Home » ‘We’re Done Taking Their Crap’: UAW Pushes Members For Strike Vote

‘We’re Done Taking Their Crap’: UAW Pushes Members For Strike Vote

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Hey, baby. Good morning. And not just any morning—a very happy Inflation Reduction Actaversary to you. I know, I can’t believe it’s been a whole year, but President Biden’s landmark legislation has already had profound implications for the automotive landscape, both (potentially) good and (potentially) bad. And however indirectly, the U.S.’ newfound love of battery plant investments may contribute to a strike by the United Auto Workers union this fall.

We’ll have those stories on today’s morning roundup, plus some dispatches from Ford CEO Jim Farley’s electric road trip and one outlet asks: are all cars Land Rovers now?

Vidframe Min Top
Vidframe Min Bottom

You deserve the best, baby, and I’m gonna make sure you get it.

UAW Pushes Membership For Strike Authorization Vote, Says It’s Done With ‘Scraps’

Bodies In White Travel Down The Automatic Respot Welding Line, W
Photo: Jeep

All summer we’ve been closely watching the UAW’s contract negotiations with the Big Three, which are more fraught than they’ve been in decades. Union members say their pay hasn’t kept up with inflation, they’re losing manufacturing jobs to China and Mexico, they’ve hated the “two-tier” wage system and they want it gone, and they want assurances that they’ll still have jobs in a potentially EV-centric industry that may need fewer parts and less labor. They’re making big demands in a time when the auto industry is posting record profits and record car prices, but execs say the “electro-mobility” future may kick everyone’s asses. (I think that about summed all it up.)

There’s a good chance many of you know this already, but in union negotiations, you have what’s called an “escalation plan.” The UAW’s latest step is asking members for a strike authorization vote next week. That doesn’t mean they’re going on strike—not yet, anyway—but the members will affirm to leadership that they’re down to do it if negotiations don’t go their way. It’s both a powerful and scary message to send to management and a test to see if the members really have the appetite to take the fight to that level because they won’t get paid if that happens. (The UAW has a strike fund, but at $500 per week per member in this economy, it’s not what I’d call a mind-blowing deal.)

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In asking for the strike authorization vote, UAW President Shawn Fain delivered the fire members have been used to under his tenure. Here’s Reuters:

He urged members to approve the strike authorization, saying it would show the automakers that “we’re done taking their crap and the scraps they want to feed us,” Fain said.

He directed union locals to begin strike authorization voting immediately and to transmit the results to UAW International by the end of the day on Thursday, Aug 24. The workers’ current contract expires on Sept. 14.

“Whether or not there’s a strike next month is entirely up to the Big Three automakers,” Fain said in a statement earlier on Tuesday. The UAW wants to improve pay and benefits and end a two-tier pay system that contributes to wage erosion.

[…] The three automakers have said they want to reach a deal that is fair to the workers but also gives the companies flexibility at a time when the industry is shifting from gasoline-powered vehicles to electric models that have fewer parts and require less labor.

Via the Washington Post, here’s the automakers’ response (sans Stellantis, which did not respond):

“Ford is proud to build more vehicles in America and employ more UAW-represented hourly workers in America than any other automaker,” the company said in a statement. “We look forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever.”

General Motors said it is working hard with the union “to ensure we get this agreement right for all our stakeholders. We know that our U.S. economic impact supports more than 6 jobs for every job created by GM. We take that responsibility very seriously.”

How likely is this to happen? I’d say it’s pretty serious; one analyst who spoke to Axios put the odds at 50%. If it does, it will be costly; GM lost $3.6 billion from a 40-day strike in 2019. And as that story notes, Fain’s UAW could orchestrate a strike with all three automakers, essentially crippling a huge chunk of the American auto industry.

On the consumer side (that’s you guys) it could mean constrained new car supplies and probably higher prices at a time when the industry is juuuuust getting back on track post-COVID. You also have to put this in the context of a Hot Militant Union Summer, which has seen Hollywood go on strike (maybe into next year, from what I’ve heard) and UPS and the Teamsters threatening one too before an agreement was made.

I think this UAW’s eager to send a message, and if any of this works, it will target the Asian and European automakers for organizing next, as well as Tesla. But the next few weeks could be a wild one in the auto business.

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The Inflation Reduction Act, One Year Later

4 Gmfactoryzeropotus031
Photo: Jeep

Battery factories are part of the UAW’s concerns here. A bunch of American automaker EV battery joint ventures are popping up all over the country, but those aren’t unionized plants—not yet, anyway. It’s one part of union members’ concern about the future, a concern the automakers share too but in different ways.

But this wouldn’t be happening without the Inflation Reduction Act (also, the name sucks and it’s almost comically misleading.) It passed a year ago today. And the Biden Administration’s signature act has meant huge government-subsidized investments into battery factories as well as a revised EV tax credit system.

Is it working? On the first front, I’d say it is. The Electrification Coalition has a long list of battery plant investments I won’t copy and paste here because you’d be here all day and we need you to click on other articles. But it’s sparked the construction of multibillion-dollar new battery plants from Rivian, Hyundai, SK On, LG, each of the Big Three, Samsung, Tesla, Toyota, Volkswagen’s new Scout brand… you name it. Everybody got in on this. I’m starting to feel like I should’ve started a battery plant myself.

