The Progressive Populist Today Blog: Editorial: Labor Shows Its Grit

Sunday, October 1, 2023

Editorial: Labor Shows Its Grit

American workers are mounting an overdue effort to assert their place in the economy, and their actions are beginning to show results.

Reformers at the helm at Teamsters and United Auto Workers have become more aggressive in defending workers’ rights and reclaiming wages and benefits they conceded to help their employers survive.

Teamsters led by Sean O’Brien, president since 2022, threatened to strike in August over UPS’ refusal to install air conditioners in delivery vans, as well as wages and benefits equity. UPS averted the strike by agreeing to boost wages at least $7.50 an hour over five years, ending the forced six-day workweek for drivers and eliminating the lower-paid “second tier” of drivers.

The new contract, which covers 340,000 UPS employees, reverses Teamster concessions in the 2018 contract and brings the starting rate for new hires to $21 right away, and $23 by the end of the contract. And all new trucks will have AC; with hottest areas getting priority for these new trucks. Existing trucks will be retrofitted with fans, heat shields and induction vents.

Then, after years of autoworkers falling behind in pay and benefits while corporate profits have soared and executive compensation has surged, General Motors, Ford and Stellantis (the successor to Chrysler) rebuffed the union’s demands, which started with a 36% raise in wages, nearly 13,000 United Auto Workers went on strike at three plants in Ohio, Michigan and Missouri Sept. 15.

Among demands of UAW for 146,000 Big Three employees:

• Scrap the two-tiered wage structure and restore pensions and health benefits for all workers. Under the current system, workers who joined the company in 2007 or earlier earn an average of roughly $33 an hour. But those hired after 2007 are classified as lower tier and earn far less — about $17 an hour.

• Increase wages by a level comparable to the 40% Big Three CEOs have seen over the past four years.

• Restore defined-benefit pensions for all workers and medical benefits for all workers and retirees. Workers hired after 2007 don’t currently get pensions and their health benefits are less generous.

• More paid time off to be with families, with four-day workweeks.

The union also is asking for the right to strike over plant closings. “The Big Three have closed 65 plants over the last 20 years,” the UAW’s website states. “That’s devastated our hometowns. We must have the right to defend our communities.”

UAW on Sept. 22 expanded the strikes to 38 GM and Stellantis parts distribution facilities, which put another 5,000 workers onto the picket lines. “We will shut down parts distribution until those two companies come to their senses and come to the table with a serious offer,” new UAW President Shawn Fain said.

Ford was spared additional walkouts, because there was “real progress” with the company at the bargaining table, Fain said. He cited positive developments in the company’s proposals to end wage tiers, convert temp workers to full-time employees after 90 days on the job, and restore cost-of-living adjustments that were suspended more than a decade ago amid the auto industry crisis.

“Ford is showing they’re serious about reaching a deal,” said Fain. “At GM and Stellantis, it’s a different story.”

This is the first time the UAW has struck all three of the major carmakers at the same time, but the UAW is utilizing a “stand-up strike” strategy, calling members to walk off the job at selected plants rather than all at once. The union says the tactic should maximize its leverage in contract talks and keep the companies off balance as negotiations go on.

Auto workers in 2008 and 2009 agreed to concessions to let General Motors, Ford and what was then Chrysler cut costs to help the car companies survive in the wake of the Great Recession. The UAW sacrificed job security and reduced the companies’ contributions to cover health care for retirees and their families to help the companies obtain loans from the federal government to keep them in business.

In 2008, the average UAW member cost GM about $74 an hour in a combination of wages, health care and pensions. Toyota, by comparison, spent about $45 an hour for employees in the US.

Union workers agreed to a wage freeze, entry of lower-wage “tiered” workers, and other concessions affecting retiree pensions and health care benefits. GM and Chrysler (now Stellantis) went through bankruptcy and government-supported restructuring. In 2009, they suspended cost of living adjustments and haven’t had one since.

Fortunes at the Big Three have come roaring back since then, but there’s little consideration for the workers who helped the corporations survive. The car companies’ profits skyrocketed 92% from 2013 to 2022, totaling $250 billion, the Economic Policy Institute noted. Another $32 billion in profits are expected in 2023. The companies paid out nearly $66 billion in shareholder dividend payments and stock buybacks. But while average consumer prices have increased nearly 40%, autoworker wages have not come close to keeping up.

Over the past four years, the CEOs of General Motors, Ford, and Stellantis have seen their total pay jump by 40% while the wages of the companies’ ordinary employees have risen by just 6%. EPI observed that autoworker wages across the US, union and non-union, have fallen by 19.3% since 2008, after adjusting for inflation. Including the broader motor vehicle parts industries—where outsourcing strategies have long compressed industry wage structures and thus didn’t have as far to fall—average earnings fell 10% in real terms.

Last year, the CEOs of the Big Three automakers received staggering pay packages. Ford’s Jim Farley took home around $21 million, Stellantis’ Carlos Tavares pocketed nearly $25 million, and General Motors’ Mary Barra—the highest-paid of the group—brought in roughly $29 million. That has fueled workers’ ongoing push for better wages and benefits.

The Big Three firms will benefit from taxpayer-funded incentives under President Biden’s Inflation Reduction Act that offers tax credits for American-manfufactured electric vehicles. Republicans are criticizing the EV transition, but if the Big Three fail to move on EVs, it just presents an opportunity for foreign manufacturers and result in the loss of good union jobs in the US.

If you are interested in supporting strikers, Keith Brower Brown suggested at LaborNotes.org, show up at the picket line to show support. President Joe Biden was scheduled to visit a Detroit-area picket line Sept. 26 (as we went to press).

If you’re far from a picket line, Brown notes that public spaces in front of offices of profiteers, such as BlackRock, Capital Group and Vanguard, who are among top shareholders of the Big Three, are fair game for UAW supporters to spread the word that “auto workers deserve more, and big investors have taken what they never toiled to earn.”

Auto workers deserve better pay, which will trickle down in their communities a lot more than the millions paid to corporate executives, and their success will encourage others. — JMC