The Positive Ripple Effects of the UAW

Musing About The Positive Ripple Effects of The UAW

2023 was a banner year for organized labor in the United States. According to the EPI (Economic Policy Institute), major strike activity increased by an astounding 280%.  The Washington Post reported that it was a 20-year high. Reuters stated that it’d been 23 years since strike activity was seen like this. Moreover, other companies and, indeed, industries, saw successful organizing campaigns: From the airline industry to healthcare, and from UPS to the writers in Hollywood.

Of particular interest – and the focus of this article – is what the UAW has been doing. After their historic negotiations with Ford, GM, and Stellantis, the UAW announced they were pledging 40 million dollars to organize; to challenge big business and big government interests and represent non-union autoworkers in the south.

First up on the list was the Volkswagen plant in Chattanooga, Tennessee.

After almost three quarters – or 73% – voted to be represented by the UAW, they had their first victory. Volkswagen has accepted the worker’s vote, and negotiations will follow.

However, this is just the beginning. Mercedes, located in Alabama, is up next. What’s more, the UAW has just settled negotiations with Daimler Truck in North Carolina, and Reuters reports this will likely boost things when the vote happens.

Workers at Mercedes will vote between May 13 and May 17 to have the UAW represent them or not.

Even more interesting is the response of every single automaker in response to what the UAW is doing.

Take A Look At The Money

In preparation for this Musing (and podcast episode, soon to be released), I took a deep dive into the data. Allow me to show you the respective companies, net profit, and their promise to increase wages AFTER the UAW got substantial wage increases for their members working for the Big Three.

The chart I made below illustrates the data:

Barrons reported that Volvo’s net profit for 2023 was 4.51 Billion – which is non-union in South Carolina, and has also said it’d raise wages by 11%. This was AFTER the UAW negotiations, too.

By way of contrast, Ford’s net profit for 2023 was 4.3 Billion, GM’s was 10 Billion, and Stellantis had a net profit of 20 Billion.

Now, we would be wise to ask why each of these automakers is raising employee wages. You could say it’s because of the significant amount of profits they’ve made – but you’d be wrong. Their profits were relatively comparable and not massively different for the most part (to previous years, that is). The difference, as this article states, is that the UAW has demonstrated it is able to effectively bargain for its members. As it turns out, it’s difficult to maintain the narrative that unions are bad in the face of 2023. Indeed, non-union workers have always benefited from their unionized counterparts.

Toyota, Honda, and Hyundai committed to raising wages LESS THAN TWO WEEKS after the UAW announced their deal!

Is the timing coincidental? I think not.

Elected Officials Care For Their Economic Model – NOT Workers

Disingenuous words like “stand with” – especially when the workers vote to be represented for their fair share

Not surprisingly, prominent U.S. political figures – notably in the South – have denounced workers voting to be represented.

For example, in response to the successful organizing campaign (an impressive 73% voted yes), the AP reported that “Tennessee Republican Gov. Bill Lee said Monday that he thinks workers at a Volkswagen plant in Chattanooga made a mistake by voting to unionize under the United Auto Workers in a landslide election.”

What’s more, even before the organizing vote, six governors of southern states – Alabama, Georgia, Mississippi, South Carolina, Tennessee, and Texas – made a joint statement condemning the UAW in general, saying,

“We the governors of Alabama, Georgia, Mississippi, South Carolina, Tennessee and Texas are highly concerned about the unionization campaign driven by misinformation and scare tactics that the UAW has brought into our states. As governors, we have a responsibility to our constituents to speak up when we see special interests looking to come into our state and threaten our jobs and the values we live by.”

In an opinion piece in The Tennessean, co-authors William J Barber II and Jonathan Wison-Hartsville, responded, writing,

“Calling the union a “special interest,” the governors claimed that unions threaten not only good jobs, but also the “values we live by.” As preachers from the South, we are tired of politicians trying to co-opt faith with talk about “values” when they do not have the facts to back up their claims.

The truth is that workers are building power in the South and politicians who’ve made immoral partnerships with corporate interests are feeling the heat. It’s past time for all God’s people to stand up for living wages and union rights.”

Additionally, they mention that,

“These governors who say they are committed to keeping “good paying jobs” refuse to acknowledge that more than 40% of the workforce in their states earn less than $15 an hour. These governors and their legislatures have actually taken action to override wage increases passed by municipal governments, even as the gap between the rich and poor in these states has continued to widen” – Emphasis mine.

