The United Auto Workers on Tuesday increased its weekly strike allowance for members to $400 per week from $275, a signal of strength ahead of the union next year approaching the bargaining table with the Detroit Three automakers, according to experts.
The Detroit-based union has the funds for it, they say. In March, its strike balance sat at nearly $826 million, according to the union. For context, in 2019, the UAW paid nearly $81 million in benefits to striking members, which included stipends to the 46,000 General Motors Co. employees during a 40-day national strike, the longest again GM in nearly 50 years.
The UAW International Executive Board also eliminated a provision that a member receiving unemployment benefits cannot also receive strike pay. Eligibility for the stipend still will begin on the eighth day of a strike.
"UAW members who strike are fighting to hold their employers accountable," UAW President Ray Curry said in a statement. "Our striking members and their families deserve our solidarity, and this increased benefit will help them hold the line."
The UAW is facing historic challenges. The auto industry is enduring a once-in-a-century transformation to electric and connected vehicles that will require new skills for its workers and battery plants owned by joint ventures with foreign battery partners that the UAW is seeking to organize. Meanwhile, workers have options in a competitive labor market where other employers are increasing minimum wages and households are seeing the effects of inflation on their budgets.
"It gives them more leverage at the bargaining table," said Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School. "The stronger the strike benefits, the more of a deterrent that is. It's always one day longer: 'We can stay out on the street one day longer than the employer can fight.'"
Plus, after a years-long federal corruption investigation that resulted in the convictions of 17 people, including two former UAW presidents, the union is seeking to rebuild its reputation with reforms under the watchful eyes of a court-appointed independent monitor. Its constitutional convention is scheduled next month in Detroit, where locally elected delegates will nominate candidates to participate in the union's first-ever direct election of international officers that will begin in October, potentially threatening the 70-year hold of the current leadership's Administrative Caucus on the union. Curry is seeking election to a full term.
Members of a dissident caucus known as the Unite All Workers for Democracy celebrated the strike pay increase. The group about six weeks ago had begun circulating a resolution among local unions to support an increase in the stipend, though that request sought to have the benefits begin from day one, said Scott Houldieson, co-chair of the caucus. He didn't know how many locals had voted to support the resolution, though his Local 551 in Chicago representing Ford Motor Co. workers there had on Saturday.
"We're excited with this development that will make the membership more comfortable if we do need to take job action and improve our working conditions," Houldieson said, noting the resolution was prompted by a five-week strike by John Deere & Co. workers last fall. "We saw there was a need for the membership to be able to have more in their pocket to be able to sustain a job action like that."
Michigan's maximum unemployment benefits are $362 per week. That would mean a striking resident could have the potential to receive up to $762 per week. The Detroit News left an inquiry with the Michigan Unemployment Insurance Agency on whether residents on strike are eligible for unemployment benefits.
The 45% hike to the UAW's benefits is the first since October 2019, when the IEB at the time increased the stipend 10% from $250 during the UAW's 2019 strike at GM as the prolonged work stoppage weighed on members' pocketbooks. The strike fund totaled $739 million at the end of that year.
Now almost $100 million above that, the fund was nearing the $850 million threshold set by a resolution in 2018 that would've triggered a decrease in members' dues. The decrease would've returned dues to the level they were before 2014, when UAW delegates approved a 25% dues increase, the first hike since 1967. The fund balance in 2014 was at an all-time low of $596.7 million. The 2018 resolution included a provision that if the strike fund fell below $650 million, dues would return to the increased level.
The show of strength by the UAW comes as unions are experiencing a surge in activity as employees feel empowered in a competitive labor market and pressured by rising prices of gas, food and other items. Collective bargaining efforts across the country at Starbucks Corp. locations have sprung up, and workers unionized the first Amazon.com Inc. warehouse in New York. Companies from Apple Inc. to Target Corp. have increased their minimum wages, as well.
But Ultium Cells LLC, the joint venture between GM and battery partner LG Energy Solution, rejected a request by the UAW for a card-check agreement at a new EV battery plant in northeast Ohio, the union told members last week. Such a deal would give the union access to the facility to collect cards in an effort to organize the plant without a vote. Not having that access could make it more difficult to do so. Curry in a statement on Monday reiterated that organizing the battery plants is a priority.
"It could have a difficult round of negotiations, and the UAW wants to be as well-positioned as possible," said Marick Masters, a professor at Wayne State University's Mike Ilitch School of Business. "I don't think they're signaling they're more likely to go out on strike than they would otherwise, but they're reflecting their prudence as an organization and have prepared themselves as a membership for any eventuality that may come to pass."
