The United Auto Workers (UAW) is a union that represents hundreds of thousands of workers in the automotive industry. On 14 September, UAW leadership called a strike when the deadline to make a deal with industry leadership passed. 13,000 auto workers have now walked out on the job from companies General Motors, Ford, and Stellantis. This strike has the potential to be one of the largest in automotive history, and affects plants in Michigan, Ohio, and Missouri. This is the first time that the UAW has gone on strike against all of these companies at once.
One of the demands of the UAW is an end to the wage tier system. The wage tier system at John Deere led 10,000 UAW workers to strike in October of 2021. Wage tier systems are arrangements that many large American corporations are hoping to impose on their workers. Two-tiered systems grandfather in current workers under a system of higher benefits and wages, and then give far lower wages for equivalent work and lower or no benefits to incoming employees.
Over time under these two-tiered systems, therefore, fewer and fewer people working for a company will get the better healthcare benefits and pay, and eventually there will be an entire population of laborers that cost the company much less. Such a system creates animosity between old and new employees, and can discourage new workers from joining unions, weakening the capacity of these organizations.
The UAW also has demanded a 40% increase in wages over the lifespan of the new contract that the union hopes to draw with management. The 40% figure comes from the fact that the salaries of American automotive CEOs has increased by 40% in the past few years. General Motors’ CEO made $29 million in 2022, which is 362 times the median salary of a worker at the company. Meanwhile, many auto workers have seen stagnant wages, which is why the UAW is also asking for cost-of-living adjustments to salaries to counter inflation.
In public statements related to the current strike, the UAW has proclaimed that auto workers in the US were never fully compensated for the sacrifices they made during the Great Recession. While workers agreed to wage and benefit cuts to save their industries, the bailout money largely benefited those at the top of the automotive companies. This strike is meant to deliver the compensation that auto workers have long deserved.
It is uncertain what the Biden administration will do in reaction to this strike. Towards the end of 2022, Biden blocked a railroad strike by signing a bill to make the strike illegal, which would seem at odds with his claim that he is the most pro-union president in history. Although Biden has made public comments in favor of the striking UAW workers, industry power generally prevails in deciding the actions of the US government. We have yet to see what demands the UAW will get from auto manufactures as a result of the strike.
