“Ford has agreed to a 25% increase over the life of the contract, which extends slightly beyond four years,” Bloomberg reported. “That isn’t the 40% sought originally but initial negotiating positions hardly ever make it through talks intact and it is still a huge win for the UAW. In addition, starting wages rise by 68%, according to the UAW, and top wages by a third.”
Other union wins included reinstating cost-of-living allowances, eliminating wage tiers and speeding up wage progression. “We told Ford to pony up, and they did. We won things nobody thought was possible,” UAW President Shawn Fain crowed after the deal was announced.
In a celebratory announcement Thursday that the economy grew 4.9 percent in the third quarter, Biden boasted that “the UAW and Ford reached a historic tentative agreement that provides a record raise to auto workers and is a testament to our strategy for a powerful manufacturing future made in America, with good, union jobs.” (A Treasury Department report released Thursday touted the administration’s gains: “The United States has seen a particularly strong GDP recovery and is on track this year to reach the level that would have been predicted by the pre-pandemic trend. Global labor markets continue to strengthen, and the United States has been especially resilient. U.S. inflation has cooled sooner and more quickly than in other advanced economies.”)
The tentative UAW agreement is not an isolated occurrence for labor. While 2023 saw an uptick in strikes, those work actions paid off. “Across the U.S., labor unions are winning surprisingly large contract settlements as workers have reset their expectations to demand considerably more than they did just a few years ago, and that has in turn pressured many corporations to reset — and increase — the pay packages they are giving in union contracts,” the Guardian noted. “The result has been a wave of impressive — sometimes eye-popping — union contracts over the past year, far more generous than in recent decades.”
These include especially rich deals for employees at UPS (340,000 workers), Kaiser Permanente (85,000) and American Airlines (15,000), as well as writers for Hollywood studios. Labor experts credit the tight labor market, rising worker dissatisfaction in the wake of the pandemic, outsize CEO pay (which provoked outcries from labor) and more-aggressive union negotiation.
“It’s critical to understand that these [auto] strikes are happening at the same time as other historic strikes,” Veena Dubal, a labor expert with the University of California at Irvine, recently told PBS. “Collectively, workers are withholding their labor to change the terms of the bargain — one might even say, the social contract — in the U.S.”
The strikes and major gains for workers also come as workers are making strides in organizing workplaces that previously resisted unions (e.g., Starbucks). When unions strike and make significant gains, other employees become motivated to organize as well. And although unionized workers still represent just about 10 percent of the labor force, gains for unions often spur increases for nonunion workers not only at those employers but also throughout the economy.
Democrats have long attacked “trickle-down” economics as disproportionately benefiting a few at the top while leaving workers behind. Given Biden’s emphasis on building the economy from the “bottom up and the middle out,” these deals signal some success in addressing the enormous disparity between the salaries of CEOs and ordinary workers. Moreover, Biden’s assertion that he is the most pro-union president in history allows him to claim a measure of credit for substantial increases in workers’ take-home pay. In short, these big union wins bolster the perception that “Bidenomics” is delivering as promised.
“President Biden has long believed, contrary to most Wall Street forecasts, that if we could maintain the strong job market while helping to ease inflation, we’d see real wage gains supporting solid consumer spending and strong GDP growth — and that’s precisely what we’ve seen,” Jared Bernstein, head of the president’s Council of Economic Advisers, told me. “Add on record gains in median net worth and unprecedented investments in domestic manufacturing, and you get a good picture of Bidenomics at work.”
Clearly, the U.S. economy is doing far better than public perceptions suggest. Maybe it is time to recognize the strength of the country’s economic recovery and some signs (in part due to labor contracts) that prosperity might be shared more widely than it has been in the past.
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