Interestingly, most of those factories are being built in the South or in red states because those tend to be most friendly to big business and manufacturing (and less so to unions.) The battery investments America is making right now are game-changing and could succeed in wresting the supply chain away from China as intended.

But as journalist Ryan Cooper wrote in Heatmap News this week, Biden’s election-year problem is that nobody knows about this stuff—especially in the communities that most stand to benefit from these investments. Democrats are terrible at messaging and great at getting rolled by their enemies, particularly a certain national cable news network.

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But hey, that’s his burden to carry. Has the IRA been good for consumers? If you take the long-term view I’d say yes, because those battery plant investments will pay off. But I increasingly believe the EV tax credit scheme has been flawed—too limited right now to the cars and batteries built in the U.S., and I think that’s a big reason EV adoption is slowing down.

Again, you can’t blame everyone for not running out and buying $60,000 electric Hyundais they’d struggle to find charging for.

Ford CEO Jim Farley’s Electric Road Trip Has Some Charging Challenges

As many of us do in the summertime, Ford CEO Jim Farley has grabbed his car keys and set out to experience the open road. He’s been out and about lately, and sometime after his trip ended he stopped by Autopian associates Galpin Motors in Los Angeles to hang out with Dwayne “The Rock” Johnson and oversee delivery of the star’s new F-150 Raptor R.

(David got to go check it out. He is en route to Pebble Beach now, along with Jason and Matt. They are all doing many fun things together in very fun cars. I have been stuck behind writing the blogs. This is not the first time this has happened.)

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Anyway. Back to Jim Farley. His search for adventure happened in an F-150 Lightning, which to me seems like an excellent road trip vehicle. But as anyone who’s ever road-tripped in a (non-Tesla) EV will tell you, charging was the biggest challenge. Here’s the video he posted on the social media service formerly known as Twitter:

Ford was the first automaker to gain access to, and eventually adopt, Tesla’s charging network and plug standard. Many more automakers followed and there’s a good chance those things will represent the future of EV charging in America.

I do appreciate Farley’s candor here, though. You often get a really rosy view of EVs and EV adoption from the automakers, charging companies, climate activists and policy wonks, and that view is quite different from the reality on the ground.

Are All The SUVs Land Rovers Now?

56348 Hyundaisall Newsantafeboastsboldnewdesignoptimizedforeffortlessoutdoorlifestyles Large
Photo: Hyundai

Over at Newsweek, Eileen Falkenberg-Hull puts to words a feeling I’ve had for a while but haven’t been able to articulate: all the SUVs are turning into Land Rovers, now. Seriously! It’s what so many of them look like. Boxy, tough, ready to plunder nature on an individual level—more so than even in past decades:

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Lincoln Aviator, Hyundai Santa Fe, Lexus GX, Cadillac Escalade IQ, Toyota Land Cruiser. All four sport utility vehicles (SUVs) have brought up immediate comparisons to Land Rover design.

Why do these new vehicles pull so strongly on Land Rover aesthetics? Are designers out of ideas? Is it that Land Rovers are so iconic that looking like one is an immediate badge of off-road authenticity?

[Larry Printz, internationally-syndicated automotive journalist]: “Land Rover’s Range Rover put the most elegant spin on SUVs, creating the rugged, sporting, elegant stiff upper lip that’s the automotive equivalent of a Barbour overcoat. There’s a timelessness to it, as Land Rover always lacked the resources to follow Detroit’s annual model change mantra. That only enhanced the Range Rover’s gravitational pull on designers, who always fall back on classic design and proportion, which the Range Rover has. There’s little need to radically rethink it.”

Some of these SUVs get a pass. The Mercedes G-Class has always been boxy. And the Land Cruiser, various Jeeps and the reborn Bronco can lay claim to plenty of historic examples for their current styling. That is less true of a company like, say, Hyundai.

But you have to admit beyond that beyond the boxiness, tons of SUVs are following this playbook now: large, full of pretenses of luxury and rugged adventure at the same time, and expensive. Has the Range Rover unintentionally become the platonic ideal for the modern car without any of us noticing?

Your Turn

Besides my Land Rover question just now: Do you think Biden’s Inflation Reduction Act investments (and the related legislation that includes charging infrastructure) are making a difference in the automotive world? Is anyone going to care when they go to the polls next year?

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Farty McSprinkles
Farty McSprinkles
10 months ago

As someone of Irish decent, I don’t immediately think of the Inflation Reduction Act when I see the initials IRA.

JunkerDave
JunkerDave
10 months ago

Us retirees agree.

Farty McSprinkles
Farty McSprinkles
10 months ago

UAW production workers start a $18 per hour, pay on average 3% of their healthcare cost (vs 28% average) and are eligible for profit sharing (GM employees got $12,750 each this year). Note that this hourly rate is not for skilled labor (electricians, pipefitters, etc). This is for assembly workers. It also does not include overtime pay. The job requirements are a high school diploma.

The average income in Detroit Michigan is $20,961 ($10.77 per hour for a 40 hour work week).

My sources are the US Census bureau and the Detroit Free Press.

Please draw your own conclusions

Salaryman
Salaryman
10 months ago

My conclusion is that the majority of people in Detroit Michigan are criminally underpaid.

Farty McSprinkles
Farty McSprinkles
10 months ago
Reply to  Salaryman

The average home value in Detroit is $67,745 (per Zillow), so Detroit has a lot of issues in general.

