On September 15, more than 12,000 autoworkers from the United Autoworkers Union (UAW) walked off the job as contract negotiations with Ford, GM, and Jeep-maker Stellan.
On September 15, more than 12,000 autoworkers from the United Autoworkers Union (UAW) walked off the job as contract negotiations with Ford, GM, and Jeep-maker Stellantis have yet to produce a new contract for the 146,000 active union members at the three companies. UAW workers’ pay has increased just 6% since 2019, while the union cites a 40% jump in automotive CEO compensation from the Big 3 Detroit automakers. The UAW is therefore seeking a similar 36% pay increase over the next four years for its members, along with the return of pensions and other cost of living adjustments. While the automakers dispute the 40% figure, which is magnified by stock grants, there is no denying that the gap between executive compensation and rank-and-file wages has grown to a historically large differential.
In 1965, the CEOs from the largest 350 publicly traded companies outearned their median employee 15-to-1. Today, S&P 500 CEO pay is 186 times the median employee compensation. Meanwhile, GM’s CEO May Barra’s compensation amounts to 362 times the median GM employee’s annual wages, while Ford’s CEO James Farley earned more than 281 times the typical Ford autoworker. With the median US autoworker needing to work several lifetimes just to equal one year of CEO compensation, the UAW is pointing to the growing income inequality in the US and the decline of middle-class manufacturing jobs which can no longer support families on a single income.
The counterargument from the automotive industry is that CEO compensation is a relatively small budget item, and lower worker pay is needed to be competitive on the global market. To their point, workers at the 3 Detroit automakers make around $60 an hour including benefits, while non-union Tesla TSLA and foreign-based manufacturers with US factories pay around $45 an hour.
