Business reporting on labor unions tends to focus on speculation about how much striking workers might hurt the economy. But the reality is that successful strikes have a long-term positive impact on economic growth because they raise wages for all workers. Economist and researcher Kate Bahn, Director of Research from WorkRise argues that strikes, especially historic strikes such as the recent UAW strike, benefit both unionized and non-union workers, and have much broader ripple effects across the whole economy because they increase worker power and competition for workers across various sectors and industries.
Kate Bahn is an economist and researcher, currently serving as the Director of Research for WorkRise, a research-to-action network hosted by the Urban Institute. Bahn’s expertise lies in labor markets, gender economics, and income inequality. She has conducted extensive research on topics such as the gender wage gap, paid family leave, and the impact of automation on employment. Bahn’s work combines rigorous analysis with a commitment to addressing the needs and challenges faced by marginalized communities.
Twitter: @LipstickEcon
How the UAW strike might benefit all workers: https://www.cnn.com/2023/09/15/opinions/union-member-negotiations-uaw-pay-bahn/index.html
Labor unions are good for workers, and here’s why they also make good business sense: https://www.marketwatch.com/story/labor-unions-are-good-for-workers-and-heres-why-they-also-make-good-business-sense-a39f3697
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Kate Bahn:
Profits, and particularly shareholder profits, are really wasteful economic activity, and so clawing that back is not just to stick it to them, but that’s actually better for the whole economy.
Nick Hanauer:
The story of the economy through the neoliberal era has been the shift from wages to profits.
David Goldstein:
Employers don’t pay you what you’re worth. They pay you what you can negotiate.
Nick Hanauer:
That’s right.
David Goldstein:
We saw a great example of that recently in the American economy.
Nick Hanauer:
Yes, we did, the UAW strike.
Announcer:
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Nick Hanauer:
I’m Nick Hanauer, founder of Civic Ventures.
David Goldstein:
I’m David Goldstein, senior fellow at Civic Ventures. One of the things you like to say, Nick, is employers don’t pay you what you’re worth. They pay you what you can negotiate.
Nick Hanauer:
That’s right.
David Goldstein:
We saw a great example of that recently in the American economy.
Nick Hanauer:
Yes, we did. The UAW strike was probably the best example of that that we’ve seen, I guess, in a really long time.
David Goldstein:
Yeah, big, big wins for autoworkers recently.
Nick Hanauer:
Yeah.
David Goldstein:
It’s funny, because when it started, there was a lot of criticism. “Oh, they’re asking for too much. They’re reaching too far,” but they really won most of their main objectives.
Nick Hanauer:
Yeah, that’s right, yeah. They deserve to because profits at the auto companies have gone sky high as wages have either gone down or flattened. I think it’s really exciting what they accomplished and probably will have a positive effect on other sectors and other workers.
David Goldstein:
And a great example to workers in other sectors who are either looking to organize or who are already unionized and looking to strike that there are gains to be out there and concessions to be reversed and opportunities to be won.
Nick Hanauer:
Absolutely. Today, we get to talk to somebody who’s an expert in all of this. Kate Bahn, an economist and researcher, serves as director of research for WorkRise, which is an action network hosted by the Urban Institute. Has studied these relationships, labor and business, and has followed this very, very carefully. With that, Goldie, I think we should talk to Kate.
Kate Bahn:
Hi, I am Kate Bahn. I’m a labor economist and research director at WorkRise, which is a research-to-action network hosted by the Urban Institute. People can check out our blog, Working Knowledge, on workrisenetwork org.
Nick Hanauer:
Well, Kate, thank you so much for joining us. It sounds like you have been deeply involved in the UAW strike and wrote about it in a recent CNN op-ed. Tell us about how you’ve been following this, and just tell our listeners about what you’re thinking.
Kate Bahn:
It’s really exciting to follow. I know a lot of folks listening to your show are probably already pretty aware that the big three automakers, GM, Ford, and Stellantis, went on strike this past fall and had big wins in their contract. But taking a step back, my interest in it and how much I’m following it is part of this bigger economic context of rising income inequality, declining labor share of value, these sort of big long-term labor market trends that have been really bad for workers and what this strike, and particularly the success of the strike, represents in pushing back against those long trends and perhaps moving the other direction.
Nick Hanauer:
Just because not everybody followed it carefully, just give us the 60-second version about what happened and what the outcome was.
Kate Bahn:
The UAW was up for contract renewal with the big three automakers in the US, which are GM, Ford, and Stellantis.
