Auto Strike Has Political And Economic Consequences
September 25, 2023—As one major labor union strike in the United States ends, another one is getting bigger. U.S. politicians gearing up for the 2024 election are taking notice.
Both strikes are taking place as industries undergo technological change. For writers, the issues relate to the gig economy and artificial intelligence. The auto workers, meanwhile, are trying to secure a future in the industry as it undergoes a global transformation to electric vehicles.
While the writers’ strike affected the entertainment economy and America’s viewing pleasure, the autoworkers’ strike has the potential to impact the broader U.S. economy.
Hollywood Writers Strike
First, an end is near in the Hollywood drama of the year: The writers’ strike. After nearly a five month standoff, between the major Hollywood studios and screenwriters, the parties reached a tentative deal. The Writers Guild of America announced the agreement late Sunday.
“We can say, with great pride, that this deal is exceptional—with meaningful gains and protections for writers in every sector of the membership, the WGA said.
The ‘Gig’ Economy and AI
At the start of the strike, the union said the writers faced an “existential crisis” as the industry turned their professional into a “gig economy.” The writers asked for weekly salaries, residuals on streaming shows, and protections against the use of artificial intelligence. Specifically, the guild asked the studios to promise not to use AI technology to write or rewrite literary material. The studio representatives initially rejected that request outright.
The tentative agreement is under wraps until it is sealed and delivered. The final steps in the deal-making include acceptance by the leadership and screenwriters.
Economic Impact
The impact on the California economy alone is estimated at $5 billion, according to the Los Angeles Times. Companies like Disney, Netflix, Apple, Amazon, Sony, Warner Bros. Discovery, and Paramount are also feeling the pinch as well as numerous small businesses. Members of the actors guild, meanwhile, are still striking in a months-long dispute with the studios.
Auto Workers Strike, And Politicians Are Taking Notice
While the writers’ strike affected the entertainment economy and America’s viewing pleasure, the autoworkers’ strike has the potential to impact the broader U.S. economy. The auto industry accounts for 3.5 percent of the U.S. economy, according to the Center for Automative Research. A strike not only impacts workers, the companies, and consumers, it could impact the broader economy.
Politicians are taking notice. Both parties are vying for blue-collar votes in the 2024 presidential election. President Joe Biden is scheduled to make a speech in Michigan on Tuesday. Former President Donald Trump is also planning on meeting with striking workers.
The only constant is change itself, and the industry is in the thick of it.
Size And Scope
Since September 14, a portion of auto workers started striking against GM, Ford, and Stellantis when the union’s contract with the industry expired. So far, Ford has reportedly met some of the union’s demands.
But the strike itself is growing. It began with 13,000 workers walking out of three assembly plants. Since then, 5,600 more workers joined the United Auto Workers’ strike. That’s about 13 percent of the union’s membership. It spans dozens of factories in 20 states, and the UAW warned it might grow. The industry employs 146,000 unionize workers.
What Do Workers Want?
It’s hard to find specific grievances on the UAW website. What’s clear is the industry is undergoing massive economic changes, and the formula is not adding up for workers. UAW President Shawn Fain says new car prices rose by 30 percent over the past four years while wages for workers rose 6 percent. Furthermore, he argues that CEO pay rose by 40 percent.
But is Fain fighting fair? The companies say they face price competition from Europe and Asia, and that the demands would make them uncompetitive.
According to reporting by the Associated Press, workers are seeking larger salaries and better benefits. Specifically, they want a 36 percent increase in pay over four years, an end to varying wage tiers, a 32-hour work week with 40 hours pay. The AP says a top-scale assembly worker earns about $32 an hour while temporary workers make about $17 an hour.
The larger issue, however, might be anxiety growing as the Big 3 automakers transition to electric vehicles. The thinking is that EVs need fewer parts, and perhaps fewer workers. The only constant is change itself, and the industry is in the thick of it.
