GM Strike & Why You Need an Emergency Fund
Sep 24th, 2007 by Shaun Carter
This morning was welcomed by news that the UAW has called a nationwide strike of all General Motors plants amid an impasse over contract negotiations which seem to center job security for its members in the future. Now, when a strike is called, these workers cease getting paid their average $27/hour pay at the GM plants and will only receive small payments from the union when the strike reaches a certain length.
This means that these striking workers will have to tap their emergency funds to live off of while the strike is underway and they aren’t earning a paycheck. But wait! Many people don’t have emergency funds, including these highly paid striking workers. In a story put out by the AP there is an interview of a woman who is a seven year veteran of GM and is married to a 21 year veteran of the company and she says this about the strike:
“This is horrible, but we’re die-hard union, so we have to,” Ahrens said. “We got a mortgage, two car payments and tons of freaking bills.” The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.
Now I have to wonder why this couple who, if making the company average, is brining in about $110,000/year in gross income (that’s with no overtime) is worried about paying their bills. Experts suggest having six months of living expenses in a savings account or short term CD’s for use in an emergency such as losing your job, medical emergency, unexpected repairs and other unforeseen expenses. Yes, I practice what I preach as well, having over six months of living expenses in a high yielding emergency fund.
I’m saddened that so many people live paycheck to paycheck, even when earning $110,000/year, and they threaten themselves with financial ruin when a small unexpected financial event turns their life upside down. So, go look for ways to fund an emergency savings account today by bringing your lunch from home, driving less, not paying $4 for a latte every morning, eating at home more often, and any other way to squeeze an extra couple hundred dollars into your emergency fund each month. This way, next time you have a financial crisis you won’t have to stress about where to find the money to pay rent and feed your family.
Technorati Tags: gm, general motors, uaw, shaun carter, strike, emergency fund, savings, high yield
The Family and Medical Leave Act protects you, if it applies (check). You may have seen a sign for it hanging in your breakroom or a bathroom (your employer is required by law to display certain labor and wage signs in a conspicuous place).