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UAW, Unifor talks likely to include demands for big raises


The tight labor market in the Southeast has already forced many international automakers to dramatically boost wages. Volkswagen, for example, said the starting wage at its Chattanooga Assembly complex is now $21.50 an hour — it was $14.50 an hour when that factory opened in 2011 — and VW says it is still having trouble finding sufficient workers. Other nonunionized automakers have upped their compensation packages as well, and find themselves competing for workers with fast food franchises struggling to keep their own doors open. The result of all these economic pressures has been to erase much of the wage advantage that the Southeast long enjoyed over the more heavily unionized Midwest.

Ironically, the four-year UAW contracts that the Detroit 3 signed in 2019, which set starting hourly wages at about $17, have acted to shield those automakers from some of the wage inflation roiling their international counterparts.

But that shield is unlikely to survive when talks begin on the new labor agreements with the UAW next year. And as nonunionized automakers have discovered, the economic pressure on starting wage rates is significant.

To be sure, the business cycle could still change the economic landscape. Rising interest rates might slow demand and bring inflation in check. An extended recession could slow hiring and ease competition for new hires. Or the tumultuous war in Ukraine, which has stirred up other global commodity prices, could get resolved.

But whoever emerges as the new leaders of the UAW — and Unifor in Canada — can be counted on to make costly demands before locking in another four-year deal.

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