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    Auto Strike Looms, Threatening to Shut Detroit’s Big 3

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    With their contract expiring Sept. 14, the United Auto Workers and the companies are far apart in talks. A walkout could take a big economic toll.The United Auto Workers union and the three Detroit automakers have less than two weeks to negotiate a new labor contract, and a strike of some sort seems increasingly likely.The union’s president, Shawn Fain, has primed rank-and-file members to be prepared to walk off the job if the union’s long list of demands for improved wages and benefits are not met.A strike against one of the companies, especially a prolonged stoppage, could send an economic jolt through several Midwestern states and crimp the profits of General Motors, Ford Motor or Stellantis. G.M. workers walked out for 40 days in 2019 before reaching an agreement.A strike against all three — a step the union has never taken but one Mr. Fain has said he is willing to call for this year — could have a noticeable impact on the broader U.S. economy.“If that happens, even a short strike would impact economies throughout Michigan and across the nation,” said Patrick Anderson, the chief executive of the Anderson Economic Group in East Lansing, Mich.The talks are playing out as automakers are spending tens of billions of dollars to transition to electric vehicles, which require fewer workers to assemble than traditional gasoline-powered cars and trucks. The terms of the new contract will determine how both autoworkers and the companies fare in an E.V.-centric industry.At the same time, significant wage and benefit gains could provide a tailwind for a union movement that has been gaining strength across several industries.There are political stakes as well. President Biden has declared that “the U.A.W. deserves a contract that sustains the middle class” and has named a White House liaison to the union and the automakers. But the U.A.W. has withheld an endorsement of his re-election bid so far, partly because of concern over the union’s share of E.V.-related jobs created with federal subsidies.An agreement before the contracts expire on Sept. 14 is still possible, and talks could continue beyond that date without a walkout. But Mr. Fain has repeatedly said he views Sept. 14 as a deadline — the day a strike could begin. He was elected to the U.A.W. presidency last year as an insurgent, ousting the incumbent on a vow to take a more combative and confrontational approach in the talks than his recent predecessors.“President Fain has declared war, and that usually means there’s going to be a battle, and that battle would be a strike,” said Sam Fiorani, the vice president of global vehicle forecasting at Auto Forecast Solutions, a market researcher. “The U.A.W. leadership is in a position now where they have to prove to the members that they are fighting for them, so it’s pretty unlikely there won’t be a strike.”The auto industry as a whole, including foreign-owned companies with operations in the United States, makes up about 3 percent of the country’s gross domestic product. A 10-day strike against the three Detroit automakers would result in total wage losses of $859 million and manufacturers’ losses of $989 million, according to estimates by Mr. Anderson’s firm.In August, Mr. Fain sent each company a list of demands, including higher wages, improved benefits, a resumption of regular cost-of-living wage bumps to ward off the impact of inflation and an end to a wage structure that leaves newer hires making a third less than veteran workers. Mr. Fain suggested as much as a 40 percent wage increase, noting that the chief executives of each of the companies had their compensation packages rise substantially in the last four years.He also called for contract provisions that would require the automakers to pay workers to do community service if their plant closes, describing it as a way to deter the companies from shuttering factories and to protect towns and local economies from being ravaged by the loss of a major employer.“The manufacturers can absolutely afford some of those demands, but the more they get, the less competitive the companies are going to be,” Mr. Fiorani said.In a video message streamed on Facebook on Thursday, however, Mr. Fain said the union and the automakers remained far apart. Ford, he said, offered wage increases and other provisions that were “insulting” to the U.A.W.In a statement, Ford said it had offered a 9 percent wage increase and one-time lump-sum payments that, combined, would increase a worker’s income by 15 percent over the four-year contract. Mr. Fain said lump-sum payments helped but did not improve a worker’s income over a long period.The U.A.W. and Ford are also at odds over profit-sharing bonuses, the use of temporary workers, cost-of-living wage increases, retiree health care and several other matters.Mr. Fain said that G.M. and Stellantis had not provided counteroffers to the union’s proposals, and that the U.A.W. had filed a