News & Commentary

November 24, 2015

Jon Weinberg

Jon Weinberg is a student at Harvard Law School.

Friday was a big day for the United Auto Workers, who ratified new four-year labor agreements with General Motors and Ford after previously reaching an agreement with Fiat Chrysler.  CNBC reports that the new agreement with General Motors was approved after an initial rejection by skilled trades workers.  The agreement “calls for raises for all workers and the end of the two-tiered pay system, although it will take a newly hired worker eight years to reach top pay rather than the three years it used to take before 2007.”  Meanwhile, the Detroit Free Press notes that Ford workers narrowly approved their agreement.  Per the report, “UAW production members voted 51% in favor; skilled trades were 52% in favor and almost 92% of salaried workers voted yes.”  With all of the “Big 3” automakers having new four-year agreements, labor peace is expected in the automobile industry for the foreseeable future.

The new agreements in the automobile industry could benefit workers in other industries across the country.  According to Bloomberg, the agreements have the potential to lift pay standards in the auto industry and broader labor market.  Since in the past decade senior auto workers have forgone raises and new auto workers have accepted lower wages, the once-significant auto worker wage premium in the labor market has almost disappeared.  Accordingly, the wage increases as part of “the autoworker agreements and their potential to ripple through the economy may help provide Fed officials with an extra bit of confidence that wage inflation pressures are building.”

On the other hand, the battle over labor representation at Volkswagen’s Chattanooga plant continues.  The Times Free Press  reports that an anti-union group criticized the actions of the Department of Labor in a letter sent ahead of a unionization vote.  The National Right to Work Defense Foundation accused the DOL of ignoring alleged labor law violations by the German union IG Metall, which is working with the United Auto Workers to unionize 164 maintenance workers.  The workers will vote on unionization in early December.

According to The New York Times, a new report by food conglomerate Nestle describes widespread labor and human rights abuses in the seafood industry in Thailand.  Per The Times, “the report cataloged deceptive recruitment practices, hazardous working conditions and violence on fishing boats and in processing factories.  It also faulted the industry for taking insufficient steps to ensure that workers were not underage.”  Furthermore, “workers sometimes went a year before receiving any wages, and some faced physical and verbal abuse if they did not meet production quotas.”

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