Mike F.
Mike F.
10 months ago

Do you think Biden’s Inflation Reduction Act investments (and the related legislation that includes charging infrastructure) are making a difference in the automotive world? Is anyone going to care when they go to the polls next year?

Well if nothing else, this functions as a good test of the community’s ability to handle a politically charged question while remaining more or less respectful of each other.

Well done, community.

Vic Vinegar
Vic Vinegar
10 months ago

Maybe if I could have bought a Toyota hybrid in the past year without begging dealers to take more money than the car is worth, I would have been in position to buy an EV sooner as a commuter car to take advantage of the credit.

But I’m not buying two cars at once, and the other one needs to be replaced first. So back to looking for a Toyota/Lexus hybrid.

I did get solar panels, since I’ll never be giving up my 2.875% mortgage.

Silent But Deadly
Silent But Deadly
10 months ago

The IRA has obviously resulted in a lot of investment but I’m curious who is going to buy all those batteries and the vehicles they are presumably attached to. Especially since the US is longer much of a vehicle exporter to the rest of the world outside the odd specific brand (BMW SUV’s). If the North American economy goes bananas then that’s a lot of stranded assets…

Space
Space
10 months ago

Who is going to buy them? Wealthy people, but that’s for most new cars.

Boulevard_Yachtsman
Boulevard_Yachtsman
10 months ago

Is anyone going to care…

Uh, based on a recent dinner conversation with my parents while they paid a birthday visit, I’d say no, at least not about the IRA. Nope, my old man claimed that Biden is literally killing off Ford (somehow?) with all this “goddamn government shit”, and he’s still pissed at Biden because the cheap motor oil at the local farm store is no longer available (which I believe was Citgo… didn’t have time to get into that).

I asked for an example of what exactly it was that linked the current president to the looming death of the Ford Motor Company and was quickly interrupted by my mother loudly proclaiming that I shouldn’t shop at Target anymore because unlike Ford, they deserved to go out of business and it was unfortunate that Biden was likely going to bail out the company since “that’s where the woke people shop” and “you know, all the controversary and everything”.

W.T.F.

When I responded that I was just there the other day, didn’t really see anything controversial about the place, I was glared at, got to hear a condescending “well, you know” and then was immediately asked if my daughter was looking forward to school.

These are people who claim to be informed, yet exist in a factual la-la land. They have no clue what the IRA even is, but they’re super pumped about the possibility of a repeat-run by the last guy. Total allegiance to the tribe. Even if the Democrats were any good in the messaging department, this is what they’re up against.

Last edited 10 months ago by Boulevard_Yachtsman
Dogisbadob
Dogisbadob
10 months ago

Tell them all Ford needs to do is make better cars 😛

Johnny Anxiety
Johnny Anxiety
10 months ago

Your parents are brain poisoned.

Col Lingus
Col Lingus
10 months ago

Well I wonder what bullshit TV network they get their “news” from?
There are some folks who prefer not to think. It truly sucks. Good luck.

Chronometric
Chronometric
10 months ago

I can’t even talk to my parents about anything but the weather and their grandkids. They watch the news 24-7 so they think they are well informed.

The Dude
The Dude
10 months ago

My folks watch a lot of Fox “News” too. But they have this weird fantasy that their kids should all be paid more (in pretty happy with my salary but I won’t turn down a pay increase) while at the same time their voting patterns support politicians and policies that are favorable towards businesses keeping as much money as possible.

WOV
WOV
10 months ago

“EV adoption is slowing down”….Experian’s registration database or https://atlaspolicy.com/ev-hub/ are both relatively affordable ways to use more primary source material to stop reporting the wrong if you’d like!

Speedway Sammy
Speedway Sammy
10 months ago

The UAW (at least their automotive branch) is on life support. When they couldn’t unionize Tesla Fremont (which had been UAW represented in its previous life under GM/Toyota) in one of the most pro-union states (California), and with a supportive Democratic administration in Wash DC, you knew they were in serious trouble.

Dogisbadob
Dogisbadob
10 months ago
Reply to  Speedway Sammy

and don’t forget that used to be NUMMI (GM/UAW)

Tesla is the place that needs unions the most, yet even they don’t want the UAW.

The UAW gives unions a bad name, and even other unions don’t like them!

Space
Space
10 months ago
Reply to  Dogisbadob

Is there an alternative union for automotive workers?

Andy Individual
Andy Individual
10 months ago

One way or another, the UAW members are in for a lot of Fain.

I wonder if putting all those battery plants where they are is such a good idea. They may very well have labour recruitment problems. With such a deeply ideological population, there are too many people that would rather toil in an obsolete coal mine than a nice clean air conditioned factory. Too woke apparently…

Chris with bad opinions
Chris with bad opinions
10 months ago

That’s when you start hiring 12 and 13 year olds.

ColoradoFX4
ColoradoFX4
10 months ago

Honestly, I get more Ford Flex vibes from the new Santa Fe than LR.

10001010
10001010
10 months ago

Is the IRA making a difference in automotive production in the US? Undeniably.
Will anyone care when they go to the polls next year? Outlook not so good.

Pupmeow
Pupmeow
10 months ago
Reply to  10001010

Agreed on both points.
Also, if we are going to shit on Democrats for poor messaging (which I’m fine with), we should spend equal or greater time shitting on the media. That means print, TV, and especially social media. These communication media are all enormously skewed toward sharing “information” that is attention-grabbing (Trump Says Thing!), rather than what is important (Government Programs That Will Improve Your Community and Enhance Your Quality of Life!).

