UAW’s record deal could boost others’ wages as labor notches another win

Striking United Auto Workers member Candis Holmes pickets outside the Ford Michigan Assembly Plant in Wayne, Michigan U.S., Sept 19, 2023. REUTERS/Rebecca Cook/File Photo

The tentative agreement reached between the United Auto Workers and two of the Detroit Three automakers marks another victory for labor unions that have turned up the pressure on big corporations to put better deals on the table.

Unions have taken an aggressive approach to campaigning with a series of high-profile battles across the industrial, auto, entertainment and healthcare industries. Experts say gains won by unions could spur more organizing and motivate non-unionized companies to try to stave off those efforts.

The UAW’s talks, replete with weekly addresses by union president Shawn Fain, were among the most unabashed. The union has come to tentative agreements with Ford Motor and Chrysler parent Stellantis; talks with General Motors are still ongoing.

“This is a set of negotiations, historically, where gains made in Detroit would be viewed and adapted by many other industries across the economy,” said Harley Shaiken, labor professor at the University of California, Berkley.

Union worker compensation has finally caught up to non-union wage increases dating from the COVID-19 pandemic, according to U.S. federal data, as the labor market has remained tight with unemployment at just 3.8 percent.

READ: UAW’s new deal with Ford includes $8B in manufacturing investments

The tentative Ford and Stellantis deals will amount to total pay hikes of more than 33 percent when compounding and cost-of-living increases are factored in. The agreements may be a selling point for non-union shops to push for unionization, said San Francisco State University labor and employment professor John Logan. Nissan and other competitors may feel compelled to boost wages to retain their workforce.

“The Big Three would want the UAW to organize Tesla,” he added.

Public support for unions has helped engagement in traditionally unionized industries such as manufacturing and healthcare. A Reuters poll showed the majority of Americans stand behind striking workers.

Employee-led unionization efforts at retailers, such as Amazon and Starbucks, have reflected a consensus among workers who see unions as a means to secure better wages and working conditions.

Organization has been difficult in recent years. About 11.3 percent of workers were represented by unions last year compared with 23.6 percent in 1982, according to data analyzed by the Economic Policy Institute.

Ripple effect

The UAW contracts are among many deals reached this year, along with agreements at UPS and construction equipment maker Caterpillar. Workers at other companies, like Mack Truck and equipment makers CNH Industrial and Deere & Co have all rebuffed initial deals despite raises that in some contracts appeared significant.

Increased awareness among workers about record profits has translated to company concessions and improved deals, said Marcos Feldman, senior researcher at Jobs to Move America, a labor organizing nonprofit.

“The task is to solidify and institutionalize it,” Feldman said. “Unionizing efforts are the most aggressive they’ve ever been.”

President Joe Biden considers unions a cornerstone of his economic policies, including the $1.2 trillion bipartisan infrastructure law to boost American manufacturing.

Employers may respond by boosting worker pay to hold off union efforts, or step up efforts to prevent unionization.

Some Starbucks employees have claimed the coffee chain illegally retaliated against organizers by firing employees and closing stores. Earlier this month the U.S. Department of Labor ordered the company to disclose documents pertaining to anti-union spending.

Amazon has dissuaded unionization, with the National Labor Relations Board (NLRB) recently ruling the e-commerce giant had threatened to withhold wages and benefits from employees at two New York warehouses.

UPS and its rivals

The UPS deal in August raised pay and eliminated a two-tier wage system for drivers at the Atlanta-based company. That bolstered organizing efforts among Amazon workers and put pressure on UPS rivals to close a growing gap in pay.

READ: UPS workers OK 5-year contract, capping contentious negotiations

When the new UPS agreement expires in 2028, the average full-time U.S. driver will make about $170,000 annually in pay and benefits, significantly more than peers employed by contractors for FedEx and Amazon.

Amazon in September gave delivery contractors $440 million for the year to raise average driver pay to an estimated $20.50 per hour. Amazon told Reuters that payment was part of normal increases and not influenced by the UPS contract. It did not provide prior-year comparisons.

“One thing we’ve seen in this economy is that workers are more likely to quit when they are unhappy,” said Kate Bronfenbrenner, director of labor education research at Cornell University. “Industries where they’re more likely to stay are the ones where they unionize and they stay and fight.”