Building on the above, those six states ALL are in the highest for poverty – #21 Georgia with 12.7% of the population in poverty, #17 Texas with 14%, #12 Tennessee with 13.3%, #11 South Carolina with 14%, #6 Alabama with 16.2%, and #1 Mississippi leading the nation with a whopping 19.1% living in poverty.

Back in 2017, Newsweek reported that Alabama had the worst poverty in the developed world, according to a United Nations official.

And yet their respective governors oppose their workers – and citizens – organizing to better themselves.

Stephen Silvia, an American University professor, told the Washington Post:

“’It [the governor’s collective statement] implies that the governors fear that the UAW will prevail in the upcoming union recognition election and that UAW success could upend their economic models built on relatively low pay and minimal worker voice.'”

What’s more, it helps to illustrate just how little many American elected officials care about those they are supposed to represent. When your elected officials demonstrate from corporate deals that you do rank less than corporations, where can ordinary workers turn?

Organized labor has long stood in the gap – and is making significant strides to fill the void left by elected officials who SHOULD be advocating for their citizens, but are not.

Like Andy Beshear, governor of Kentucky. As a matter of comparison before moving on, The Washington Post reported that “Kentucky Gov. Andy Beshear, whose state faces a UAW organizing effort at a Toyota factory in Georgetown, said on social media last week that unions have raised workers’ standard of living and that he was ‘proud to stand shoulder-to-shoulder’ with the UAW.”

Japanese Government Prioritizes Their Own Citizens

Even more remarkable is the way the Japanese value their citizens. Attempting to balance the socio-economic scales, Kyodo News reported,

“Prime Minister Fumio Kishida’s government has repeatedly asked business leaders to increase wages at a pace that exceeds inflation. Rising prices for everyday goods due to higher raw material costs and the weak yen have weighed on households.”

And the results?

“Toyota, seen as a trendsetter at the annual “shunto” wage negotiations, said it had fully met the request of its labor union, which had demanded its largest pay hike since 1999.”

“Nissan agreed to increase monthly wages by 18,000 yen on average, the biggest rise for the company since 2005, when its current wage system was introduced.”

“Honda Motor Co. is offering its largest monthly pay raise since 1989.”

The article also said that

“With the momentum for wage increases growing, the focus is now on whether the positive effect will trickle down to small and medium-sized firms, which employ about 70 percent of the country’s laborers.

In recent years, the Japanese government has intensified its efforts to shield smaller firms from the pressure exerted by larger companies to unreasonably lower prices, enabling these firms to earn enough to raise wages.

Japan’s antitrust watchdog earlier this month warned Nissan about illegally reducing payments to 36 subcontractors. Nissan President Makoto Uchida apologized on Wednesday for the scandal and said the company will “respond sincerely” to suppliers intending to pass increased costs on to the automaker” – Emphasis mine.

Imagine that – a government that is actually concerned with the well-being of its citizenry and not corporations. American elected officials could learn a thing or two from their Japanese counterparts.

American Compass Highlights The Problem

Nothing to see here – move along…

Most Americans have probably never heard of American Compass; I was one of them a few years ago. While researching for a capstone project, I came across them and their take on the current American labor movement. They state that,

“American conservatives rightly place economic freedom and limited government among our dearest values. The defense of markets, though, has at times made us overly solicitous of businesses. As we advocate for owners and managers in their pursuit of profit, and celebrate the enormous benefits their efforts can generate for us all, we must accord the same respect to the concerns of workers and ensure that they too have a seat at the table. In a well-functioning and competitive market, participants meet as equals able to advance their interests through mutually beneficial relationships…Strong worker representation can make America stronger. Unfortunately, our nation’s Great Depression–era labor laws no longer provide an effective framework, many unions have become unresponsive to workers’ needs and some outright corrupt, and membership has fallen to just 6 percent of the private-sector workforce. Rather than cheer the demise of a once-valuable institution, conservatives should seek reform and reinvigoration of the laws that govern organizing and collective bargaining for three reasons…” – Emphasis mine.

The rest of the brief details various ways workers do, in fact, have seats at the table – discussing ideas from Europe and Canada, they rightly access the troubling imbalance that is in America today. You can read the rest of the brief, here.