Protodite
Protodite
10 months ago
Reply to  Pupmeow

You realize what you’ve described as your ideal is usually termed propaganda, right?

Dar Khorse
Dar Khorse
10 months ago
Reply to  Protodite

It’s only propaganda if it’s not objectively true.

Col Lingus
Col Lingus
10 months ago
Reply to  Dar Khorse

“It’s not a lie if you believe it, Jerry.”
George Costanza

Pupmeow
Pupmeow
10 months ago
Reply to  Protodite

Sorry? My ideal is that the media reports on what is happening based on the importance of the event, not the attention it will garner. I don’t understand how that could be considered a desire for propaganda.

Phantom Pedal Syndrome
Phantom Pedal Syndrome
10 months ago
Reply to  Pupmeow

“ My ideal is that the media reports on what is happening based on the importance of the event, not the attention it will garner.”

Don’t get me started.
How many weeks was that OceanGate crap crammed down our throat while meanwhile not a media peep about the forty-one migrants who died in a shipwreck off the coast of Italy at the same time.
It’s getting harder and harder to get meaningful news. Even if you know where to look.

(Side note: I dig your profile picture.
I have doubles of my favorite cars too.)

Last edited 10 months ago by Phantom Pedal Syndrome
Pupmeow
Pupmeow
10 months ago

Thanks, but triples is best.

Chronometric
Chronometric
10 months ago
Reply to  Pupmeow

The problem was that your stated ideal (reporting based on importance and objective facts) was different than your example (Government Programs That Will Improve Your Community and Enhance Your Quality of Life!). Whether a government program will improve your quality of life is entirely unknowable until after the fact. Even then, the result will have winners and losers so it is debatable. The IRA, for example, hopefully will spur a great Green Energy Industry in the forgotten Rust Belt where the US leads the world in fossil-fuel-free tech. Or it might be a huge inflation-creating giveaway to reward political patronage and buy votes for Biden. We just don’t know yet. Legitimate subject? Absolutely. Taking the word of politicians for the future effect? No.

Toecutter
Toecutter
10 months ago
Reply to  Pupmeow

Everything that comes out of these media institutions also seems carefully crafted to divide the public and keep them bickering amongst themselves, rather than looking at their leadership’s actions and the problems caused from such. The adoption of ready-made “talking points” in lieu of actual arguments have rotted the collective intelligence of the hoi polloi.

MATTinMKE
MATTinMKE
10 months ago
Reply to  Toecutter

Seems to me that politics has turned into team sports in this country. People aren’t making voting decisions based on talking points or (gasp!) the issues, they are voting red or blue because it’s Red vs Blue! Packers vs Bears! Your Team vs My Team!

We’re all screwed.

Usernametaken
Usernametaken
10 months ago

Hot take: if it had a split gate the Kia Telluride would be a better looking Range Rollie than the new RR, which, respectfully (especially in person) looks shit

JDE
JDE
10 months ago

I certainly think the inflation has not reversed as of yet, so I am curious if it is actually working as some Media outlets would have you believe? It may be slowing, but I don’t think it will slow fast enough to save old Sniffy Joe. I know I will certainly have to have a seriously bad candidate on the other side (AKA Trump or Desantis or MTG) to instead want to vote the 80 year old man that has already made some pretty serious faux pas, back into that office.

Pupmeow
Pupmeow
10 months ago
Reply to  JDE

You don’t need the “Media.” The information is easily accessible: https://www.bls.gov/news.release/pdf/cpi.pdf

Inflation rates are down significantly YOY.

MH7
MH7
10 months ago
Reply to  Pupmeow

Meh-I’d say not quite enough data to call that a trend. Year over year was 3.3%, which is still a touch on the high side, but gas was over 30% more back then. Take out food and energy, inflation was still sitting around 5% last I checked. Might be down but it’s still double what we’d consider normal and more than my raise last year.

Of course, this ignores the fact that inflation never hit 8% without food and energy, but prices are still up at least 10% over what they should be.

Mr. Fusion
Mr. Fusion
10 months ago
Reply to  JDE

Joe was my last choice in the 2019 primary, but even a guy in hospice care would be a better choice than whoever the other side puts up against him. This is not a difficult decision.

David Smith
David Smith
10 months ago
Reply to  Mr. Fusion

He wasn’t my last but he wasn’t my first.

Chris with bad opinions
Chris with bad opinions
10 months ago
Reply to  JDE

Then I guess you’ll be voting for Biden.

Turkina
Turkina
10 months ago
Reply to  JDE

Once you have inflation, you can never go back to the good old days. That’s just how it works. You need to fight for higher wages to compensate for the permanent effect inflation has on prices. Low inflation just means prices won’t increase any more from current levels (as much). Going back to the good old days happens via deflation, which tends to be a terrible thing for economies. People hoard their money in the expectation prices will continue to decrease, meaning less and less money flows through an economy. Which causes stagnation and contraction.

So, unless you fancy yourself a great negotiator, joining hands with your fellow workers is a good way to pressure employers to increase wages and benefits to help workers pay their bills. Oh wait. That’s a union.

Rad Barchetta
Rad Barchetta
10 months ago

one analyst who spoke to Axios put the odds at 50%

That’s an analyst’s way of saying “I have no idea” without losing face.

