Organized Labor is Ascendant — and Has New Targets
Author: Greg Valliere
November 1, 2023
TENTATIVE AGREEMENTS with Ford, General Motors and Stellantis call for 25% increases in pay by April 2028, raising top pay to about $42 an hour, according to the union. That starts with an 11% boost upon ratification, three annual raises of 3% each, and a final increase of 5%. The UAW said restoration of cost-of-living increases, which were suspended in 2009, could boost the total increases in the new contracts to more than 30%.
TRIUMPHANT UAW LEADER SHAWN FAIN, a new hero on the left, says “if we’re going to truly take on the billionaire class and rebuild the economy so that it starts to work for the benefit of the many and not the few, then it’s important that we not only strike, but that we strike together.” Sticky wage hikes will annoy the Federal Reserve for years to come.
SEVERAL ISSUES IN THE LIMELIGHT: Collective bargaining is focusing on some new issues — Opposition to AI, union participation in business decisions such as plant closings, the end of tiers in which new employees are paid far less than existing workers, and the restoration of Cost of Living Adjustments (COLAs).
THE UNION SAID Ford’s temporary workers will get pay raises totaling 150% over the life of the deal, and workers at certain facilities will also get outsized hikes. The deals include $5,000 ratification bonuses; temporary workers will also get ratification bonuses and profit-sharing starting next year, officials said.
THE UNION DIDN’T GET ALL OF ITS DEMANDS: Companies did not agree to bring back traditional defined-benefit pension plans or retiree health care for workers hired since 2007. But they agreed to increase 401(k) contributions to about 9.5%. The UAW asked for a shorter work week — 40 hours of pay for 32 hours of work — but it didn’t win that concession.
ASSUMING RATIFICATION, General Motors, Ford and Stellantis are facing sharply higher labor costs, estimated by some analysts at exceeding $1 billion per year, per company. The automakers will try to absorb those cost increases through expense reductions (including cutbacks for auto shows) and higher car prices.
AS FOR SHAWN FAIN, his next focus will be on unionizing more companies, from Toyota to all Starbucks stores, while seeking reforms and higher wages for unionized workers. A major new battle is underway among pharmacy workers, whose focus will be on working conditions, not necessarily wages.
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