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Yahoo Finance Plus Work stoppages like the UAW strike have become a rarity
The United Auto Workers (UAW) strike is intensifying, with the union threatening to hit more plants and politicians entering the fray. Republican presidential contender Donald Trump says he’ll address striking workers on Sept. 27, and some Democrats are urging President Joe Biden to show more solidarity with folks walking the picket lines.
Economists are trying to tally the damage the strike may cause to the broader economy. But the most notable thing may be how little damage the strike causes and how rare work stoppages have become, especially compared with the decades following World War II.
Back in the 1950s — “happy days,” to many nostalgic Americans — there were an average of 352 strikes per year, affecting 1.6 million workers. Strikes remained common until they started to drop off in the 1980s. During the last 10 years, by contrast, there have been only 15 strikes per year, on average, affecting 140,000 workers. That’s a 91% drop-off in the number of workers going on strike each year.
Less disruption via strikes is good for the economy. “The UAW strike will strengthen the perception that the US has been plunged into a new period of industrial unrest at the hands of resurgent unions,” Capital Economics noted in a Sept. 19 analysis. “But this is hardly a return to the chaos of the 1970s.”
It’s more debatable whether the trends responsible for the huge drop-off in strikes are beneficial. Union membership has declined from a peak of 34% right after World War II to a post-war low of just 10.1% last year. Unions tend to give workers more bargaining power, so the decline of unions has left some workers with less leverage to demand better pay, benefits, and work conditions.
A Treasury Dept. report from August linked the decline in union membership with stagnating middle-class wages and worsening income inequality during the last 40 years. “Increased unionization has the potential to contribute to the reversal of the stark increase in inequality seen over the last half century,” the report concluded.
It’s also true, however, that the manufacturing work most likely to be unionized has shrunk as a total of all employment, from 30% in 1950 to just 8.3% today. Most workers are in the service economy, which is far less likely to be unionized.
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The popularity of unions also dropped, from a peak approval rating of 75% in the early 1950s to a low of 48% in 2009, when overstuffed union contracts contributed to the General Motors and Chrysler bankruptcies. Unions have become more popular since then, but given the broad retreat of unions, that could be more of a theoretical belief that unions can help struggling workers than a judgment on unions’ actual effectiveness.
There’s been a modest resurgence of strike activity in 2023, which some labor activists find reassuring. Around 530,000 workers have gone on strike this year in 34 different labor actions, the highest number of striking workers since 1986.
The biggest strike so far this year is the Screen Actors Guild stoppage, which began in July. That involves 160,000 workers and is still ongoing. A Writers Guild strike that began in May and involves 11,500 workers is also still underway. If the UAW strike intensifies it could ultimately involve more than 100,000 workers and cause a shortage of some vehicles on dealer lots, just as the auto industry is getting back to normal from several years of dislocations related to the COVID pandemic.
It's unlikely, however, that a new era of muscular labor unions is dawning. If the UAW workers were to get what they want, it would put the three Detroit automakers at an even bigger disadvantage on labor costs than they already face compared with non-unionized competitors such as Tesla and most of the foreign brands that operate factories in the United States.
General Motors, Ford, and Jeep parent Stellantis have options. They all have substantial operations in Mexico, where labor costs are sharply lower. They can still earn a healthy profit building high-margin trucks and SUVs with union labor at US plants, but many lower-priced vehicles are only economically viable if built outside the United States.
There are now fewer than 400,000 unionized auto workers in the United States, with UAW membership down 11% since 2017. The number of auto workers in Mexico is more than twice the number of UAW workers and growing. The UAW has some leverage in 2023, but the union’s glory days are in the increasingly distant past.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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