AFSCME 3357-HOF'S BLOG

My Predictions for the UAW Contract

 The UAW's bargaining with the Detroit 3 is in high gear right now. There are news stories saying that the UAW will be pressured to take no wage increase and others saying the UAW is going for a 10% signing bonus. I have some educated guesses on the outcome. This is an unusual environment right now. All three automakers are currently profitable, but the economy as a whole is sick with unemployment over 9%. This means that If the uses its strongest card, the strike, it is likely to face a significant backlash from the public for being greedy in a time of unemployment. On the other hand, the UAW has to justify its existence by using the collective bargaining process to obtain a tangible benefit. Added to the difficulties, the UAW has three diverse constituencies which have divergent objectives. First are the mainstream long term workers. They have seen their real earnings decline since the past contract due to give backs. Many of them have gone through transfers and relocations. They want to recover some or all of their lost purchasing power. The second group are the "Tier 2" workers. They only make about half of what the mainstream workers make. The Tier 2 workers cannot support families on their earnings, and they resent making half the wage of the people with whom they work side by side. Finally, there are the retirees. They don't have voting rights, but in the ballot, they are represented by the large number of soon-to-retire workers who share their stake in the outcome of the contract. The retirees are still steaming over decreased health coverage and higher deductibles that came with the last contract.

 Given these factors, here's where I think the bargain will be struck. The UAW will settle for a very small base wage increase, maybe only 1%, for the tier 1 (older) workers. All of the employees will get a significant signing bonus, but it will be well less than 10%, and the signing bonus will vary depending on the automaker with Ford getting the highest Bonus and Chrysler workers getting the lowest bonus. The tier 2 workers will come out with the biggest gain, probably narrowing the wage gap by as much as a half by the end of the contract. Fringe benefits will be little changed overall, with a cut in one place being balanced by an increase somewhere else. The retirees will get basically nothing. Feel free to put your two cents in the comments.