Man With A Reliable Jeep
Man With A Reliable Jeep
10 months ago
Reply to  Rad Barchetta

I don’t know, I thought that was pretty embarrassing. There’s meteorologists out there face palming.

Rad Barchetta
Rad Barchetta
10 months ago

You might be right about that. Or wrong. Definitely one of those two.

Torque
Torque
10 months ago
Reply to  Rad Barchetta

I would give the chances 50/50

Pupmeow
Pupmeow
10 months ago
Reply to  Rad Barchetta

All I know is there is a 92% chance that they may or may not be correct.

Rad Barchetta
Rad Barchetta
10 months ago
Reply to  Pupmeow
GreatFallsGreen
GreatFallsGreen
10 months ago

I hadn’t heard LR comparisons for the Aviator or Escalade IQ, but I’d say that’s more following contemporary design trends of the time, as with say, the CLS or A7 and so on in the past.

The LC/GX have precedent even without any retro cues, one might say Toyota felt more confident sticking with and/or leaning into the boxy design because of LR.

Only the Santa Fe I would say is really leaning into the boxy Land Rover design themes without precedent in their own lineup.

Perhaps LR will follow others in looking to LR design and aesthetics for the next Discovery…

JDE
JDE
10 months ago

Pretty sure the LR followed the Jeep trend as that brand seems to do no wrong.

Frankencamry
Frankencamry
10 months ago

Being a person of a certain age, my go-to mental image of a Land Rover is about 50 years old and decidedly agrarian, not a 2000s Range Rover. Land Rovers don’t even look like Land Rovers to me.

Every time I see a new Discovery it’s a “look what they did to my sweet boy” moment for me. Might as well be a Hyundai.

It’s too early for the investments to show up at the polls, or even know if they were wise. Those plants were getting built regardless. If we over-subsidized to get them here vs buying the same batteries cheaper, that’s not a win.

Toecutter
Toecutter
10 months ago

As with most things the U.S. legislative branch passes, the legislation does the exact opposite or serves a function entirely opposed to its namesake.

I love EVs and think they should be in more widespread use than they are today. That being said, modern EVs with massive 100+ kWh battery packs and $60,000+ price tags are nothing short of a boondoggle and a total waste of resources, further enabled by this so-called “Inflation Reduction Act”. They won’t solve anything for people of average means, and subsidizing them doesn’t do this demographic any favors because they could never dream of affording them anyway, let alone keeping them operational when they are 20 years old, yet are indirectly paying for them through the tax system.

The inflation reduction act will not reduce the real on-the-street inflation people are experiencing and has failed to do so, precisely because inflation is a systemic problem that started as the result of choices made decades ago(Federal Reserve Act of 1913 coupled with a sprawling National Security State during WWII and after coupled with ending the Bretton Woods agreement in 1971 coupled with endless money printing starting during the Reagan administration coupled with a bloated “defense” budget to build a world spanning empire with endless war coupled with constant bailouts for “too big to fail” institutions over the decades). Neither ruling party offers a meaningful solution or seeks to address it, as both are captured by the same powerful people and institutions that are exacerbating the problems and profiting from them at everyone else’s expense. Eventually, the Petrodollar will lose viability if current trends continue. What happens after will be interesting to watch.

What a lot of people don’t understand about inflation is that even if you reduce the rate, prices are still continuing to go upward, and will continue to do so. Then the official measures used to measure inflation aren’t exactly honest or representative of the reality that people of average means are experiencing in the real world. They will continue to grow ever more disparate in fact as the methodology used to calculate it keeps changing.

90sBuicksAreUnderrated
90sBuicksAreUnderrated
10 months ago
Reply to  Toecutter

Not really sure what you’re advocating for here. We should go back to the gold standard? Bear in mind that both violent price fluctuations and severe business cycles were much more common than today under such a system. Eliminate the Federal Reserve? You think that the banking panics that we’ve had in the last 30 years are bad? Look at how frequent and problematic they were before the Fed was established (which is why it was established in the first place). Why does it matter if we generally have stable, low levels of inflation? Prices generally go up, but so do wages, investments and other assets. Granted, this has been more uneven than many would like as of late, but I attribute that more to our fiscal policy over the past few decades. The system we have isn’t perfect but neither is what it replaced.

V10omous
V10omous
10 months ago

Why does it matter if we generally have stable, low levels of inflation? Prices generally go up, but so do wages, investments and other assets. 

Average person encountering inflation in wages: “I earned that raise through my skills, experience, etc”

The same person encountering inflation in cost of goods: “Greedy corporations are gouging me and the government is allowing it to happen”

It’s becoming more and more clear to me that the psychological impact of seeing higher prices is just an insurmountable obstacle to consumer sentiment, even when real wages are rising. It’s a tough problem.

JDE
JDE
10 months ago
Reply to  V10omous

the real issue is the raises each year are far from guaranteed. Prior to last year it was actually a surprisingly small percentage of companies that had merit increases. in most cases the ones that did set the standard at 3%.
For the past 10 years before 2020 inflation was hovering around or just under that 3% mark(so yes slight inflation is not a new concept). But the last two years have seen that the inflation has outpaced the average wage increase by a large margin. that means for the average worker, actually even the better workers, since the bell curve usually stops at 5 Percent, are actually losing buying power and there is not a real end in sight. In fact the things happening to shrink inflation are causing job loss and outsourcing to occur actually. So when you start ordering from a machine at McDonalds so they don’t have to pay the 15 and hour for a button pusher that still screws it up most of the time, that is why. the alternative will be 10 dollar value menu burgers.

