Charles Lipson: Of course Joe Biden backs the auto unions. His green policies made a strike inevitable Blue collar workers were once the backbone of the Democratic party. Now they’re its roadkill
https://www.telegraph.co.uk/news/2023/09/18/joe-biden-uaw-strike-electric-cars-esg-green/
As the clock turned 12:01am on Friday, the United Auto Workers (UAW) began their strike against Ford and General Motors. Not all union workers left the assembly line as part of the “rolling strike,” where some workers stay on the job (and earn their paychecks) while others walk the picket line. They’ll probably be picketing for a while: the union and the auto companies are still far apart on key demands.
Joe Biden has given the union his strong backing, proudly claiming he is the most pro-union president in history. He may well be, but the irony is that most of the union demands seek to undo the damage caused by his own policies.
All Americans, including autoworkers, have faced two consecutive years of falling incomes and spending-fuelled inflation under Biden – a loss the UAW wants to make up for under new contracts. The prospect of job losses from electric vehicles – directly tied to Biden’s aggressive environmental policies – has driven another key demand from the U. They want to protect their union jobs as the industry follows Biden’s mandates, shifts to EVs, and slices the number of hours needed to produce every car and truck.
Those demands would be hard for companies to meet under the best conditions. They are much harder because the administration’s massive, mandated disruption of the auto and truck market creates huge uncertainty for manufacturers. They simply don’t know if ordinary consumers will buy the more expensive EVs at the same pace they have bought gas powered ones. This uncertainly makes manufacturers even more reluctant than usual to offer pay hikes and job guarantees.
That’s not all the bad news for negotiators. Right now, traditional manufacturers are losing buckets of money on EVs. They are saddled with legacy costs and facilities and are forced to compete with a host of new firms without them, spearheaded by Elon Musk’s Tesla.
Biden’s green agenda aims to accelerate this transition to electric vehicles and take full credit for it. That agenda is built, like so many government programs, on subsidies and bureaucratic regulations rather than laws passed by elected representatives. The subsidies go to consumers, lowering their purchase cost, while the regulations are mandates that effectively eliminate all gas-and-diesel-powered vehicles over the next decade.
This green agenda is costly. But it is also central to the Democrats’ emerging coalition, which includes educated, upper-income voters worried about the environment and wealthy enough to pay more for cars. The losers are blue-collar workers and consumers with tight budgets hovering just above the poverty level, less able to bear the costs and more worried about their jobs. Once the backbone of the Democratic Party, they are now its roadkill.
Both “blue collars” and “Polo shirts” have steadily crossed party lines in opposite directions. How else could a blue-collar union state like West Virginia transform so swiftly from all-Democrat to all-Republican? How else could wealthy suburbs, once Republican strongholds, now consistently vote Democratic?
These changes go far beyond the auto industry and far beyond environmental politics. They are part of a tectonic realignment in American politics. Donald Trump capitalised on them, accelerated them, and consolidated them. But they began long before he descended the golden escalator and will continue long after he leaves the scene.
Union workers are pulled in both directions. They obviously want higher wages, guaranteed employment, and more retirement benefits. Who wouldn’t? They welcome the Democrats’ support for their contract demands. Their leaders and some rank-and-file members appreciate Democratic opposition to state right-to-work laws, which allow workers to choose whether or not to join a union at any plant.
Yet these same workers have benefited from Republican economic policies: lower taxes, less regulation, significantly less inflation, and much cheaper energy. They are attracted to Trump’s nationalism and protectionism. And they agree with many Republican cultural policies and ideological stances, even as educated, upper-middle-class voters are repelled by them.
Auto workers are hardly alone in suffering from rising prices and lower real wages. Recent figures released by the Census Bureau reports that median real income in 2019 was $78,250. In 2021, the first year of the Biden administration, it had fallen to $76,300. While much of that year’s loss was due to Covid, the decline continued after Covid restrictions disappeared in 2022. Median real income that year dropped another $2000.
These dismal figures, plus the uncertainty caused by inflation, are driving Joe Biden’s low approval on economic issues and much of his overall decline in popularity. Voters know they are appreciably worse off since he took office. They see it when they shop for groceries and clothes, fill up at the pump, or pay monthly bills for heating or air conditioning. If that’s what “Bidenomics” means, they are saying “no más.”
The unexpected rise in consumer prices hit autoworkers hard because their long-term contacts did not include protection against inflation. They gave up their “Cost of Living” (COLA) raises in 2007, having demanded them during the high-inflation years under Gerald Ford and Jimmy Carter. Once inflation had been tamed (under Reagan), losing COLA wasn’t a big deal. The union could simply include the expected annual inflation of 2 per cent or 3 per cent as part of its standard wage bargain.
What they did not expect was surging inflation. That’s exactly what hit them, thanks to massive government spending during the Covid outbreak, followed by Biden’s profligate spending after the pandemic ebbed. The results are being felt in every industry and every household, not helped by the sharp pinch of rising interest rates imposed by the Federal Reserve to get inflation back under 2 per cent.
The union’s demands are understandable. So is the auto makers’ resistance. Companies never want to bear higher costs. They are even more reluctant when their industry is changing rapidly and each company faces an uncertain future and a potentially unprofitable one.
This economic logic leaves a wide gap between the companies and the union. No one knows how they will bridge it, how long the strike will last, when the Biden administration will feel the mounting political costs and begin ratcheting up pressure for a settlement, or which side will come out better in the final agreement.
What we do know is that President Biden’s full-throated support for the unions is drowning in irony. He is offering the striking workers his strong backing… so they can cope with problems he created.
Comments are closed.
