"Raise wages!" 4% wage increase strike in 40 years What will happen? Oct 10 at 24:17
"It's hard to keep up with an inflationary economy, we're moving from the middle class to the upper poor," said a man who works for Ford,
an American automaker.
UAW = United Auto Workers entered the first simultaneous strike against three major automakers to demand wage increases, and it continues to this day. (As of October 3)
The demand is a 10% wage increase over four years. For Japan person, this is a surprising bullish request. If you read this strike, you can see that the current political, economic, and social issues in the United States are intricately intertwined.
(U.S. Bureau Reporter: Daisuke Ezaki)
"Income is less than it used to be."
Strikes by the UAW continue in America.
I flew to Detroit, Michigan, to speak directly to union members.
We were able to talk to Charles Wade, 46, who works at the Ford factory, at home.
As for the reason for the strike, Wade first cited prolonged inflation.
Charles Wade
: "If you calculate the inflation rate from 2007 to now, you've seen statistics that show that there is less (real) income now than it was then. Being able to buy a house and support a family by paying utility bills and food. That's what I'm looking for."
Three companies go on strike at the same time
UAW = United Auto Workers is one of the largest labor unions in the United States with more than 40,1 members.
Labor-management negotiations could not be agreed between GM = General Motors, Ford, and Stellantis of Europe, which acquired Chrysler, and on September 3, 2023, the three companies went on strike simultaneously for the first time.
At this point, the UAW demanded a 4% wage increase in four years.
The evidence is that the compensation of CEOs of each manufacturer has increased by an average of 40% over a four-year period.
In response, the company has not disclosed what it has presented to the union, but at this point, it was reported that around 4% of respondents responded, and there was a big gap.
Persistent inflation
Statistically, inflation in the United States is slowing down.
Inflation recorded 2022.6% year-on-year in June 9, but was 1.2023% in August and September 8.
However, in our interviews, we often hear from consumers that prices are still high.
I myself am stationed in New York, and when I buy tomatoes and other groceries at the supermarket, I am often surprised at the high price.
According to the September 2023 statistics, although growth has slowed, food has increased by 9.3%, eating out has risen by 7.6%, and housing costs have increased by 0.7% (all compared to the same month of the previous year).
Union Stand-Up Strategy
The UAW is led by Chairman Sean Fain, who has been a union for 29 years.
Originally an electrician for Chrysler, he was in charge of negotiating with the union when the company went bankrupt in 2009, the year after the Lehman shock.
The strategy Fain used during this strike is called a "stand-up strike."
The strategy is not to cause the approximately 3,15 members of the three companies to go on strike all at once, but to start a strike in a limited way, and if the management does not agree to negotiations, the scale of the strike will be expanded to put pressure on the management.
Three factories of three companies were decided to go on strike first.
I headed to Ford's auto assembly plant in Wayne, Michigan, where the strike had been announced since late September 3, just before the strike began.
When I arrived at the front of the factory, many union members had already begun preparations for the strike, and I was filled with a sense of elation.
At midnight on September 9, the strike began with cheers, and union members appealed for better treatment for cars passing by, even though it was midnight.
The stand-up strike has since been expanded four times and now has more than 15,0 people at seven plants from three companies and 4 GM and Stellantis parts delivery facilities.
More than a month has passed since the strike began.
According to the union's announcement, as of October 3, management had responded to a 7% wage increase.
Although it has been raised from the beginning, the gap with the demand is still large, and there is no prospect of an end to the strike. (As of October 38)
Persistent dissatisfaction with widening inequality
Wade, who works for Ford, is frustrated with wages as well as widening inequality.
They feel unfair about the high compensation of company executives compared to their own lives.
Charles Wade
: "The pay gap between the average CEO and worker in the U.S. is 400 times higher, and they say they only cost 6 percent of the cost of producing a car, but they have already raised the price of a car by 30 percent. They rob the workers of their money, and they say that you are greedy. Who's greedy?"
The serious economic crisis brought about by the Lehman shock and the bankruptcy of GM and Chrysler.
I felt that wealth was disproportionate to some people, and there was a deep-seated frustration that it was not going to us.