Nick Hanauer:
Stellantis representing who, just so everyone knows?
Kate Bahn:
Chrysler. That’s a good… Sorry, sorry about that. [inaudible 00:04:20] Chrysler.
Nick Hanauer:
No problem.
Kate Bahn:
That’s pretty key. That’s a good example of how I’m too into the weeds, that I’m using these other names. I think the UAW leveraged a really key economic moment of the labor market being quite tight and very healthy and workers facing a lot of job openings elsewhere. Because of that, they were able to ask for really strong demands in this contract.
When those demands were not taken seriously by the big three automakers, what they then started was a strike, and in particular, a rolling series of strikes, which was a really cool tactic that Shawn Fain, the president of the UAW, undertook where different auto plants would go on strike at different times. It’s really left those companies in a place where they could not necessarily predict where there would be work stoppages on what timeline. That ended up really putting them there on their heels facing the UAW. Through this strike, they were able to secure some really significant gains in their contracts.
Ford and Stellantis reached deals sooner, and then GM was the final one to reach deals. What they had were things like big wage increases. They tend to be at the top of the scale around 27% to 30% over the life of the contract. But other really key factors there were things like raising the wages a huge amounts of the lower paid workers, particularly like temp workers. So they have no more tiered employment, which is a tactic that happened, particularly for UAW workers but sort of broadly through the Great Recession, when there was a union contract, the proposal for the company would be, “How about we give benefits to the long-term employees, but we don’t to the more recent employees?” That set up this tier that really, really gutted union’s power. They reversed that. There’s no more tiered contract. There’s a shorter timeline to get to the top wage band. A big piece of this contract was cost of living adjustments. So as inflation goes up and the cost of living goes up, workers wages go up alongside it.
Nick Hanauer:
Automatically.
Kate Bahn:
Then the last thing I’ll say… Automatically, which is huge. We could talk about that more and we probably should talk about that more. But the last thing I’ll say too is it also includes new production facilities, in particular, operating battery cell manufacturing facilities will be covered under the UAW contract. So far, that includes Ultium Cells, who has one plant that is jointly operated with GM, and they’re opening two more plants soon. So that is not only just bringing benefits to the UAW members that already exist, but expanding UAW coverage when the auto sector itself changes.
Nick Hanauer:
Great.
David Goldstein:
This is really big because whatever bumps are in the way, this shift to electric vehicles is real and it’s happening, and there’s nothing that really can stop it over the next decade.
Kate Bahn:
Exactly. There’s a lot of things about this contract. One of the reasons I’m so excited about it is, in a lot of ways, it feels like union contracts and labor law generally is sort of stuck in the past, and that has made it hard for unions to make big gains. This contract was very forward-looking, both to new sectors where there is growth and then also to be able to account for upcoming economic conditions. I think that’s going to be pretty big.
David Goldstein:
It’s interesting you say that, because when I looked at it, again, this is not my area of expertise, but what I saw was reversing a lot of the concessions the autoworkers made in the wake of the Great Recession, the financial collapse that was devastating. It’s particularly the multi-tiered wage structure, which is a tactic that has been used to destroy unions for a couple decades.
Kate Bahn:
Yeah.
David Goldstein:
But it’s more than that. It’s more than just winning back these concessions. It’s structured with an eye towards the future.
Kate Bahn:
I think that’s true. I think winning back the concessions is obviously very important because it expands the coverage and the benefits of unionization. But I think making sure that when these companies engage in new types of activities, like electric vehicles, that’s part of it, and the cost of living adjustment, which I believe they did have in historic contracts. But again, I think that that does help it at least navigate the future.
David Goldstein:
How about hours per week?
Kate Bahn:
One piece that they did not win, and this is the subject of my CNN piece, is they did not win the four-day work week that was a demand of theirs. That being said, I think that was a really bold demand, and it was exciting that they demanded it. I think that demonstrates their power that they even asked for it, but they did not get a four-day work week. The four-day work week, it’s exciting that it was even on the table, so I don’t want to diminish the fact that they didn’t get it.
But what we know about manufacturing is that they have really, really long work hours, so manufacturing workers have higher average work hours than other workers across the entire country. They work over 40 hours a week, where most other workers are working a low 30 hours a week on average. So at least what this does, while they may not be going to the four-day work week, it at least helps those workers because it has raised wages so significantly that they don’t necessarily have to take on as much overtime and face overwork that way. They’re less likely to take on dual job holding. So there are still benefits despite not having won that four-day workweek.
Nick Hanauer:
Yeah, great.
