The strike is on! At the time of this writing, the UAW has begun worker strikes at all of the Big 3 American automakers. The cost will be prohibitive to the American economy. But now that it’s on, let’s take a closer look at what’s at stake, and whether or not this was a good idea.
Here are Five Fast Facts on the UAW strikes:
- ‼️ The Demands - The UAW is demanding 46% raises for workers, a 4-day work week, guarantees of workers getting paid even if their plants are closed (how is that even possible?!)...and more. Also, a gold-plated kitchen sink encrusted with diamonds.
- 📈 The Comparison - Doubling workers’ pay would have them earning about 50% more than most nurses and almost 60% more than most teachers. While that’s great for those workers, it will raise questions from many others, and they may not like the answers.
- 🏭 The History - This union model worked really well decades ago, when each person clocked in, made the same widgets all day, and clocked out. Now, it doesn’t. Today’s workers want to be valued for their unique contributions, they want flexibility, and they aren’t big fans of rigid seniority structures. And probably breaks for TikTok scrolling, too.
- 😱 The Setting - Michigan recently rolled back right to work policies (even though most Michiganders didn’t want it), allowing unions to flex. Despite this, the overall outlook for the Big 3 isn’t great. They’re making less than half of the cars they made 20 years ago, and foreign carmakers have more workers here than they do. And with unionized workers demanding more pay, it’s going to be nearly impossible to remain price competitive with those foreign competitors.
- 🤔 The Risks - There is a lot of risk here, and it’s hard to know what a “win” looks like. Sure, these strikes may end with huge raises and benefits for workers…but is it sustainable? Can the Big 3 survive if their labor costs double but the market isn’t willing to pay more for cars? What happens – even to union members – if the Big 3 collapse entirely because they are losing money hand over fist? There is danger to both sides, and if they fail to thread this needle there will be ripple effects across the economy.
🔥Bottom line: Though unions are feeling powerful and flexing their collective muscle right now, the dangers are real. The UAW is just coming off a corruption scandal, many people don’t like the fact that unions spend more of their dues on political causes than member benefits, and the Big 3 are already struggling. It would be unfortunate to win the battle only to lose the war. That would be bad for everyone’s Paychecks, and it could have some really bad ripple effects across the economy. And that will only accelerate the rumblings of backlash that are already brewing.
What do you think about the strikes?
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