Year Inflation Rate (%)Annual Change
2022 8.00% 3.30%
2021 4.70% 3.46%
2020 1.23% -0.58%
2019 1.81% -0.63%
2018 2.44% 0.31%
2017 2.13% 0.87%
2016 1.26% 1.14%
2015 0.12% -1.50%
2014 1.62% 0.16%
2013 1.46% -0.60%
2012 2.07% -1.09%
2011 3.16% 1.52%
2010 1.64% 2.00%
2009 -0.36% -4.19%
2008 3.84% 0.99%
2007 2.85% -0.37%
2006 3.23% -0.17%
2005 3.39% 0.72%
2004 2.68% 0.41%
2003 2.27% 0.68%
2002 1.59% -1.24%
2001 2.83% -0.55%
2000 3.38% 1.19%
1999 2.19% 0.64%

Toecutter
Toecutter
10 months ago
Reply to  Patrick George

What is interesting is looking at food costs. I keep my old receipts. The CPI’s claims for cost increases have consistently been about half of what my receipts have been showing since 2008. I buy mostly raw ingredients and home cook my meals, so it’s hard for them to justify the cost increases with hedonic adjustments and claim there were “qualitative improvements”, because a bag of black beans is still a bag of black beans, a bottle of grinder of black pepper is still a grinder of black pepper, an 8 oz bag of jalapenos is still an 8 oz bag of jalapenos, and a bundle of cilantro is still a bundle of cilantro. Yet if I were to take the CPI’s claims at face value, I’d expect my grocery bill to be about 2/3 as much today as it actually is, for the same basket of goods I’ve been buying all along. Yet another reason I don’t trust the official numbers. They don’t align with what I can empirically observe.

The Chapwood Index is much closer to the reality I’ve been seeing, and its YoY inflation claims have been hovering around 8-12% for the past decade. Wages have not going up anything near that much.

Pupmeow
Pupmeow
10 months ago
Reply to  Toecutter

You don’t trust nationwide statistical analyses because they do not align with your anecdotal experience. That’s what you’re saying.

Man With A Reliable Jeep
Man With A Reliable Jeep
10 months ago
Reply to  Pupmeow

If the CPI doesn’t match reality or consumer experience, what is it even good for?

V10omous
V10omous
10 months ago

It’s good for knowing when your definition of reality or consumer experience isn’t widely shared.

BuiltMNtough
BuiltMNtough
10 months ago
Reply to  Pupmeow

No. Numbers can be manipulated any number of ways. Unemployment is reported by how many people apply for unemployment each week. When someone gets approved for unemployment, there is a set cap on long they’ll get paid. So when they hit that cap, they’ll stop requesting payment because they won’t receive any, but for the “official numbers”, that person is no longer unemployed.

V10omous
V10omous
10 months ago
Reply to  JDE

But the last two years have seen that the inflation has outpaced the average wage increase by a large margin.

This statement was true in 2022, it is not true in 2023.

https://fred.stlouisfed.org/series/LES1252881600Q

Real wages are high historically, and rising.

Everyone can and will find an exception (“I didn’t get a raise, so your data is wrong”) but that’s why looking at the health of an economy means going beyond vibes, feelings, and anecdotes, and straight to the data.

JTilla
JTilla
10 months ago
Reply to  V10omous

Overlay that on inflation. It doesn’t match up.

V10omous
V10omous
10 months ago
Reply to  JTilla

Do you know what “real wages” means?

MH7
MH7
10 months ago
Reply to  V10omous

Last year I got a yearly raise of 4%, which is quite good compared to most. Inflation was 8%. I lost 4% of my salary for literally nothing, while most companies posted record profit. Yes, we got gouged, and yes it was allowed to happen.

Promotions are earned through skills and experience. My next promotion will merely restore the wage I had when I started here a bit over two years ago (but is likely still a year or two off).

V10omous
V10omous
10 months ago
Reply to  MH7

I’m sure you were thanking the government then every year when you got a 4% raise and inflation was 1-2%? Or this year when your 4% raise will outpace the 3% inflation we are currently experiencing?

The trend is real wages rising. That’s a nationwide survey, and an average, so of course some people are missing out. That doesn’t make it less true in the aggregate.

MH7
MH7
10 months ago
Reply to  V10omous

4% is the exception, in a year of record growth for our company, not the rule. They’ve already laid off someone from my team so I’d wager its not that high this year. Also, current YOY inflation reports are off due to the gas price increases of >25% in June and July of last year. Wait a few months and the actual number is likely to be 5%, which is the number reported when food and energy are excluded. So I anticipate losing another 2-3% of purchasing power compared to last year, on top of the 4% loss in 2022 and a few percent loss in 2021.

I can’t put a number on it but would wager a large part of the wage increase was due to the ease with which people could switch jobs while working remotely. Lots of people got multiple raises job hoping during Covid. That gravy train has sailed though, between the tech layoffs and other fields requiring return to office.

V10omous
V10omous
10 months ago
Reply to  MH7

Real wages are still rising in 2023 in line with the 2015-2019 trend. It’s not just an artifact of Covid.

I’m sorry yours don’t seem to be keeping up, but especially for people on the lower end of the wage scale, times have rarely been better.

DadBod
DadBod
10 months ago
Reply to  MH7

I was under the impression most companies provide an annual cost of living increase, sometimes disguised as an (almost-certain) bonus/raise.