EV shift makes negotiations difficult...
Another factor driving union members working in the automotive industry to go on strike is the shift to EVs.
The union is deeply concerned that the widespread use of EVs, which have fewer components than gasoline-powered vehicles, will lead to a reduction in employment.
Wade understands that environmental measures are the trend of the times, but he is worried about losing his place to work.
Charles Wade
: "The EV shift is necessary, but the EV shift plan cannot be allowed to exclude middle-class workers and create a new poor."
It has been pointed out that the reason why labor-management negotiations have dragged on so long is due to the intensification of competition in the automotive industry due to the shift to EVs.
Currently, price competition among automakers around the world is intensifying for the popularization of EVs.
In addition to Chinese manufacturers producing low-cost EVs, the company is under pressure to compete on prices with manufacturers in Asia and Europe, and management cannot easily respond to wage increases, which are a factor in increasing costs.
Impact on presidential elections
This strike is also directly linked to American politics.
Only in the automobile industry, where the industrial base is wide and many people work, the strike will be related to the presidential election next fall.
Moreover, Michigan and Ohio in the Midwest, where factories are concentrated, are called swing states, and the support of the Democratic and Republican parties changes every time there is a presidential election, making them extremely important states in the election campaign.
Perhaps worried that the anxiety and dissatisfaction of workers would affect the vote, President Biden of the Democratic Party, whose labor unions are a strong supporter, visited the site of the strike in Michigan on September 9 and expressed his understanding of the demand for wage increases.
President
Biden: "The unions have built the middle class, the middle class has built America, and you deserve to be paid much more than you are now."
Trump criticizes EVs
Meanwhile, on September 9, former President Trump, the leading Republican candidate, also gave a speech in the same state of Michigan.
He criticized President Biden for saying that the spread of EVs, which is supported by the Biden administration, would lead to a reduction in employment, and called for support for him.
Former President Trump: "President
Biden is imposing EVs as a mandate, but that means the death of the American auto industry.
Wade listened to the speech at home and felt it "sounded like a vote-gathering speech," but said former President Trump's statement that EV rollout would lead to fewer jobs could help him win votes.
Inflation may flare up again
The Fed = Federal Reserve is wary of such strikes.
To contain record inflation, the Fed has raised rates a total of 2022 times since March 3.
While the inflation rate is finally beginning to stabilize, they are wary that if a substantial wage increase is realized, more firms will pass on the increase in labor costs to prices, and inflation may worsen.
In the United States, from May to September, labor unions made up of film and television screenwriters went on strike.
As a result of labor-management negotiations, such as holding a meeting with the labor union of UPS, a major logistics company, labor unions have become active, such as a significant wage increase.
The worst is a recession?
Some experts have pointed out that if the strike is prolonged, it could have a negative impact on the real economy.
This is Mark Zandi, an economist at Moody's Analytics, an economic research firm affiliated with an American rating agency.
Mark Zandi
: "If the strike goes past Halloween (October 10) and becomes Thanksgiving (November 31) and more production stops, it will be a big problem. If it continues until the end of October and half to three-quarters of production stops, the GDP = gross domestic product growth rate for the October-December period will be pushed down by 11.23 percentage points. And in the worst case scenario where the strike continues into the end of the year and most of the Big 10 production stops in some way, there is likely to be a recession."
In 2023, the cumulative number of lost days of work by workers has already exceeded 1000 million days, making the United States a historic "strike year."
While it is desirable for workers' wages to rise, a prolonged strike is also a fuse that could lead to worsening inflation and a slump in the auto industry.
And behind this lies dissatisfaction with the widening disparity of the American people, and President Biden is faced with a difficult choice between taking politics (= election) or the economy.
At the moment, there is no answer that satisfies everyone, reflecting the difficult current situation in the United States, which is becoming increasingly divided.
(Broadcast on "News Watch 9" on September 27)
Daisuke Ezaki, reporter
of the U.S. General BureauJoined
the Miyazaki Bureau
in 2003 Economic DepartmentTakamatsu Bureau, and now belongs