How the mighty have fallen.

30 years ago, autoworkers were the highest paid folks among the rank-and file.  If we used constant dollars their income today would be $ 43 an hour.   Except their income is now only $ 32 an hour.  That is about 30% below their peak income of 2003.

There are manifold reasons for this drop in income.  We can start with the simple fact- technology is now the national profit center- not manufacturing. But, auto workers have seen their paychecks drop more than any other of the 166 industries tracked by the Bureau of Labor Statistics (BLS).

Couple that with the shift in jobs to the South (before this shift, 4 of 5 auto workers were based in the Midwest)- where union activity is frowned upon (and difficult to achieve) and the concessions the union made during the Great Recession (2008) so the auto manufacturers could survive.  (The problem is as the sector began to recover, the auto manufacturers didn’t properly reward the performance of their workers.)

This is the impetus behind the UAW (United Auto Worker) strike against the manufacturers.  They initially asked for a 40% rise (which would probably provide for the demise of the American automobile industry), but are still holding out for large increases.  And, they want the tiered pay structure eliminated, not to mention moving compensation from contingent compensation to straight hourly wages.  (Note that wages since 2019 have risen only 6%, while car prices have exploded by 30%.)

The union is also worried about the adoption of electric vehicles. They worry that the subsidies provided the purchases are not being associated with income the workers stand to make (or lose) as they’re adopted.  Not to mention that it takes way fewer workers to produce an EV than a conventional vehicle.

This is part of the calculus behind the strikes.  Right now, counting benefits and wages, the compensation for auto workers is about $ 64 an hour.  (Yes, benefits just about double the compensation rate.)  That is higher than what the foreign auto firms pay US workers (about $ 55 an hour) and significantly above what Tesla pays its workers (about $45 an hour).

Then, there’s the issue of union membership.  There are roughly 1/3 the number of UAW members that obtained some 30 years ago.  And, UAW has a wider aspect- that means united auto workers, united aviation workers, united agricultural workers,  in addition to a few more employee groupings.

For example, about ½ the current membership are part of academia- graduate students, clerks, adjunct professors, with about 130K paying members.  Not to mention the 40K workers who are BlueCross/Blue Shield employees.  That kind of shatters our impression of who the UAW represent.

But, it does keep the union in business.  Now, the UAW has to come through for the automobile workers.

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