The UAW Strike Was a Success for Workers and Economic Democracy

The United Auto Workers (UAW) announced Monday that nearly two-thirds of its members voted to ratify contracts with the auto industry’s “Big 3”—General Motors, Ford, and Stellantis—following a historic six-week labor strike. The publicly released contract terms suggest that the strike was a success for both auto workers and the future of American economic democracy.

The new UAW labor contracts will provide workers with a 25 percent wage increase over the next four and half years, reinstated cost-of-living adjustments, increased employer 401(k) contributions, and higher starting wages. Prior to the strike, it took 21 years for UAW workers to see wages increase by 23 percent.

Along with improved wages, the contract will deepen economic democracy in America by protecting workers’ right to strike over future plant closures and abolishing the two-tier wage system that limited the pay of workers hired after 2007.

First, the UAW will have the credible threat of strike if auto manufacturers attempt to cut labor costs by shutting down union manufacturing plants and replacing them with non-unionized subcontracted plants. This contract provision fills a critical gap in the Inflation Reduction Act—the lack of guardrails to mandate the firms receiving subsidies prioritize the hiring of unionized workers. In effect, the UAW has made itself the de facto enforcer of centering unionized workers in the implementation of the IRA’s car manufacturing electrification mandate.

Secondly, adopting a single-tier wage system means that the collective bargaining agreement will have strong positive spillovers across manufacturing industries. Concessions enacted during the auto manufacturing industry’s financial crisis in 2008 created a two-tier wage system where newer workers would be unable to attain the wages afforded to more senior workers. This two-tier system meant that the benefits of a collective bargaining agreement would be concentrated among a small share of long-tenured workers. By eliminating the two-tier system, more workers will benefit from collectively bargained improvements in labor conditions, and the collective bargaining agreement will have greater influence in shaping the terms of employment for all workers in the industry. Recent reports suggest that the gains in the tentative agreement already led to wage increases in non-unionized Toyota plants.

The success of the UAW strike was driven by a sector-wide bargaining strategy never before employed by the UAW where the union leadership negotiated contracts and went on strike simultaneously across the American car manufacturing sector’s main three companies. This approach means that the UAW is serious about improving labor conditions—and increasing union employment—across the entire American automotive industry.

UAW President Shawn Fain has already called upon other American unions to align their contract expirations with UAW’s so that workers across employers and industries can benefit from collective worker power. If other unions take on the call, the American labor movement will continue its renaissance and strengthen worker power. In response to the tentative agreement, President Joe Biden signaled his support by stating that “worker power is critical to building an economy from the middle out and the bottom up—and so is economic growth.”