David Goldstein:
You mentioned earlier that the UAW took advantage of our historically tight labor markets right now to help win these gains. We’re also in a period the past couple of years of rising popular support for unions, something which we haven’t seen in quite some time. How much of it was public opinion that helped them win? Because certainly the coverage of the strike was pretty positive.
Kate Bahn:
I’m sure that it plays a role. It can’t be the only thing. But you’re right, two thirds of Americans say they support unions. That is the highest it’s been since the 1960s. The first time an active president has ever visited a strike. Those are pretty big. I’m sure that plays a role on these companies, the pressure. Another thing to keep in mind here is that they were saying they couldn’t afford these concessions to the workers while they were also bragging about their historic profits on earnings calls, which I think is a trend we’ve seen. Generally speaking, we know that there’s really high profits. So I think that public pressure, how bad it looks that people are supporting unions probably did play a role in those companies giving into the union demands. But the biggest factor was, of course, striking and just making it so they couldn’t operate their business.
Nick Hanauer:
Kate, I don’t mean to put you on the spot here with a numbers question that we didn’t prepare you for. How much of their profit did the automakers give up in order to deliver these concessions? It’s a de minimis amount, isn’t it?
Kate Bahn:
I don’t remember the exact amount, but you’re right. I think automakers have been making really high profits. It tends to be a little bit volatile when I was looking at the numbers, but it’s still quite high in the billions. I think the key part here, too, is that there’s nothing about capitalism that says that companies deserve to make extreme profits. In fact, mainstream economic theory says that profits should be pretty minimal. They’re basically just the wages of capital. Anything above that is wasteful economic activity because otherwise that money should be spent in workers’ pockets, which they spend in the economy. It should be spent investing in new things. So profits, and particularly shareholder profits, are really wasteful economic activity. So clawing that back is not just to stick it to them, but that’s actually better for the whole economy.
Nick Hanauer:
Yeah, for sure. The story of the economy through the neoliberal era has been the shift from wages to profits in the country, right? The last numbers I saw was that wages used to be something like 52% of GDP, and now it’s like 46% or 45%. Profits used to be 5% or 6% of GDP. Now it’s 11% or 12%.
Kate Bahn:
Exactly.
Nick Hanauer:
Whatever it is, that trillion and a half dollars of profits doesn’t need to be profits or have to be profits. It’s profits because powerful people prefer it to be profits, right?
Kate Bahn:
Exactly. The technical term is the declining labor share of income, which is not very interesting sounding. But that’s not good for the economy, broadly speaking, to have a declining labor share of income.
Nick Hanauer:
The other thing that you argued in your CNN piece was that this contract was good for all workers. Can you reflect on that?
Kate Bahn:
I think there’s a lot of research that shows that there is a big union spillover effect. Part of what I argued in that piece is that clawing back the ability of companies to make those outside profits, force the workers to work really long hours versus that big trend of the declining labor share of income. But it’s even more than that, too.
We know from good research that unions have big positive wage spillovers. For example, there’s research by Patrick Denice and Jake Rosenfeld where they look at how much the decline of unionization has impacted wages overall. They do good research where they account for everything else you can account for. They’re saying this is not just about changes in skills demand. This is not just about the decline of manufacturing in the US. This is not about competition. It is just the sheer fact that unions have declined is part of why non-union workers make even less now. Especially probably in those places, those localities that have a big auto manufacturing presence like Detroit, this will increase the wages of other employers because they have to compete.
The benefits don’t just end there. Another paper I really like is by Paul Frymer and Jake Grumbach finding that unions reduce racial resentment among their members. So what happens is white union members are much less likely to express racial resentment. When white workers join a union, they’re less likely to express racial resentment. Then that lasts even after they’re no longer a union member. So just the presence of unions, people cycling in out of union jobs can reduce that racial resentment, and that can lead to real impacts for people. Those white union members or white former union members are more likely to say that they support policies like affirmative action or other policies that are specifically designed to help Black Americans.
David Goldstein:
We saw this impact on non-union workers pretty directly in the rest of the auto industry. In the weeks following these contracts, these non-union automakers announced a series of wage hikes.
Kate Bahn:
Yeah, exactly.
David Goldstein:
I know that UAW has announced big plans for organizing these non-union plants. Did these raise hikes? Were those preemptive? Did they head off this organizing, or do you think there’s still a shot for the UAW to spread to some of these other manufacturers?
