When their existing labor contract expired at midnight on Thursday, the United Auto Workers (UAW) initiated a strike against Detroit’s Big Three automakers. The main sticking point in the contentious negotiations between the UAW and Ford, General Motors, and Stellantis (formerly Fiat Chrysler) has been pay.
The UAW believes its members deserve substantial raises, especially considering that the auto companies have generated billions of dollars in profit and increased CEO compensation in recent years, according to UAW President Shawn Fain.
What is the average wage of a U.S. autoworker?
Typically, factory workers are paid an hourly wage rather than a salary. Based on data from the Bureau of Labor Statistics, U.S. autoworkers on manufacturing production lines earned an average of $28 per hour in August, a $1 increase from the previous year.
The individual pay of autoworkers varies depending on their tenure at a particular car manufacturer. Under the industry’s tiered wage system, newer hires start at lower rates of pay compared to those with longer tenures.
According to contract summaries for the Big Three, top-tier workers—defined as those who joined the company before 2007—earn an average of approximately $33 per hour. On the other hand, lower-tier workers, hired after 2007, earn up to $17 per hour, with a 6% annual increase rate based on the previous contract.
Unlike top-tier employees, lower-tier workers do not receive defined benefit pensions and generally have less generous health benefits. UAW members are calling for the elimination of the two-tiered pay system, arguing that it creates an unfair distinction between coworkers.
Adam Hersh, a senior economist at the Economic Policy Institute, revealed that when adjusted for inflation, autoworkers have experienced a 19.3% decrease in average wages since 2008. The concessions made by autoworkers after the 2008 auto industry crisis, including the suspension of cost-of-living adjustments, were never reinstated.
How much do the CEOs of the Big Three automakers earn?
According to reports, Ford CEO Jim Farley received a total compensation of $21 million last year, while Stellantis CEO Carlos Tavares made $24.8 million, and GM CEO Mary Barras accumulated nearly $29 million in pay during 2022. Over the period from 2013 to 2022, overall CEO pay at the Big Three companies rose by 40%, as per the Economic Policy Institute.
The salary disparity between the CEOs and the average workers is significant. Barras earns about 362 times more than the typical GM worker, Tavares makes 365 times more, and Farley at Ford earns 281 times more, according to SEC filings.
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