MH7
MH7
10 months ago
Reply to  DadBod

A bonus is not a salary increase, it’s a performance incentive. I didn’t hear of anyone getting an 8% cost of living increase last year.

Chris with bad opinions
Chris with bad opinions
10 months ago
Reply to  DadBod

LOL, no.

Pupmeow
Pupmeow
10 months ago
Reply to  MH7

I don’t know your work or your market, but I hope you are at least trying to find a new job. Most significant promotions and comp increases these days come from switch jobs, not internal improvements.

Toecutter
Toecutter
10 months ago

I have my own ideas for solutions, but I wasn’t advocating for anything in this post, merely making an observation and then a prediction. We’ll see how it plays out. I don’t think there are any solutions that are viable within the scope of “mainstream” U.S. politics, which is increasingly becoming divorced from mainstreet America and its day-to-day struggles, regardless of political party or whatever politician one thinks has the answers.

90sBuicksAreUnderrated
90sBuicksAreUnderrated
10 months ago
Reply to  Toecutter

Hey, fair enough. I appreciate the response.

JDE
JDE
10 months ago
Reply to  Toecutter

The other part of this, that really causes the most problems is the Middle Class Wage. the Middle class has to be the largest percentage of a population to avoid the most strife. Bringing low end jobs up to middle class wages requires the middle class wages to increase relatively. But all to often this does not happen, or it takes years to catch up.

Making everyone equal, regardless of skill or difficulty of doing a job is what stops innovation and progress generally. When the guy working hard or using a set of skills or knowledge can go down the street and punch a button for the same money. the internal goal setting becomes invalid. The only real benefit is the cost of automation is better covered by ROI for a short term, so many of the overpaid menial jobs at that point get eradicated over time I supposed.

When the Bell curve inverts, the result is generally Civil disobedience.

BuiltMNtough
BuiltMNtough
10 months ago
Reply to  Toecutter

This is so true. If there is no restraint or consequences on the people that are connected and in charge, carelessness and corruption goes rampant.

Dogisbadob
Dogisbadob
10 months ago

You guys missed the opportunity to talk to Farley, since he was already at your sponsoring dealer. Ask him what he learned from Toyota.

Ford and others need to bring back the cheap small cars.

In yesterday’s article about the Mirage, people from other countries mentioned how the Mirage actually cost less overseas, with their high taxes and shit, than here.

The Korean knockoff Land Rover is better than the real thing 😛

Jack Beckman
Jack Beckman
10 months ago

Do you think Biden’s Inflation Reduction Act investments (and the related legislation that includes charging infrastructure) are making a difference in the automotive world?

Yes, in that we’re seeing a lot of battery factories announced for the US. But let’s see how many actually get built, and if they’ll be able to get the raw materials to make those batteries. As for charging stations – that’s a hot mess. The bill only supports CCS chargers (because Musk BAD so punish Tesla) but most automakers are abandoning it for Tesla’s plug. Let’s see if any of this charging infrastructure gets built out.

“Is anyone going to care when they go to the polls next year?”

Nope. Because what people see (and is directly because of this act and other policies) is that inflation has cost them every month for a couple of years now in terms of lower buying power, and they are paying more for everything (including gas, which has gone way up lately). They can’t afford an EV, so they don’t care about charging infrastructure.

Drew
Drew
10 months ago
Reply to  Jack Beckman

The CCS requirement was not “Musk bad,” but what the majority of companies utilized. (There is, of course, the matter of Tesla’s market share meaning the majority of cars on the road are not CCS cars.) It was an attempt to incentivize a move to a standard. Nobody is saying that leaving out CHAdeMO was an attempt to punish Nissan.

The fact that NACS seems to be the standard we’re moving toward means this should be revisited, of course, but that was not yet happening at the time the rule was finalized. On the plus side, the text of the bill didn’t call out specific standards, so the Federal Highway Administration can revisit and change the ruling regarding standards without too much headache.

Man With A Reliable Jeep
Man With A Reliable Jeep
10 months ago

I don’t think the IRA made a big difference. But hey, eggs are affordable again.

V10omous
V10omous
10 months ago

 Is anyone going to care when they go to the polls next year?

It’s pretty clear to me after numerous frustrating interactions here that some people have already made up their mind that the economy sucks, will always suck, that no one can do anything to fix it, and that all indications to the contrary are fake/rigged/don’t matter anyways (take your pick).

So I’d say no, it isn’t going to matter, which is a damn shame because for whatever his faults, Joe Biden really has made a difference for American manufacturing in a way that numerous of his predecessors in both parties merely talked about.

Nsane In The MembraNe
Nsane In The MembraNe
10 months ago
Reply to  V10omous

One of the mainstream Dems’ biggest issues since the Obama admin has been terrible messaging and this weird unwillingness to accept victory. The Biden admin and Dems in general should be shouting this from the rooftops and instead all we get is more of the same “Orange man BAD” and piles of takes on fringe social issues. Maybe own the fact that you’ve actually done some good shit for the working class for once?

Last edited 10 months ago by Nsane In The MembraNe
StillNotATony
StillNotATony
10 months ago

That’s because good news almost never makes headlines. Gotta keep people whipped into a frenzy of rage against the “other”.

Also, any time something works, it’s usually because both sides have to give something up. And there’s always somebody back home ready to primary a politician by running to their extreme and vilifying the incumbent for the sin of “compromise”.