Kate Bahn:
Well, I’m glad those workers have those increases, and I do think that was likely part of the intent was probably to stave off unionization. It might also just be to be able to recruit workers. It’s harder to recruit workers if there’s another union option. I’m not a political scientist, but I would say given the rhetoric of the UAW, particularly their president, Shawn Fain, I don’t think they’re planning on backing off. I think they are planning on still going harder. On the other side of it, there’s lots of evidence that shows that unions aren’t necessarily bad for companies. So now we’re in a place where it might be easier for the UAW to potentially organize because they could say, “Our master agreement is now closer to the wage levels you’re offering. It’s not a big change in how you operate your business because you’ve already preemptively raised those levels.” So there could be a benefit to it as well. It could make it easier to unionize.
David Goldstein:
Is this a model for labor in general, or is there something unique about the auto industry?
Kate Bahn:
I do think this is a really good thing. My concern is looking at broader business structures across the economy and where else we see union activity. Are those places similar to UAW? Can they leverage the same types of tools that the UAW can? I think that could be a little bit harder because UAW workers tend to be direct employers of large corporations. So when we think about other types of jobs that there’s been activity, it’s maybe independent contractors who aren’t direct employees. It could be at franchise establishments so the bargaining would not be directly with the big company but the franchise owner or really small diffuse workplaces, like all that. Starbucks organizing, which is really exciting. Obviously, a huge number of wins through the National Labor Relations Board to have union representation, but they’re really small, diffuse workplaces, and that makes the UAW tactics a little bit harder to leverage.
Nick Hanauer:
One of the things, I guess, you wish is that when the UAW did these concessions during hard times, there would’ve been a clause that said, “And when the good times come back, we claw all this stuff back.” But apparently that wasn’t negotiated. It feels like you want to write a contract so that the better the company does, the better everybody does and for the long term-
Kate Bahn:
Yeah, yeah.
Nick Hanauer:
… where you don’t have to renegotiate this every three years or five years or whatever it is. If the company does better, then that betterness is shared in a reasonable way so that you don’t have strikes and you don’t have people pissed off.
David Goldstein:
Well, but Nick, how are you going to share profits with workers when you need to share them with shareholders?
Nick Hanauer:
Yeah. Well, that is the problem, I guess, but [inaudible 00:18:00].
David Goldstein:
I mean, those stock buybacks don’t grow on trees. They come-
Nick Hanauer:
That’s true.
David Goldstein:
… at a cost, Nick.
Nick Hanauer:
That’s true. But do you think there’s any hope for those kinds of arrangements?
Kate Bahn:
I think there is other types of ways to give workers that power. It was not necessarily part of this UAW contract, but I think it’s become more of the discussion, at least in the US labor policy. Those are things like co-determination, so that would be putting workers on the boards of these organizations. So when we talk about stock buyback plans, what that looks like, how companies are thinking about what to do with their profits, if you have worker representation on boards, that’s one way to affect those changes. So that is one way to do that. I’m also really interested in wage boards. That’s maybe not necessarily a union contract per se, but that is where we have things, like in California in the fast food sector, where we have worker representatives, employer representative, and then also government representatives who are able to look at the bigger picture of what’s going on in a whole sector, what’s going on in the whole labor market and setting wages based on that rather than it just being bargaining one-off every three to four years at a table between an employer and worker representatives.
David Goldstein:
In a way, isn’t a UIW contract a kind of sectoral bargaining in that you settle with Ford and everybody else has to follow suit? That’s the way they used to run these strikes. They’d strike against one automaker and then get their contract, and everybody else would follow. It seems it’d be more efficient just to skip the strikes entirely and go to some sort of wage board for the industry.
Kate Bahn:
It probably would be more efficient. I think there’s still something about a strike that is a way for workers to really leverage their power. In my perspective, I think it’s not a question of getting rid of the strike, but maybe minimizing the length of it, having them have them less often. But it’s definitely something that needs to exist as a tool in the toolbox.
But I think you’re right. So when we take something like these big three automakers, they’re called the Big Three, their [inaudible 00:20:05] title denotes that they are a big part of the market in the US. So when you have an agreement with the three of them that are pretty similar, some differences, that essentially becomes a sector-wide agreement. This happens in a couple other places that are similar. I used to work for the union SEIU Local 32BJ, which is a building services union. In New York City, it’s sort of similar. There’s a couple really big companies, maybe four of them, and they negotiate for a master agreement. They have one representative called the Real Estate Advisory Board that negotiates a master agreement with the union, and that master agreement, the big companies take on, and then maybe there’s a couple small riders when smaller companies join that master agreement. But in essence, it is a sectoral bargaining model, and I think the UAW is kind of similar.
