General Motors workers went on strike this week in part to undo an agreement their union, the United Auto Workers, made nearly a decade ago to protect longtime workers at the expense of new ones. New hires at GM make only about half as much as longtime workers doing the same job.
Part of the union’s demands is for the automaker to give both groups of workers the same pay. On the UAW’s official list of demands, the demand is referred to as “A Defined Path to Permanent Seniority for Temps.” That means ending a system in which people hired after 2007 had to work at GM for eight years before they were paid at the same rate as the older workers. Currently, the base pay for those workers is $17 an hour. For older workers, it is $28.
The walkout began Monday morning after the existing contract expired. Talks between GM and union officials resumed Monday.
The two tiers were established in a 2007 contract as a concession when the automaker was struggling. That contract locked in the different tiers. The system allowed the automakers to constrain labor costs while allowing the union to protect its existing members. The newer hires represent only about 7% to 10% of GM’s workforce. The arrangement is not something the union is eager to elaborate on, though, having called for equal pay for equal work.
A subsequent 2015 contract created the eight-year system to get out of the situation in which new workers were paid at the much lower rates. Workers hired after 2007, however, still have a wage gap compared with those hired after 2007, according to the Center for Automotive Research. While senior hires have had two 3% pay raises since 2015, new hires have not gotten them.
Keeping the labor costs under control remains a goal of the company, GM spokesman David Barnas told the Washington Examiner. He cited “GM’s cost disadvantage from a manufacturing perspective versus its competitors who have nonunion assembly plants in the South. A big driver behind this is workforce composition.”
Overall, UAW’s membership is 395,000, according to Labor Department filings, down from 538,000 in 2007. Closures of plants and competition with foreign-owned nonunion plants, mainly located in the South, are believed to account for most losses. Workers hired at Detroit factories are automatic union members, due the terms of the UAW’s contract.
Protecting the union’s existing members has come at a cost, though, said Harley Shaiken, professor of research at University of California, Berkeley. “There is no sense of solidarity if you’re making $30 on the line and someone next to you is making $17,” Shaiken told the Detroit Free Press.
A UAW spokesperson did not respond to a request for comment.
