September 28, 2023 | OPINION | By Aditya Yadav
The United Auto Workers (UAW) are on strike all around the United States – their total number stands at 18,235 striking workers, with Michigan bearing the brunt at around 6,850 workers on strike at 14 facilities. The strike’s premise resides on wage gaps between automakers’ laborers and executives, inflation compensation and the notion that the electric vehicle transition is going to cost a lot of jobs.
The UAW is asking for a 40% raise in wages over four years – a number the UAW states is pro rata to the raises the C-suite of the big three U.S. automakers – Ford, General Motors and Stellantis, the parent company of Jeep, Ram and Chrysler – received in the previous four years. The UAW is also striking for raises in wages that would compensate for increases in cost of living due to inflation.
To support the shift to a clean energy economy, President Joe Biden signed the Inflation Reduction Act in August 2022, which contributed billions of dollars in private sector investment to new electric vehicle factories. However, due to the labor cost advantage of right-to-work states, 55% of this private-sector investment is being devoted to right-leaning, non-unionized states, such as Tennessee and Alabama.
This, coupled with the significant reduction in jobs (in the short term) due to the construction of electric vehicles requiring 30% fewer workers than gas-powered cars, presents a precarious position for UAW members. And so, to combat this, Biden, through the Department of Energy, instituted $15.5 billion in funding to automakers to transform internal-combustion factories in the Midwest into carbon-free electric vehicle plants.
Prior to this, Biden tried to improve incentives for union autoworkers by introducing a $4,500 tax credit for union-made U.S. vehicles in his climate law, although this was struck down.
The IRA, in total, pledged about $369 billion in incentives for the clean-energy transition. My position is that when Biden signed the IRA and provided these exorbitant subsidies, he precipitated the precipitous position of the UAW.
Despite Biden’s declaration of being “the most pro-union President leading the most pro-union administration in American history,” he presented a severe quagmire to one of the largest unions in the nation, where automakers would use these subsidies to construct electric vehicle facilities in the South and other regions of the U.S. that fall under right-to-work laws, and therefore have lower labor costs compared to Detroit and the Midwest due to anti-unionization and union-busting policies, thus providing a considerable cost advantage for these car manufacturers.
This process is effectively laying off thousands of UAW employees in Detroit as well as in states such as Colorado and California. The $15.5 billion in subsidies, grants, and loans provided by the Department of Energy would not offset the cost advantages of constructing electric vehicle plants in right-to-work states.
And perhaps this provides the reason for Shawn Fain, the president of the UAW, to withhold a UAW endorsement of Biden. This economic neglect also provides insight into shifting political allegiances occurring within the blue-collar and working class as well as the plight of democracy.
The erosion of the working class due to significant inequality provides a foundation for populists such as President Donald Trump to sway them, particularly those who belong to unions and have a history of voting Democrat. Trump, who Fain himself warns against, is an instigator.
Although, it can be said that the reason Trump can use this logic is because there has not been proper care for the working class, particularly in the auto industry.
“There’s a lot with the EV transition that has to happen, and there’s … hundreds of billions of our taxpayer dollars that are helping fund this, and workers cannot continue to be left behind in that equation,” Fain said in a statement.
“64% of congressional districts with median incomes below the national median are now represented by Republicans – a shift in historical party demographics,” according to Axios.
The next step to further buttress the demands of a high-strung capitalist economy is to slowly besiege one of the most, in my opinion, democratic of institutions: unions. Union membership reached the lowest level on record in 2022, standing at 10.1%. This, coupled with a $340 million anti-labor consulting industry and outdated labor laws creates despicable environments for unions to thrive.
“In America, when a new business forms, the default is non-union,” according to NPR.
Yet, there still is an existential, democratic, and human need for unions to protect those who “ain’t got a chance unless they organize.” And this democratic ideal of unions can be supported by the rise of alt-labor groups forming in right-to-work states.
The UAW strike is something I strongly believe in and support, although this statement is imbued with a certain futility – unions account for those unaccounted for. Unions provide democracy – a property which, in fact, makes capitalism sustainable. And that democracy is faltering.