David Goldstein:
It works that way with supermarkets in the grocery industry with the unionized supermarkets thing. One chain will sign the contract and the other one will follow.
Kate Bahn:
Yeah, yeah, it can be that. I like the model with 32BJ in New York because they have an employer representative that negotiates on behalf of multiple employers. So when you have multi-employer bargaining, that, I think, is a very strong way to get worker benefits across the sector and then also show us that sectoral bargaining works in the United States. The United States is unique to really focus on this typically establishment-level bargaining. That’s not how it has to be. It’s not something about collective bargaining that has to be done that way. It’s certainly done differently in different countries, and I think this at least shows that it is possible to do that in the United States.
Nick Hanauer:
How can policy makers encourage more of this and support more of this?
Kate Bahn:
That’s a key question. I think we also know that it’s not just worker collective action. We actually need institutional support for it to be effective. The current makeup of labor law and how a lot of it is enforced is not that helpful to workers. The sort of gold standard would be something like passing the PRO Act, which is the Protecting the Right to Organize Act. That has a whole suite of policies to make it easier for workers to unionize.
I think when we think about smaller scale or easier-to-lift ways to help workers unionize, I think there’s still room for the NLRB to do things like stop captive audience meetings, so those meetings where workers are compelled to sit in a meeting and hear anti-union propaganda. So I think there’s some small marginal ways that we can support the right for workers to organize through cracking down on union busting, through protecting workers from retaliation. But broadly speaking, I think if we want an environment where institutions support workers’ ability to organize a union if they want to, it’s going to have to be a big overhaul of how we do it through the PRO Act. That’s where I feel a little more pessimistic than I’d like to be because I know that it is hard to pass big sweeping legislation right now.
David Goldstein:
It’s hard to pass little insignificant legislation right now.
Nick Hanauer:
Yeah, yeah.
Kate Bahn:
Yeah.
Nick Hanauer:
Kate, a couple of final questions. First, the benevolent dictator question. If you were in charge of policy, what would you do? How would you make all of this better?
David Goldstein:
No political constraints.
Kate Bahn:
The big picture, if I could just wave a wand and pass the PRO Act, that would be part of it. I think that’d be a big one. If it was simpler things, not this big huge bill, it might be repeal Taft-Hartley, which was that 1947 law that made it harder for workers to organize. I do think that it was prescient law. It really paved the way for declining unionization, even as early as 1947. I would get rid of that. I would raise NLRB fine and fees. There’s evidence that shows that companies just don’t have any incentive to comply with the National Labor Relations Act because the fees are so low. So even if you get caught, why not break the law because it’s so low?
Nick Hanauer:
Do the fines and fees have to be changed legislatively?
Kate Bahn:
They do, yeah. For both the National Labor Relations Act and the Fair Labor Standards Act, fines and fees have to be changed legislatively. That’s a piece of the PRO Act. Then the final thing I think I would do is having “just cause” employment in the country. That would say that employers have to have a justifiable reason to fire workers. Right now, what we have is “at-will” employment. Employers can fire you at any time for any reason other than some legally protected reasons. Like, they can’t fire you if you have a baby or if you’re a Black worker. But if we had just cause employment, that protects workers against retaliation, and I think that’s huge. If you can’t retaliate against workers when they organize or they engage in collective action, that really emboldens and protects those workers so that they can do that, and they can ask for what they deserve.
Nick Hanauer:
Fabulous. One final question, why do you do this work?
Kate Bahn:
That’s a great question. I have a long origin story about how I started doing this work. But I think it really comes down to when I started studying economics in college, it was clear to me people’s jobs, their work is a fundamental way that they engage in the broader world. It’s how they support themselves. It’s how they support their families. It’s a big part of their social life and their wellbeing. It just seems like making jobs better is a key to making people’s whole lives better. So upon that realization at age 19, I thought I want to work as an economist for labor, and I’ve been doing that for 20 years now.
Nick Hanauer:
Good for you.
David Goldstein:
That’s a great answer.
Nick Hanauer:
Thank you for coming on, Kate.
Kate Bahn:
Thank you so much for reaching out to me about this. It was exciting to talk about.