complaint with the National Labor Relations Board contending that the two companies were not negotiating in good faith.An assembly line for the Ford F-150 Lightning electric truck. Automakers are spending billions in the transition to electric vehicles, which require fewer workers to make than gasoline-powered cars and trucks.Brittany Greeson for The New York Times“I know this update is infuriating, and believe me when I say I’m fed up,” he said. “Our goal is not to strike. Our goal is to bargain a fair contract, but if we have to strike to win economic and social justice, we will.”G.M. said it was “surprised by and strongly refutes” the charges in the N.L.R.B. complaint. “We have been hyper-focused on negotiating directly and in good faith with the U.A.W. and are making progress,” Gerald Johnson, G.M.’s vice president of global manufacturing, said in a statement.Stellantis was “disappointed to learn that Mr. Fain is more focused on filing frivolous legal charges than on actual bargaining,” the company said in a statement. “We will vigorously defend this charge when the time comes, but right now, we are more focused on continuing to bargain in good faith for a new agreement.”In recent weeks, workers have organized several dozen rallies and other gatherings to prepare for picketing. “I think the membership is energized,” said Christine Bostic, a battery tester at a G.M. electric vehicle plant in Detroit. “The facts are on our side. If it comes to a strike, I’m ready for that.”To soften the impact of a stoppage, the union has amassed a strike fund of $825 million. It plans to pay striking workers $500 a week and cover their health insurance premiums while they are out of work.In recent days, Mr. Fain has joined the union’s negotiating teams in their talks with each of the automakers, an unusual step. Normally, the U.A.W. president does not take a direct role until the final days or hours of negotiations.On Wednesday, he took part in discussions with Stellantis, where tensions between the two sides have been high. When Stellantis responded to Mr. Fain’s demands with a list of cost concessions it wanted from the union, Mr. Fain took to Facebook to denounce them, dropping the document into a wastebasket.Decades ago, when the U.A.W. had more than a million members and the Big Three — G.M., Ford and Chrysler, now part of Stellantis — had almost no foreign competition, a strike by the union could shut down a significant portion of the United States economy.Today, the union is much smaller. G.M., Ford and Stellantis employ about 150,000 U.A.W. workers, and those companies make only a little more than 40 percent of the cars and trucks sold in the U.S. market.But the union entered this year’s talks in a much stronger negotiating position than it had in years. In the past, the Detroit companies were struggling badly against foreign rivals that operate nonunion plants in the South, like Toyota and Honda, and had a significant cost advantage. In most of the last several contracts, G.M., Ford and Stellantis had to get concessions on wages and benefits to survive.Over the last 10 years, however, all three companies have rung up record profits, thanks in part to the concessions they won from the union as well as the shift in consumer preferences to high-margin trucks and large sport utility vehicles.In the first half of this year, Ford made $3.7 billion and G.M. made $5 billion. Stellantis reported profits of 11 billion euros (about $11.9 billion).In the past, the U.A.W. has chosen one company — it was G.M. four years ago — as the “target” to focus on in the talks. Mr. Fain has said the union could target all three companies this time around, but many analysts think the union will eventually choose Stellantis. In addition to the strains between the company and the union, their talks involve a plant in Belvidere, Ill., that Stellantis has idled and that the union wants the company to reopen.Getting Stellantis to reopen the plant is a critical task for Mr. Fain. Four years ago, G.M. closed a plant in Ohio and the U.A.W. failed in its efforts to push the company to reopen it. In his campaign for the presidency, Mr. Fain promised members that his tougher approach would prove successful this time.The union could get a hand in this battle from the federal government. On Thursday, the Energy Department said it had made $2 billion in grants and $10 billion in loans available to auto companies to convert existing factories that build gasoline-powered cars and trucks into plants that produce hybrid and electric vehicles.Stellantis, like G.M. and Ford, aims to introduce several more electric models over the next few years and will probably have to retool some plants to make them. It is already building a battery plant in Indiana for its E.V. push.Mr. Fiorani suggested that Stellantis could decide to overhaul the Belvidere plant to make electric models. “Stellantis could find a product to go in there,” he said. “For the U.A.W. to truly win something, though, it has to be electric vehicles that Stellantis would plan on making for several years.” More

