Fortune magazine has a story with a surprising connection to next year’s automaker/UAW national agreement. How does The labor shortage could last for years affect us as autoworkers?
Using World Bank projections and analyzing employment trends across several countries, economists for both job sites found the number of people of working age (15 to 65) is set to decline in the coming years. That means hiring will be more difficult and workers will have more leverage over employers.
The decline in people of working age will partly stem from an aging population, the number of deaths exceeding births, and reduced immigration. For example, the U.S. and U.K.’s population growth will be driven solely by net migration. And in the U.K., deaths are projected to exceed births by 2025.
The U.S., U.K., France, and Canada are all projected to see their working-age population decline by more than 3% from 2026 to 2036.
How does a declining number of workers become a factor in the 2023 labor negotiations between GM and the UAW? Basic supply and demand, fewer workers will likely mean a stronger demand for the available labor. This will play a role as both the automakers and the UAW approach negotiations next year.
This basic supply and demand issue will be a consideration in dealing with two other factors, less annual production and the move to increase EV manufacturing.
Rising interest rates, a move to make-to-order sales, and parts shortages are a recipe for less vehicle demand next year. Much has also been written about the 30% fewer workers needed to produce an electric vehicle compared to a vehicle with an internal combustion engine. Both of these issues will be leverage for the automakers.
However, the long term shortage of labor will work strongly to the advantage of the UAW.
Currently, GM is having a difficult time recruiting and keeping workers due to the low pay and lack of benefits as the current labor shortage has exposed the last contract as being insufficient. If GM wants to be able to have the manpower necessary for operations they will need to improve wages, benefits, and working conditions. The long-term labor shortage discussed in the article should be leverage to make the gains necessary to attract talent in the short term, permanent.
All that said, prepare for a strike next fall. If it happens you will be ready. If it doesn’t buy something nice for yourself or your family.
(royalty-free graphic)
