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The Big Three vs You and Me: UAW on Strike

By A.J. Firstman | Last updated on

The United Auto Workers (UAW) union – or International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (still "UAW" somehow) – staged walkouts and began to strike in mid-September 2023 after contract negotiations fell through with the "Big Three" unionized automakers in the United States: Ford Motor Company, General Motors, and Stellantis. It is the first time the UAW has gone on strike against all three automakers at once in the union's history, and so far there are no signs that either party will back down.

Record Profits, Frozen Wages

Relations between the UAW and the automakers began to break down even before the official contract negotiations started in mid-July. Part of the friction came in the form of new UAW president Shawn Fain, who was elected in part because he promised to make serious changes to the UAW's contracts with the automakers. Fain took office in March 2023 – and it seems like he wasted no time trying to put his promises into practice.

The UAW's opening demands were ambitious. Fain has argued for immediate wage increases of 20% for all UAW workers to be increased yearly until the cumulative raises reach 40% (now 36%) across the board. The union is also demanding a rollback of the concessions the UAW made to the automakers during the Great Recession of 2007-2008, which include the potential reinstatement of yearly cost of living raises, pensions, and other benefits.

If the UAW's requests seem unreasonable, consider this. In the period between 2013 – 2022, the combined profits of the Big Three automakers surged up 92%. CEO pay rose 40% in the same period. The companies also paid out nearly $66 billion in shareholder dividend payments and stock buybacks over the same stretch. It's important to take care of the shareholders, but that's $66 billion that was spent buying back their stocks to support the share prices instead of paying their workers, expanding and improving their benefits, or any number of things that could have benefited the people who made all that spending possible. Stock buybacks also are not investments in the company that directly contribute to more jobs, such as building a new factory.

And speaking of the people who actually make the products that the Big Three sell, want to know how much their pay increased?

After making significant concessions on their contracts which included giving up valuable benefits like pensions and cost-of-living increases, American auto workers have seen their hourly wages decrease by 19.3% since 2008.

Knowing that auto workers have seen a 19.3% pay cut over the last decade and a half at the same time that profits nearly doubled, CEOs got huge raises, and any spare cash was spent buying back stocks makes it that much harder to accuse the UAW of greed.

The UAW's actions come at a time when inflation has run rampant, housing costs have exploded, and wages for all but the most elite positions have been stagnating or even falling in real terms since the mid-1970s. Most American workers are lucky to have the same purchasing power they did before the COVID pandemic, let alone coming out ahead of the game.

Reality and Legality

The Big Three automakers haven't done anything illegal, of course. They've simply used their immense bargaining power to stifle any demands for increased pay, better benefits, and an end to the tiered employee system, as is their legal right. Moral arguments don't tend to make much of an impact in contract negotiations.

The UAW, on the other hand, is also exercising its legal rights to strike as established under the National Labor Relations Act of 1935. The union has every right to seek better working conditions by engaging in collective bargaining actions so long as those actions are peaceful and abide by the other laws of the land. The UAW's position is partly based on economics – pay, purchasing power, profits, benefits, etc. – but most of its negotiating power comes from their moral, arguably populist arguments. At the end of the day, they and the vast majority of Americans have seen their wages stagnate or fall in real terms while corporate profits, stock prices, and executive compensation levels have skyrocketed.

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