What is of particular interest – especially to me, is who signed off on that brief: former Alabama state senator and Attorney General Jeff Sessions and current Florida senator Marco Rubio. Both are well-known in the republican party as conservatives.

It seems like he (Jeff Sessions) has a different take than the current Alabama governor, doesn’t he?

The Rise of Populism

What are we to say? What are we left to conclude? Where does the worker turn when their elected officials serve corporate interests instead of their constituents? What can they do – especially when the entire economy feels rigged, oppressive, and created to exploit them and their labor?  What happens when you have “representatives” in government that do not represent you? What recourse do they have?

The advent of social media and increased use of technology alone wasn’t enough to ring the bell and sound the alarm on the abuses of the current system. Coupled with the pandemic and the resulting massive transfer of wealth, though, seems to have done the trick.

It’s significantly more difficult for gatekeepers to hold back information, hide their disdain for organized labor, workers rights, or even their own constituents. Increasingly, it is becoming more common for people to call out elected officials, too; their use of language like “values” and empty rhetoric is but one example.

All of this – and much more – has seen populism on the rise.

Populism – as defined by Oxford Languages – is “a political approach that strives to appeal to ordinary people who feel that their concerns are disregarded by established elite groups.”

Put another way, the mass of citizens in the United States do not feel elected officials even listen, much less represent them. For years, it was business as usual: corporate deals, tax breaks, using YOUR TAX DOLLARS to essentially buy jobs, and the citizenry has just dealt with it.

Nature abhors a vacuum, however, and, when people are fed up, someone or something will fill that void. Indeed, this is precisely what RFK Jr. and Glenn Beck discussed just the other day on a podcast.

I agree with @glennbeck that the real war in America today isn’t between left and right; it’s a class war. The question is whether the rising populist revolution is going to be hijacked by dark, regressive forces – as it was in the 1930s – or whether it will be harnessed by more… pic.twitter.com/HprckIR9gt

— Robert F. Kennedy Jr (@RobertKennedyJr) April 29, 2024

Peter Drucker, commonly referred to as the father of modern management, wrote in his excellent book Managing In The Next Society (2002),

“For example, I have often advised managers that a 20-1 salary ratio is the limit beyond which they cannot go if they don’t want resentment and falling morale to hit their companies. I worried in the 1930s that the great inequality generated by the Industrial Revolution would result in so much despair that something like fascism would take hold. Unfortunately, I was right” – Emphasis mine.

There is no doubt the systemic problems in our current economic model have created a swelling populist movement. And, just like RFK Jr., Glenn Beck, and Mr Drucker acknowledge, class warfare creates massive inequality and despair. What we haven’t seen yet – nor can we predict – is what happens next.

I’ll let Mr. Drucker have the last word here, though:

“Today, I believe it is socially and morally unforgivable when managers reap huge benefits for themselves but fire workers. As societies, we will pay a heavy price for the contempt this generates among the middle managers and workers” – Emphasis mine.

Where Do We Go From Here?

Our economic model desperately requires a change

I don’t pretend to be a prophet. Populism is amoral – neither good nor bad – and has shown itself to be a powerful movement in the past. One thing we can tell for certain: you can only squeeze people so much before they decide enough is enough. There comes a point where they are so downtrodden, so destitute, and so apathetic that they don’t care anymore about the current system – they are ready to burn it down. For illustration purposes, this is precisely what is taking place on a large scale with the youth in America today. They have been lied to their entire youth, made economic slaves through predatory loan institutions, cannot survive on the paltry wages and greedflation plaguing the country, and all the while, the income inequality gulf grows wider. The youth feel like they cannot get ahead – and that’s largely true because the system (an unholy alliance of big government and big corporations – the elites, if you will) has made it that way.

From what can be observed, it seems as though the country is approaching a tipping point.

Elected officials, for what they are supposed to stand for, could actually try to represent their constituents for once and not corporate interests. They would be in company with individuals like Adam Morgan:

And his own comment on this video?

“My constituents told me to vote no on the $1.3 billion VW project ($400 million of which is taxpayer cash). But the swamp wants me to ignore those “back home.” I’ll always listen to my constituents far more than lobbyists, big corps, other legislators, or unelected bureaucrats.”

Wanna take a guess on how much tax-payer money was spent in the VW facility in Chattanooga, Tennessee?

814 MILLION. 

It isn’t a right vs. left fight – that’s a distraction.

It’s elites (big business AND government) vs. YOU.