UAW-automakers negotiations pit falling wages against skyrocketing CEO pay: U.S. auto companies have the means to invest in EVs, pay workers a fair share, and still earn healthy profits

Key takeaways:

  • Profits at the “Big 3” auto companies—Ford, General Motors, and Stellantis— skyrocketed 92% from 2013 to 2022, totaling $250 billion. Forecasts for 2023 expect more than $32 billion in additional profits.
  • CEO pay at the Big 3 companies has jumped by 40% during the same period and the companies paid out nearly $66 billion in shareholder dividend payments and stock buybacks.
  • Autoworker concessions made following the 2008 auto industry crisis were never reinstated, including a suspension of cost-of-living adjustments. As a result, workers’ wages in the union and nonunion sector alike are falling farther behind inflation: Across the U.S., auto manufacturing workers have seen their average real hourly earnings fall 19.3% since 2008.
  • Broadly sharing profits with workers will be even more critical as the industry focuses on becoming greener—both in what and how they produce cars and trucks. The Big 3 firms are set to receive record taxpayer-funded incentives to support their expansion into electric vehicle (EV) manufacturing. EV transition policies and the economic and climate potential they promise will not be sustained if auto workers and auto communities are again asked to sacrifice good jobs.

United Auto Workers (UAW) members at the “Big 3” companies—Ford, General Motors (GM), and Stellantis—are poised to strike this week when their contracts expire September 14. It’s a historic and economically momentous time for this foundational industry in America’s industrial-technological base, and the outcome of the negotiations has potentially profound implications for how successfully we tackle the climate crisis.

The deep roots of the UAW’s current dissatisfaction share much with those taking labor actions to fight back after decades of rising inequality: The pay of typical workers has lagged far behind more-privileged actors in our economy, and the reason for this growing inequality is an erosion of workers’ leverage and bargaining power in labor markets. After surveying here the recent trends in auto industry wages, corporate profits, and executive compensation, it’s hard to blame workers for standing up now. It’s also clear that the companies have more than enough means to meet worker demands, remain profitable, and make the necessary investments to grow into electric vehicles. In fact, the “Big 3” companies can ill-afford not to recruit and retain talented workers in a rapidly transforming industry.

In the 2008 auto industry crisis, GM and Chrysler (now Stellantis) agreed to bankruptcy and government-supported restructuring. While this deal saved jobs throughout the auto sector, it came with steep costs to workers. Union workers agreed to a wage freeze, entry of lower-wage “tiered” workers, and other concessions affecting retiree pensions and health care benefits. In 2009, the companies suspended contractual cost of living adjustments and have not had one since. Since that time, average consumer prices have increased nearly 40% and autoworker wages have not come anywhere close to keeping up.

As unionized auto wages fell behind, so did non-unionized auto wages. This spillover effect whereby wage suppression of union workers filters out into the broader economy and damages the wages of non-union workers as well is a key dynamic driving U.S. inequality in recent years. Bureau of Labor Statistics data in Figure A show that production and non-supervisory workers across the broader motor vehicle industry, union and non-union, have taken it on the chin since the 2009 deal. Those working in motor vehicle manufacturing saw their average hourly earnings fall a staggering 19.3% since 2008, after adjusting for inflation. Including the broader motor vehicle parts industries—where outsourcing strategies have long compressed industry wage structures and thus didn’t have as far to fall—average earnings fell 10% in real terms.

U.S. auto wages plunged following 2009 industry restructuring: Real average hourly earnings for production, non-supervisory workers, 2008–2023

Motor Vehicle Manufacturing Motor Vehicles and Parts
2008 0.0% 0.0%
2009 -4.8% -1.2%
2010 -1.8% -2.1%
2011 -5.5% -5.5%
2012 -10.0% -10.2%
2013 -12.2% -12.4%
2014 -13.5% -12.6%
2015 -14.2% -12.3%
2016 -12.3% -13.0%
2017 -12.7% -14.3%
2018 -12.9% -12.3%
2019 -14.8% -11.0%
2020 -14.6% -11.1%
2021 -16.2% -10.0%
2022 -20.7% -10.4%
2023 -19.3% -10.0%
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