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By Julianne Malveaux —

The United Auto Workers and the Big Three automobile manufacturers – Ford, General Motors, and Stellantis haven’t been able to come to agreement about worker compensation, and no wonder. The UAW leader, Shawn Fein, is fiercely committed that workers should be better compensated, and should recoup some of the concessions they made to manufacturers when the automobile industry was in trouble in 2009.  On the other side, the CEOs of the big three are touting their “generous” offer to the union, claiming they’d be bankrupt if they met union demands, and using terms like “class warfare” to describe the current stalemate.

CNBC anchor Jim Cramer was among the first mention class warfare when the UAW offered a set of reasonable demands. He fails to understand that when CEOs make hundreds of times more than the average worker, there is indeed, some kind of warfare. Predatory capitalists are extracting surplus value from workers and directing to shareholders, and also to themselves. Thus, the Ford GM Mary Barras, earns more than $30 million a year, 362 times the earning of the average worker. Stellantis CEO Carlos Tavares earns more than $24.8 million, 365 times what the average worker earns.  And Ford’s James Farley earns $21 million, 281 times as much as the average worker. Mary Barras defended her high salary by indicating that her pay is “performance based”. She would not have performance were it not for worker productivity, but there is a gap between worker pay and worker productivity. Predatory capitalists are capturing the benefits of both worker productivity and worker concessions, resulting in record profits among auto manufacturers.  President Joe Biden was spot on when he said that record profits ought to mean record contracts. In other words, just pay the people whose labor contributed to the record profits.

While the Big Three CEOs saw their compensation rise by at least 40 percent in the last four years, they’d deny similar pay increases to their workers. Indeed, the average auto worker earns $28 and hour, just a dollar, or less than four percent, more than last year. Those who were hired before 2007 earn $33 an hour, but those hired after 2007 make only $17 an hour, the two-tier compensation that the UAW is fighting to eliminate. How fair is it that two workers, standing side by side have such a pay differential, one earning about half of what the other is earning. That’s called worker exploitation. The UAW agreed to it under exigent circumstances, and those circumstances don’t exist anymore. By the way, the lower paid workers also get fewer health and pension benefits, and the union proposal is partly about equalizing some of these benefits. The quest for fairness is something that CNBC’s Cramer describes as “frightening”.

What is frightening is the increasing poverty in our nation. It’s frightening that predatory capitalists are getting away with extreme exploitation. It is frightening that CEOs make so much compared to labor, and that they find nothing wrong with this. And it is empowering to see UAW President Shawn Fein fight fearlessly for workers in the face of CEOs that whine about a bankruptcy that won’t happen unless they figure out a way to cut a deal with labor.

If they don’t come to an agreement, the consequences can be dire. If the 150,000 workers in the UAW all strike at the same time, the union has enough in the strike fund to keep them out for three months.  Meanwhile, the auto industry may loose more than $5 billion and a strike may push the economy to the brink of a recession. Auto workers aren’t the only ones at risk.  Those who supply auto manufacturers with parts will probably have to lay workers off, if auto manufacturing slows. There may be fewer automobiles available, and the fourth quarter is often a time when car sales go up.  Fewer cars may also mean inflationary increases in automobile prices.  If all auto workers go out at the same time, it will be catastrophic for the economy.  Even if fractions go out, as 12,000 did on Friday, September 15, it will be disruptive for the economy.

The auto strike emboldens other workers to stand up for themselves.  Kaiser employees will strike by the end of this month if they can’t come to agreement with management. Others are considering strikes, and labor unrest is at an all time high.  Workers just want to be paid fairly.  That’s not class warfare, that’s survival. To the extent that predatory capitalist resist paying fairly, there has always been class warfare.

Dr. Julianne Malveaux

Dr. Julianne Malveaux is a member of the National African American Reparations Commission (NAARC), an economist, author and Dean of the College of Ethnic Studies at California State University at Los Angeles.