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My name is Peter Coy, and I’m a writer for the Opinion section of The New York Times. I have a newsletter about economics, business, and finance. Labor unions have been quiet for a long, long time. But very lately, there’s been an uptick in union activity. We’ve seen organizing efforts at Starbucks, Amazon. UPS drivers came close to striking this summer. And people are talking about it as being like the long, hot summer of labor going into the long, hot fall of labor. And the latest, of course, is that the United Auto Workers has gone on strike against the big three Detroit automakers.
Any time you have a labor dispute, it’s not just between the workers and the management. The public’s involved, too, because the public feels the impact of the strike. If the public feels it’s the union’s fault, then they can be mad at the union. If they feel it’s management’s fault, they’re going to be mad at the management. So both sides are very eager to change public perceptions to make sure that they get the public on their side. For example, Ford has an ad showing people in assembly plants building cars, and it makes a big point about how they employ more hourly autoworkers than anyone else in America.
It doesn’t say anything about the strike, of course, but they’re trying to convey the message that they are a reliable strong employer of union workers.
You get the right gravelly-voiced all-American narrator on an ad like that, and you show people assembling cars — it kind of hits a lot of people the right way. Now, whether it’ll work is a different question because they have a lot going against them. Gallup has a survey showing confidence in institutions. In general, people’s confidence in institutions has fallen, but it’s fallen a lot for big business and less so for organized labor.
The confidence that Americans have in big business at this point is abysmal. Even if they’re not unionized, they know what it’s like to struggle to make a living and to feel like the owners are getting rich, and they’re. They’re not even being able to make ends meet. So there is some natural inbred sympathy right now, which leans in the direction of the autoworkers over the automakers. And that is going to give a bigger opening for the autoworkers to get some of their demands met. Now, these demands are pretty strong.
Back at the start of August, Shawn Fain, the newly elected president of the United Auto Workers Union, did a Facebook Live session.
And he sat there in front of the cameras, wearing a black short sleeve shirt with the UAW logo and posters on easels behind him, fielding questions from the rank and file. And he said, we have audacious demands here.
Now, usually, that’s not the kind of thing you hear from a negotiator. They try to minimize. They try to say, no, this is not audacious at all. But I think that there’s a method to his madness. In 2007 to ‘09, we had a really big global financial crisis. And the autoworkers took it on the chin.
They had to give up a lot. They had to give up their cost of living adjustment, which they’d had for decades. That’s the one that gives them a raise every year based on inflation. They had to create a two-tiered wage system with a new lower entry point for pay. Had to give up some retiree health benefits and many, many other benefits that they had counted on. And they did it to sacrifice for the sake of keeping the companies alive.
What happened after that is that the companies recovered surprisingly well. Over the past 10 years, they earned $250 billion. They started paying big dividends, issuing stock buybacks, giving raises to executives. Meanwhile, the workers didn’t get any of that. Their pay has not kept up with inflation — far from it. The starting pay today is lower in inflation adjusted terms than in 2007.
When Shaw Fain, the president of the UAW, talks about making audacious demands, I think what he’s trying to do is he wants to tell the rank and file of the UAW, look, we’re not going to settle anymore. We’ve lost a lot. And it’s our turn to get some of it back. And if you call that audacious, then call it audacious.
So I think it’s a message that’s inspired a lot of United Auto Workers. And I think it might even inspire some members of the general public who maybe aren’t even in unions at all, but have the same feeling that they’ve been left behind, that all the wealth is going to the people who already have wealth, and there’s none left for ordinary Americans.
In any negotiation, not just this one, you have two parties that actually benefit from their relationship. The issue is how to split up the benefits that they jointly create. And it’s hard to know how that should happen. Clearly, the company shouldn’t get 100 percent of the value that they jointly create, but neither do you want to give 100 percent of the benefits to the employees.
So what’s going to be the outcome here? What we’re seeing now is that workers’ position is a little stronger than it’s been in the past. The unemployment rate remains fairly low. Public attitude has shifted sort of in the direction of organized labor more than in the past. And the inventory to sales ratio is low. There are not a lot of cars available for sale.
So the autoworkers have a stronger hand than in the past. If they win big here, in the same way that the UPS deal, which was favorable to workers, has inspired the autoworkers, the same will be true. If the autoworkers earn a good deal, that’ll inspire yet more workers to say, they got some of that. We want what they got.
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