President Joe Biden tours the North American International Auto Show with GM CEO Mary Barra in Detroit on Sept. 14, 2022. (Andrew Roth | Michigan Advance)

The United Auto Workers union’s strike against the Detroit Three for higher wages, more paid time off, and the elimination of tiered workers, which is in its fourth week, has drawn attention to the vast differences in pay between autoworkers and executives at auto manufacturers.

The union has frequently spoken out about the gulf between CEO pay and worker pay to argue that the auto manufacturers can afford to increase wages for autoworkers.

“They’re absolutely rolling in the money. They’re competing for who gets the biggest executive compensation package,” said Shawn Fain, president of the UAW, in a YouTube video about CEO compensation uploaded last week.

In 2022, all three CEOs made above $20 million. General Motors CEO Mary Barra’s compensation is $29 million, the highest of the big three automakers, followed by Stellantis’ Carlo Tevares at $25 million and Ford’s Jim Farley at $21 million.

What’s behind UAW’s argument for higher pay

Fain has also pointed to the 6% pay increases autoworkers received since their 2019 contract compared to the 40% rise in automaker CEO pay to make his argument for the union’s pay demands.

Cindy Schipani, professor of business administration and professor of business law at the University of Michigan, told States Newsroom over email that this 40% rise in CEO pay in the auto sector in the last four years has set up an opportunity for the UAW to call out a lack of fairness as they negotiate.

“The union seems to be arguing an equity issue, especially in light of the sacrifices the workers needed to make in past negotiations,” she said. “Of course, the CEO’s job isn’t comparable to the job of the average worker, but I suspect the UAW may believe it has some leverage. If the company can afford to raise the salary of the top executive at roughly 40% over 4 years, why not also grant the rank and file similar increases.”

Autoworkers who are responsible for motor vehicles and parts manufacturing received an average hourly pay of $28 an hour in September, according to the Bureau of Labor Statistics. But autoworker pay can vary a lot between different tiers of autoworkers. Some autoworkers are temporary or “supplemental” workers, even if they have worked at a plant for many years, and receive a lot less pay. The UAW wants to end the tiered system as part of its contract demands.

“The CEO to average worker pay ratio in the big 3 auto companies appears to be in line with the average ratio across the largest 500 public companies in the U.S., which averages just under 300%,” Schipiani said.

Although overall CEO compensation fell 14.8% in 2022 because of a stock market decline, CEO pay soared 1,209.2% from 1978 to 2022 versus typical workers’ pay, which rose 15.3% during the same period, according to an Economic Policy Institute analysis released in September. The progressive think tank makes the case that the increase in CEO pay is not harmless to the average worker and states that workers in the bottom 90% would have 25% higher wages today if not for the vast differences in wage increases from the 1970s to 2021.

Fain has also emphasized auto manufacturers’ profits as another reason the companies should be able to afford higher wages for UAW members. Although all of the big three automakers suffered losses in annual gross profit from 2019 to 2020, in the long run, the companies’ profits have shot up in the past decade while autoworkers’ wages have fallen. From 2013 to 2022, profit at Ford, Stellantis, and General Motors rose 92%, according to the Economic Policy Institute, a left-leaning think tank.

From 2008 to 2023, average hourly earnings for people working in auto manufacturing sank 19.3% and wages for workers responsible for both auto manufacturing and vehicle parts fell 10%, the EPI analysis showed.

The latest developments in the UAW strike

As the UAW continues to push for higher wages and other benefits, it has shifted its strategy. On Oct. 11, the UAW expanded its strike to Ford’s most profitable plant in Louisville, which employs nearly 9,000 autoworkers.

The union has already gone on strike in several big three auto company plants, including in Michigan, Ohio, Missouri, and Illinois. On the same day, Ford responded to the escalation in a statement in which it called the UAW action at the Kentucky plant “grossly irresponsible.” The auto manufacturers have responded to the demand for a 46% pay increase with offers ranging from a rise in pay of 21% to 23%.

Leading up to and during the course of the strike, UAW leadership has scheduled its major announcements on labor actions for Fridays. But last Friday, Fain did not announce any new strike actions. He said the strike will enter a new phase where the strike could be expanded at any time.

“Moving forward, we will be calling out plants when we need to with little notice. Stay ready, not just Fridays, not just Ford. Together, we’re making history and together, we’re going to stand up and win what we deserve,” he said.

In response, Ford put public pressure on the UAW to deescalate the labor fight. On Monday, Bill Ford, executive chairman of Ford, held a press conference in which he argued that the strike would only aid its competitors at Toyota, Tesla and Honda, and hurt the American automobile industry.

Ford said, “We can stop this now. I call on my great UAW colleagues, some of whom I have known for decades. … We need to come together to bring an end to this acrimonious round of talks.”

How individual workers are faring under the current pay system

While UAW and big three auto manufacturers decide how to move forward at the negotiating table, UAW members like Tenisha Hodges are hoping that they will eventually earn enough money to comfortably support their families.

Hodges, 45, a supplemental worker at the Stellantis’ Jefferson North Assembly Plant in Detroit, said she and her husband, a cook and a stockperson at a supermarket, struggle to support their household on the wages she makes at the plant. She said she started working at the Stellantis plant three years ago because her uncle, who worked for Ford and retired in the late ‘80s, made decent money and she thought that a job as an autoworker would offer her a similar path.

“I expected to have that same type of lifestyle, not to be rich but to be able to provide for just the simple things, and for the corporate company to tell me we don’t have any full-time positions open to roll you over, yet almost three years I have been working full-time hours. The math isn’t adding up,” she said.

Hodges said she has another job as a contractor for Amazon making deliveries so that she can provide for her family, which includes five children from age 16 to 26 who she said all live at home. She works 60 to 70 hours a week at the plant making $17.53 an hour but still works another five hours at Amazon a few days a week to help her household pay for rent and utilities, which she said are particularly large expenses for her family.

Despite the fact that auto-manufacturing work has resulted in carpal tunnel syndrome in both of her hands and achilles tendinitis, Hodges said she is reluctant to leave in case she becomes a full-time worker and receives more pay, and eventually, lighter work.

“I don’t want to leave, because I’ve already spent so much time that if I leave and turn around and we get turned to full-time then that would be even more upsetting,” Hodges said. “What I was working for finally happened and I’m not there to receive it. You’re in between a rock and a hard place.”