The American auto industry workers’ strike came as the latest link in a series of conflict between workers and employers, which economists expect will cause negative consequences for economic growth if it continues for prolonged periods, although so far it has only affected a small portion of the workforce, while causing… Limited impacts on the broader economy.
Most economists and analysts expect the direct impact of the workers’ strike to remain limited, but all expectations could change if the scope of the strike expands and is prolonged.
The UAW took a somewhat new approach to the strike, targeting just three plants, with less than a tenth of its member workers from the big three, Ford, General Motors, and Stellantis. With the continued failure to reach an agreement, and the matter turning into a comprehensive strike, in which 146,000 members of the union participate, the matter will certainly be different.
Economists’ estimates indicate a quarterly damage to GDP, estimated at 1.7 percentage points, at a time when many economists still expect the United States to slide into recession in the coming months. Car production in the United States represents about 2.9% of GDP.
It is no secret that the ambiguity that the strike brings increases the complexity of the scene at the Federal Reserve, which is preparing to make a (relatively easy) decision regarding the interest rate today, Wednesday, while the whole difficulty lies in the decision expected in November. The US central bank, the largest in the world, is seeking to achieve a safe landing, which ensures that US inflation falls to its target level of 2%, while avoiding it entering into a recession, which would affect corporate profits, force them to reduce their investment spending, and cause unacceptable levels of unemployment.
Last August alone saw about 4.1 million work hours interrupted due to the strike, the largest number of work hours lost in a single month since August 2000, according to the US Department of Labor. If the month of July is added, there are approximately 6.4 million hours lost, as a result of nearly twenty strikes. Since the beginning of the year until now, 7.4 million hours have been lost, compared to a total of only 636 hours for the same period in 2022.
These large numbers came as a result of 20 large protests that included the Writers Guild of America, the Screen Actors Guild, state employees at the University of Michigan, and hotel employees in Los Angeles. Currently, about 60,000 health care workers in California, Oregon and Washington are threatening to go on strike again.
After years of relative calm, the voice of unions has become louder in the era of the incursion of inflation that the whole world, including the United States, has witnessed during the past few years. One of the main characteristics required of every CEO of any American company today is the ability to deal with such crises, let alone anticipate their occurrence at any time.
The striking workers are demanding a raise in their wages after the companies they work for achieved record profits, which US President Joe Biden says exceeded twenty billion dollars for the three companies whose workers are participating in the strike, during the first half of the year alone. They also request a number of other benefits, including retirement benefits, allowing work from home, and canceling some of the concessions they made during the global financial crisis in 2008-2009 to save their companies.
Figures issued by the Federal Reserve Bank of New York indicate that workers demand, on average, salaries approaching $80,000 annually when changing jobs. Regarding auto workers, the union requested a 36% wage increase spread over four years, similar to the wage gains seen by CEOs of automakers.
These potential increases brought to mind old fears that the US inflation rate would return to levels that were the highest in four decades, after many thought that it would soon be gone.
Treasury Secretary Janet Yellen said she believes it is too early to make predictions about what the strike means for the economy, as the issue depends largely on how long the strike lasts, and who will be affected by it.
At a time when he should have been putting the final touches to launching his re-election campaign, Biden finds himself besieged from every direction, not only because of the strike, but also because of the circumstances of his son being charged in the case of a weapon he bought, and also the possibilities of shutting down the government, despite reaching an agreement that allows things to be managed. Until the end of October, in addition to the continued rise in automobile fuel prices, which made Americans anxious and caused a decline in satisfaction rates, despite achieving successes in many other issues.
A recent poll conducted by the Wall Street Journal recently showed that although voters have a more optimistic view of the economy, few of them give Biden credit for this, as nearly three out of every five voters polled by the newspaper expressed their opinions. About their disagreement with Biden’s handling of the economy.
Republicans aim to put Hunter Biden’s business dealings squarely at the center of the 2024 election. Announcing the impeachment inquiry last week, House Speaker Kevin McCarthy said Republicans had “made serious and credible findings about President Biden’s conduct” regarding his son’s activities. .
If things go this way, Americans will be close to repeating the scenario that took place nearly four years ago, as all that remains is for Biden to leave the White House because of the economy, just as the Covid economy caused Donald Trump to leave. Will history repeat itself?
2023-09-19 23:29:03
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