UAW strike: Why the rise in work stoppages is likely more of a blip than a trend

Autoworkers on currently carrying out a targeted strike against the Big Three automakers, Ford (F) , General Motors (GM), and Stellantis (STLA), while both Hollywood writers and actors are striking against the big movie and streaming studios. It may seem that there may be a new rise labor activity, but Yahoo Finance's Rick Newman is "not too sure about that." He explains why in the video above.

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Video Transcript

[AUDIO LOGO]

SEANA SMITH: We're joining you live from the NASDAQ market site in Times Square. Now the UAW so-called historic strike is expected to heat up later this week with the Union threatening to up the ante and hit more plans. Now it's true that work stoppages like the autoworkers strike are less common than they were back in the heyday for the unions in the 1950s.

So what does this mean for the state of labor and the economy? Here with more on that and what's on his radar, we've got Yahoo Finance's Rick Newman. Rick, tell us more how this compares to what we saw decades ago in the 1950s.

RICK NEWMAN: Research firm Capital Economics put out a note yesterday talking about the nature of work stoppages in the United States. And they did a chart that really caught my interest. I think we can put it on the screen. I mean, the number of work stoppages is so much lower than it was in the 1950s, 60s, and 70s and even the early 1980s, that it has almost stopped being a thing in the labor market.

So we have some prominent strikes here in 2023, obviously the UAW strike, which is just getting started and seems like it's likely to intensify and last for at least a couple of weeks. We still have ongoing strikes by the Writers Guild and by the Actors Guild in Hollywood.

And some labor activists are pointing to this and saying, wow, we have a big boom in strike activity here in 2023. This could be the return of labor unions and maybe great news for workers. I'm not so sure about that. I think that the long term trend here has been away from strikes. And that probably is a good thing for the economy overall. I mean, you know, labor unrest is obviously disruptive.

And the thing we can point to here in 2023, you know, economists are now saying how much damage is this actually going to cause to the broader US economy. And the answer is hardly any, hardly any damage to the US economy even if this strike drags on for a couple of months.

Now it will hurt the auto sector. But we've got two months of supply of most vehicles for the auto manufacturers. So dealerships ought to stay stocked. And when you look at what economists are saying about the overall effect on the economy, I mean, it's in the decimal points of GDP even in a worst case scenario. So getting a lot of tension, but strikes just almost don't happen anymore.

BRAD SMITH: Rick, we know you've also been following everything about the strikes but also who is visiting, who is saying what about the strikes. And we understand that former President Trump has also been making some selective visits. What do you know about that so far?

RICK NEWMAN: Well, he said that his plan is instead of participating in the next Republican debate, which I think is on September 27, he's going to go somewhere in the upper Midwest and address striking autoworkers. Now this is interesting because the UAW, the United Auto Workers Union did not endorse Trump in 2020. The Union endorsed Joe Biden in 2020. And Trump, of course, is pissed off about that.

So the main thing he's been saying about the strike is that the UAW leaders suck and they're selling out the workers. So very interesting to see what kind of message Trump is going to have for the Union workers. He's not really taking their side so much against the automakers that they are striking. He's taking the autoworkers side against their own Union leaders who are the ones representing them in these strikes.

So if that's what comes off, I mean that's a fairly muddled message from Trump. I'm not sure that's going to do him any good. But look, I mean, we all know he's looking for ways to get some attention without attending the GOP debates. So I wonder if the storyline is going to emerge that Trump is kind of using the autoworkers just as an attention getting ploy for himself.