Pupmeow
Pupmeow
10 months ago

The Democratic party does not control what’s on CNN, Facebook, or Fox News.

ElmerTheAmish
ElmerTheAmish
10 months ago
Reply to  Pupmeow

Of course they don’t. However, that doesn’t mean their messaging can’t influence it. Trump said any damned thing that came to his mind, and that became what the news networks leaned toward covering. The Dems can do the same, pushing out a message that’s newsworthy and should be covered with at least some air time.

Toecutter
Toecutter
10 months ago
Reply to  V10omous

I don’t at all agree with you, but am glad you are willing to say it. Upvoted.

V10omous
V10omous
10 months ago
Reply to  Toecutter

Fair enough. Cheers.

TOSSABL
TOSSABL
10 months ago
Reply to  V10omous

I often find myself upvoting both of you because you both have good points, and especially because you can both disagree and be civil about it. Rare these days-and appreciated by me at least.

Drew
Drew
10 months ago
Reply to  V10omous

While you aren’t wrong, a lot of frustration also reflects the increased gap between executive and worker wages, worker wages not keeping up with gains in productivity, and housing significantly outpacing inflation. None of that is really the fault of the current administration, and they are all long-term trends. And it would be a really difficult push to get back to pre-80s tax rates or the other major reforms that would undo those long-term trends.

The thing about economic numbers is that you can point to all sorts of indicators, but someone else can point to others, since the economy is a massive, nebulous thing with so many different factors that it’s nearly impossible to have all of them pointing the same way.

Last edited 10 months ago by Drew
V10omous
V10omous
10 months ago
Reply to  Drew

it’s nearly impossible to have all of them pointing the same way.

That is true, but it seems unmistakable to me that the majority of them are pointing the right way right now.

Stock market up.
Unemployment down.
Inflation way down.
Real wages up.
Inequality down (wage gains strongest among non-supervisory employees and in the lowest quartile).
Homeownership rate up.
Manufacturing investment way up.

If someone was dedicated to only finding the bad things, I’m sure they could. But it requires some willful blindness to all the good.

The disconnect to me is that on many objective measures, the economy is healthier today than it was at times of great consumer sentiment. And the weird phenomenon (widely covered) of “I’m personally doing OK, but I’m convinced the economy is bad in some nebulous way” speaks to a media narrative driving the sentiment rather than objective truth.

Drew
Drew
10 months ago
Reply to  V10omous

The media narrative is certainly a problem. I think a lot of it is overcorrecting in an attempt to avoid accusations of bias (while only one side is concerned with neutrality), and some of it is a news cycle that rewards controversy.

I also suspect that the crowd more likely to be voting Dem is somewhat younger, and they are seeing the difference between their experience and that of their parents, who could buy a home and raise a family with a single income straight out of HS. Economic growth is slow, and isn’t going to get that back any time soon. But there is a real feeling that something has been lost there, and economic growth isn’t enough to change that.

Thevenin
Thevenin
10 months ago
Reply to  V10omous

The disconnect comes from the stratification of the US economy, and the fact that some measure economic success by the absence of desperation rather than the presence of prosperity.

In September of 2022, CBO report 58426 examined the effects of inflation and wages (2019-2022) on each income quintile. They found that while the middle quintile has done quite well, the bottom quintile was spending a larger share of their takehome income for the same goods. Inflation has hit necessities harder than luxuries, and wage increases aren’t evenly distributed. CPI-adjusted wages may be up overall, but the purchasing power of the working class is down.

When we look at critical economic outcomes, we see our economy is one of contradictions.

Since 2015, homeownership is up, but so is homelessness. (Sources: STLfed & HUD)

Since 2015, obesity in America is up, but so is malnutrition. (Source: Global Nutrition Report)

Since 2015, average household savings are up, but so are household debt and actual retirement age. (Sources: FRED & NYFed & Gallup)

In America, both overall prosperity and overall desperation have increased. While some people (like you) measure the success of the economy by the average prosperity, others (like Toecutter) measure it by the absence of desperation. Both are valid. It’s a blind men and the elephant scenario. The economy is doing great, but it’s also doing horribly at the same time — both statements are objectively true.

V10omous
V10omous
10 months ago
Reply to  Thevenin

That’s an interesting and profound way to look at it, and I don’t question anything you present here.

I would be curious if there’s a follow up report coming for this year, because conditions (especially at the lowest quintile) really were much worse a year ago.

Arch Duke Maxyenko
Arch Duke Maxyenko
10 months ago

Well, first of all the Range Rover isn’t a starter car, it’s a car for golden gods.

Nsane In The MembraNe
Nsane In The MembraNe
10 months ago

I have contained my rage for as long as possible, but I shall unleash my fury upon you like the crashing of a thousand waves! Begone, vile man! Begone from me! A starter car? This car is a finisher car! A transporter of gods! The golden god! I am untethered, and my rage knows no bounds!

Last edited 10 months ago by Nsane In The MembraNe
StillNotATony
StillNotATony
10 months ago

My first name ain’t baby.

It’s Janet.

Ms Jackson, if you’re nasty…

10001010
10001010
10 months ago
Reply to  StillNotATony

I was thinking the same thing though I prefer the original version of that song:
https://www.facebook.com/reel/860345249101773

StillNotATony
StillNotATony
10 months ago
Reply to  10001010

What… was that?

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