I read an interesting article in the past two days about the entire language of this process and how it has been subtlely manipulated for decades to steer any potential labor strike in one consistent direction – in favor of corporations.
Every contract negotations starts with this narrative:
- management is “offering” X
- labor is “demanding” Y
“Offering” sounds very open minded, giving. “Demanding” sounds very selfish, greedy.
Management is “offering” a pay structure that simply tacks on 4% yearly increases to an existing wage structure where new workers can earn up to $17.00/hour and senior tier works can earn up to $33.00/hour. This reflects language agreed to in prior contracts where management succeeded at convincing senior workers to protect their own wages by establishing a much lower entry-tier structure for newbies that would perpetually leave them behind going forward. Imagine existing computer science engineers at the FANGs agreeing with the FANG leadership to protect their inflated $220,000 salaries by capping salaries for new college hires at $112,000 per year. That might work… for a while. Until all of the graybeards want to retire and the depressed entry level wages have driven all engineers away from the FANGs in particular or computer science in general.
Assuming workers would get paid for a minimum of two weeks vacation, 52 weeks x 40 hours/week = 2080 hours so these workers are making “up to” $35,360 or $68,640 for top tier workers. There are people working in fast food that are making $17.00/hour. Hourly wages have risen about 6% per year under current contracts which means these workers have stood still through the 3-year bout of pandemic induced inflation.
Union members are “demanding” a 40 percent increase over the next four-year contract. That’s about an 8.7% yearly hike in wages. Official inflation figures for the US were 1.4% (2020), 7.00% (2021), 6.5% (2022), 3.7% (so far 2023). With 2020 dollars as a 1.00 baseline,
1.00 (2020) = 1.00 * 1.014 * 1.07 * 1.065 * 1.037 = 1.198 (September 2023)
With 6% annaual wage increases, average union pay has grown to:
1.00 (2020) = 1.00 * 1.06 *1.06 * 1.06 * 1.06 = 1.262 (September 2023)
So wages have risen 26.2% but inflation has wiped out 19.8% of that, leaving wages only 6.4% higher after four years. During a period where auto companies increased the existing obscene pay of their execs by up to 40% and – more critically – undertook stock buybacks to funnel profits back to shareholders while claiming they were “investing for the future” with battery electric vehicles, etc.
That’s some “offer” on the part of management. And note how the labor “demand” is always summarized as a cumulative (GIANT) number instead of a per-year figure to compare against inflation?
Management may not realize it but kids who grew up in the 70s and 80s had little interest working in a car parts factory tending machines as they stamped out ball joints, brake parts, etc. or standing 8 hours a day inserting seats inside cars on an assembly line all day. Kids growing up today have even less inclination to do this labor, especially for car models they will NEVER be able to afford on $17/hour wages. Even if Tesla figures out how to cut labor by another 50% with its gigastamp based design, there is still going to be a shortage of workers willing to do this kind of work over the next decade. Suppressing already-low wages with another renewal that preservers the devil’s bargain in prior contracts that protected wages of senior workers by creating a lower wage tier ladder for new workers won’t cure that problem.
People can stand on the sideline with whatever opinion they wish to draw from their understanding of economics or management / labor dynamics but having coverage of the power struggle consistently distorted by the flawed terminology that has become boilerplate doesn’t accurately convey where the dollars are in the struggle and the fairness of the current / proposed redistributions. Management is allowed make its attempts to limit costs via wages but workers are equally justified in making their case to avoid setting patterns that will impoverish workers across a variety of industries, unionized or not.