Nick Hanauer:
Well, that conversation, Goldie just really centers this whole fundamental problem in the American economy, this shift of money from working people to profits and owners of capital that’s occurred, that we’ve characterized gabillion different ways: the $50 trillion transfer of income from the bottom 90% to the top 1%, it’s two and a half trillion dollars a year; the decline of labor as a percentage of GDP in the ’50s to in the ’40s that’s accomplished as the percent of profits has largely doubled. Again, what’s, I think, really important for people to recognize is that there is no reason for that other than it’s the preference of the powerful, right?
David Goldstein:
Right.
Nick Hanauer:
Corporate profits make a certain group of people very, very happy. They make Wall Street very happy, and they make the owners of the businesses and the executives at the top of the businesses very happy. But they are not generally better for the economy overall. They’re not a sign of increasing efficiency. They’re not a sign of forward progress. They’re not a sign of better products. They’re not a sign of a better economy. All they are is just a sign that the people at the top have more power and the people at the bottom have less.
David Goldstein:
And you see this, and it’s really fascinating with this strike how easy it was in the end for the automakers to cave, not just the unionized autoworkers, but the non-unionized autoworkers, the foreign manufacturers, who have plants here, who immediately followed suit after the strike was settled by raising wages for their workers without a strike. What it showed you was that the current low-wage structure that we’ve built up over the past few decades was not some sort of objective economic reality. Like, “Oh no, we just can’t afford to pay workers this much anymore.” They could have afforded to pay them more all the time and just chose not to.
Nick Hanauer:
Right, of course, not to. Right, exactly.
David Goldstein:
What’s important here, and I think Kate brought this out a couple times, is that there is a long history to this. We know that as unionization in the United States has declined so did wage growth. Wage growth slowed as unionization declined. We saw this decline over the past 40 years from about 20% of private sector workers to about 8% of private sector workers. That correlates exactly with this wage stagnation of the neoliberal era. And none of this was an accident.
She brought up Taft-Hartley, and we didn’t go into what it is. At its core, Taft-Hartley, which was passed with that Republican Congress during the Truman administration, it was a big FU to the New Deal. That’s what it was supposed to be. This is what allowed for states to adopt so-called “right-to-work” legislation. What right-to-work means is, oh, if your employer is represented by a union, you get all the benefits of being a union worker, but you don’t have to pay union dues. It’s an anti-social act that allows people to selfishly opt out, to not participate in the union, to not pay their dues while still benefiting from it. What that does is it weakens the ability of unions to organize. So where so-called right-to-work is passed, and if you are an employee in a union workplace, you don’t have to pay dues to the union to help support those negotiations? What that does is it undermines unions, always, everywhere, really effectively.
It was intentional at the time. She mentioned that it was far-seeing. It was part of a multi-decade plan to undermine organized labor in the United States, and it worked. We started to see the decline in unionization not long after that as state after state, particularly in the South, mostly in the South, mostly in the old Confederacy, adopted right-to-work legislation. That’s why you had these unionized plants in places like Michigan and these non-unionized plants, it’s where the foreign manufacturers go into the South, into these right-to-work states where they don’t have to have union workers. It’s really exciting to see a contract like the one we had, a strike, like the one we had with UAW, not just win new contracts for unionized workers but win significantly higher wages. In some cases, we’re talking about 30% increases for non-unionized autoworkers. It’s a big reversal and a big step towards reversing this upward redistribution of wealth and income we’ve seen over the past 40, 45 years.
Nick Hanauer:
No, you’re absolutely right, Goldie. At the end of the day, if we want to have an economy where everyone benefits, we’re going to have to straighten all this stuff out. It just has to be addressed, [inaudible 00:30:47].
David Goldstein:
Again, that lesson, your words of wisdom that I mentioned at the top, that employers don’t pay you what you’re worth, they pay you what you can negotiate, there’s a corollary to that, which we’ve seen again and again, which is employers don’t pay you what they can afford to pay you. They pay you what you negotiate. It was very easy for the automakers to sign this contract, maintain high profits. I haven’t seen any of them announcing that they’re cutting their stock buyback plans after signing this contract. We also don’t see, “Oh, it’s just going to drive inflation.” In a competitive market, maybe profits will go down a little bit. That’s what it means to have an efficient market, by the way. If we believed in markets, the profits wouldn’t be this high.
Nick Hanauer:
That’s right.
David Goldstein:
It’s obviously an uncompetitive market when they’re able to maintain profits at this high level for so long.
Nick Hanauer:
That’s right.
David Goldstein:
So markets at work here. Again, once again, we’re more pro-market than the so-called-
Nick Hanauer:
The free marketers.
David Goldstein:
… yeah, free marketeers. If you want to read more from Kate, we will provide some links in the show notes.
Announcer:
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