With just hours until their existing labor contract expires, the United Auto Workers and Detroit’s Big Three automakers are still struggling to navigate a major speed bump in what have been contentious negotiations: pay.
Ford, General Motors and Stellantis (formerly Fiat Chrysler) have spent weeks in talks with the UAW, mulling over details of a new labor contract that has major implications for the U.S. automotive industry. UAW President Shawn Fain said members deserve hefty pay raises because the auto companies have brought in billions of dollars in profit and boosted CEO pay in recent years.
Here’s what you should know about the wages portion of the UAW-Big Three negotiations.
What is the average U.S. autoworker’s wage?
In general, factory workers are not salaried, but receive an hourly wage. On average, U.S. autoworkers on manufacturing production lines earned about $28 an hour in August, up $1 from the year prior, according to data from the Bureau of Labor Statistics.
For each worker, however, the exact figure varies depending on how long someone has worked for a particular automaker. Under the industry’s tiered wage system, more recent hires start at lower rates of pay than longer-tenured workers.
Top-tier workers — meaning anyone who joined the company in 2007 or earlier — make roughly $33 an hour on average, contract summaries for the Big Three show. Those hired after 2007 are part of the lower tier and earn approximately up to $17 an hour based on a buildup of 6% annual raises under the last contract.
Unlike top-tier employees, lower-tier employees don’t receive defined benefit pensions and their health benefits are less generous.
UAW members want the two-tiered pay system abolished, arguing that it reduces lower-tier coworkers to second-class citizens.
Loss in real wages
Adjusting for inflation, automanufacturing workers have seen their average real wages, or wages adjusted for inflation, fall 19.3% since 2008, said Adam Hersh, senior economist at the Economic Policy Institute. That’s because autoworker “concessions made following the 2008 auto industry crisis were never reinstated,” Hersh said, “including a suspension of cost-of-living adjustments.”
What’s the average CEO pay for the Big Three?
Ford CEO Jim Farley earned $21 million in total compensation last year, the Detroit News reported, while Stellantis CEO Carlos Tavares made $24.8 million, according to the Detroit Free Press. GM CEO Mary Barras tallied nearly $29 million in 2022 pay, Automotive News reported. Overall CEO pay at the Big Three companies grew 40% from 2013 to 2022, Hersh said.
Barras makes 362 times more than the typical GM worker while Tavares makes 365 times more, according to company filings to the U.S. Securities and Exchange Commission. Farley at Ford meanwhile makes 281 times more, filings show.