the credit card industry's bottom line than it does about working families, the Bankruptcy Abuse Prevention Act never applied to corporations. Instead, Delphi workers find they must rely on their own abuse prevention device: their unions.

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Posted at 6:49 AM, Nov 09, 2005 in Labor
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