Engines are revving for the United Auto Workers union as they line up to strike against the Big Three automakers.
The UAW’s current contract with the Big Three – Ford, General Motors, and Stellantis – expires tomorrow, September 14, at 11:59PM ET. If the parties can’t reach an agreement on a new contract before then – and it’s looking very unlikely that they will – the 150,000 members of the UAW will carry out targeted strikes at a number of Big Three plants in what will be the nation’s largest strike by active employees in 25 years. The economic fallout from the Big Three refusing to meet the UAW’s demands will be massive; according to one estimate, a 10-day strike could cost the US economy as a whole more than $5 billion.
Automakers are quick to blame the strike on workers’ unrealistic demands, but UAW workers are only calling for reasonable changes to their five-year contract like moderately better pay, benefits, and working conditions. Over the last two months, UAW has pushed for a cumulative 40% pay increase over the life of their new contract. (Hourly wages at the Big Three currently range from $18 to $32 an hour. According to the UAW, if starting wages had kept pace with inflation since 2007, they would be $10 higher.) This might sound high, but when you consider that, between 2013 and 2022, CEOs at the Big Three witnessed a 40% pay jump and the companies themselves saw a 92% boost in profits to $250 billion – $66 billion of which they spent on shareholder dividends and stock buybacks – it sounds eminently reasonable. Shawn Fain, President of the UAW, put it simply: “Record profits mean record contracts.”
The UAW’s other demands include, among other things: indexing wages to inflation, eliminating workers’ pay tiers, boosting pension payments, securing more paid time off, allowing the right to strike over plant closures, and establishing a new “working family protection program” which would require automakers that close factories to continue paying workers doing community work.
At every turn, it’s been the automakers, not workers, who have fueled the impasse between the two sides. The workers want to work, so much so that the UAW even softened their demands to a mid-30% raise over the weekend. Although it’s a drop, it’s still ambitious and reflective of workers’ belief that they deserve a rightful share of the profits they helped to generate for their employers.
But why have auto workers fallen so far behind, and why must they resort to striking to recover so much ground? They’ve certainly been let down by the Big Three companies over the years, but they’ve also been equally shafted by lawmakers in free trade deals as well.
With the adoption of trade agreements like NAFTA (now USMCA) in the post-Cold War era, international trade became an even more important part of the US economy. According to the World Bank, trade rose from 19% of the US economy in 1989 to 31% in 2011. Over those decades, both Republicans and Democrats in Congress and the White House have touted the value of free trade, championing the benefits that each nation’s “comparative advantage” offers in producing products at the lowest possible cost.
It’s true, Americans as consumers did benefit from these deals, enjoying improved access to lower-priced goods from trading partners around the world. But Americans as workers largely lost out from them through job losses and wage stagnation. Between 2000 and 2017, the US lost a total of 5.5 million manufacturing jobs, with imports from China alone accounting for half of those losses. And for every five displaced manufacturing workers that were rehired in 2016, two experienced a reduction in wages in their new role.
Workers in the auto industry were particularly hard hit from trade deals. Between 1994 (the year that NAFTA took effect) and 2013, the industry lost 350,000 jobs, or a third of its workforce. This economic devastation is a large reason why voters in Michigan, the de facto home of the auto industry in America, came out for Trump in the 2016 election, as he railed against NAFTA on the campaign trail.
Thankfully, President Biden has begun to chart a new course in trade, with a renewed focus on Americans as workers and not just consumers. (What good is cheaper products if Americans don’t have jobs to pay for them in the first place?) With investments in domestic semiconductor manufacturing, clean energy, and public infrastructure, the Biden Administration has overseen a self-proclaimed “manufacturing boom.” The Administration is also working to discourage offshoring of jobs and is pursuing softer trade agreements with allies in Latin America and the Indo-Pacific region. This approach is in stark contrast to the trade war that former President Trump is already threatening to wage should he be re-elected for a second term in 2024. But trade policy, although incredibly impactful, is too slow to make an immediate impact for workers, particularly auto workers, who have spent decades falling further and further behind. Those changes are going to have to happen through labor negotiations – and, yes, strikes if necessary.
On the UAW strike, Biden told reporters on Labor Day that he remained optimistic that a strike wouldn’t happen. Although he has no legal authority to intervene, now that an auto strike is imminent, it’s vital that he throws his full and public support behind the UAW workers. He’s done good work with trade so far, but if he really wants to prove himself as our country’s most “pro-union” president, he must act swiftly.
UAW workers have received the short end of the stick for too long. They’re demanding a better deal, and everyone – particularly our President – needs to make it clear to the ultra-profitable Big Three automakers that their workers deserve it.
