DETROIT – So what will be the long-term effects of this year’s United Auto Workers’ strike? Will it have led to increased prosperity for those who have been losing ground for decades?
Will it have ripple effects that will cascade through other sectors of the economy? If so, are those likely to be good, as in better wages for other workers, or bad, as in causing a combination of inflationary pressures and driving more jobs abroad?
We may not know for some time, even after the strike is over. But I recently got some interesting perspectives on all this from an economist and a veteran labor leader who aren’t directly involved.
Charles Ballard, a recently retired longtime economics professor at Michigan State University, specialized in the Michigan economy throughout his career. Things are much more complicated, he noted, than in the days when the “big three” had a near-monopoly on domestic auto production, and any cost increase could be passed on to the American consumer. Now, their combined production is just over 40 percent of all the vehicles sold in the United States.
“I certainly hope the UAW gets something out of this, but I also worry about the long-term effects of the strike. When faced with demands from workers, or others, companies traditionally say they can’t afford to make changes. I’m very skeptical about that. However, the auto companies truly are in a difficult position as they try to move toward EVs (electric vehicles.)
Noting with alarm a recent Wall Street Journal story that said the strike was bound to strengthen Tesla, Ballard added “For me, anything that puts more money in the pockets of Elon Musk is likely to be bad for America.” On the other hand, however, he said that it was possible that a clear UAW victory “would spur workers in lower-paid sectors of the economy to push more aggressively for increases in wages and benefits. Up to a point, that could be a very good thing.”
But James P. Hoffa, a man who spent much of his life leading America’s biggest union, has a somewhat different perspective on the strike. Hoffa retired last year after 23 years leading the Teamsters Union, but still follows labor affairs very closely.
The Teamsters have never been closely aligned with the UAW, though the relationship under Hoffa became mostly cordial, and he is clearly on the side of their workers. “These days the public is with them, the public is rooting for the unions,” he told me.
“You might ask why? Why are we seeing so many strikes now? It’s because people feel they are falling behind, and they are right. They’ve had 7.9 percent inflation; their wages haven’t gone up that much. And they see the CEO of General Motors making $29 million, and executive pay skyrocketing, and they know that they aren’t keeping pace.”
Traditionally, when strikes have occurred, the UAW has selected one automaker, usually the strongest, and declared a nationwide strike against it. When it ended, the union pursued similar settlements with the other automakers, a practice known as “pattern bargaining.”
This year, however, new UAW leader Shawn Fain has mounted an unorthodox strategy of striking selected plants at multiple automakers, such as Jeep. Hoffa declined to comment on those tactics. “We don’t know yet if what he is doing will turn out to be correct. We will see.”
But the Teamsters leader does think that when General Motors agreed to include its battery plants under the national labor contract with the union that it was a signal victory for the UAW.
That’s because electric cars and hybrids, not gasoline-powered cars, are now becoming the norm.
“They need to keep their union strong and their membership up,” Hoffa said. “If these companies get a good wage increase but lose workers, they haven’t accomplished anything.”
He paused. “You know, we need a strong work force in places like Michigan and Ohio, and don’t need these companies shipping jobs to Mississippi,” and other states where traditional unions have spectacularly failed to be successful at organizing auto workers.
Whatever happens, however, there are two sobering realities. One is that the UAW, which had more than a million and a half members in 1979, has fewer than 400,000 today.
The other is stunningly shown on a chart Professor Ballard gave me indicating how much of Michigan’s Gross Domestic Product comes from motor vehicles and parts. In 1968, it was just over 25 percent. Today, they account for less than seven percent of the state’s GDP, and only a tiny slice of the national.
Back when the UAW staged massive, months-long strikes against the automakers in 1945-1946 and 1970, they were national front page news on an almost daily basis.
Today, they are largely, at best, a regional story in a nation where millions have been driving Toyotas and Hondas for years. The world Walter Reuther knew has become a very different place.
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(A version of this column appeared in the Toledo Blade)