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    Impact of Hollywood Strikes on Jobs Goes Beyond the Strikers

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    Walkouts by screenwriters and actors have meant less work in fields that cater to the TV and film industry.One reason the August employment report wasn’t stronger: Television and movie production has largely halted since a deadlock in contract negotiations between major studios and unions that represent screenwriters and actors.The motion picture and sound recording industry subtracted 16,800 jobs in August. That’s not a huge share of its approximately 438,000-person work force, but it underestimates the total impact of the labor stoppages, given how much spending power the film industry creates in Los Angeles specifically.The shutdown started when 11,500 members of the Writers Guild of America went on strike in May. In the second quarter alone, according to Los Angeles’s film office, activity was down 28.8 percent from a year earlier.The stoppages spread when SAG-AFTRA, which represents more than 160,000 actors and broadcasters, struck in July after its contract with the largest film and television studios expired.Striking actors and writers, however, don’t translate one for one into payrolls. For one thing, many of SAG-AFTRA’s members work for television news stations and aren’t on strike. Those who do act in movies and TV shows usually sign contracts, sometimes for a day or a week, rather than entering into a continuing employment relationship.Between intermittent gigs, they’re used to taking second jobs, like waiting on tables or designing websites. During the strike, they’re also allowed to work in theater and commercials, as well as on a handful of independent projects that have agreed to abide by the union’s demands.Even with no work, most earn at least some money through residuals — although that revenue has shrunk with the rise of streaming, and will fade as the months drag on.“We’re used to being freelancers, and just being able to go along,” said Jodi Long, president of SAG-AFTRA’s Los Angeles local. “For now, what’s really going to affect the job market is the people on set — the hair and makeup people, the gaffers and the grips and the people in production.”Ms. Long is right: The support services required to make movies and shows have largely shut down. Some serve other industries as well, but many have grown up around the needs of film production. Even if the industry becomes very busy when the strike ends as studios restock their pipelines, months of income will be hard to replace.Take Limelight Catering. Its owner, Steve Michelson, mostly mothballed the business in May when the writers’ strike started, laying off 50 staff members, nearly all of them represented by the Teamsters. Since then, he has been repairing trucks and doing other maintenance at his facility in the northern reaches of the Los Angeles area.“We’re kind of the side effect,” Mr. Michelson said. “We depend on the film industry, but we get nothing out of this. The actors and the writers, hopefully they’ll get a nice raise, but we get nothing out of it.”Unlike striking workers in California, those who lose their jobs as collateral damage of labor disputes are eligible for unemployment insurance. (New York State does allow workers on strike to collect unemployment checks.)That’s what most of Mr. Michelson’s workers are doing. Many of those who were in more physical jobs, like carrying heavy cameras and lights around, are using the time to take care of occupational injuries by claiming disability benefits.Bill Bridges, a member of the International Alliance of Theatrical Stage Employees, has worked as a grip for 25 years. Getting through the Covid-19 shutdown was hard enough, he said, and then he needed a year off for a total knee replacement. During that time, Mr. Bridges became licensed to drive a truck, and applied for jobs with the long-haul freight lines — but he said they paid only $650 a week for someone with no experience.After recovering from surgery, he was able to drive film trucks, and sometimes earned $1,600 a day. That stopped when the talent went on strike. This time, he’s back on disability to get bunion surgery.Mr. Bridges supports the strikers, but said he was way behind on bills, barely sustaining his wife and 11-year-old son. The union has started a mutual aid food pantry and a GoFundMe appeal for its members.“This is probably financially the lowest point in my life,” he said. He worries about his own union’s contract negotiations, coming up next year: “If there’s another strike, I don’t know what I’m going to do.” More

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    West Coast Dockworkers Ratify Contract

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    The six-year agreement is expected to increase traffic at Pacific ports, which had sagged because of the prospect of a walkout.Dockworkers at ports along the West Coast have ratified a new contract, securing a sweeping agreement set to last six years and expected to ease tensions after cargo shipments were diverted to other regions.The contract between the International Longshore and Warehouse Union and the Pacific Maritime Association, which operates the terminals, covers 22,000 dockworkers at 29 ports from Los Angeles to Seattle.The contract was approved by 75 percent of members who voted, the union said late Thursday. Details of the agreement were not released publicly, and the union declined to comment. Unionized workers at the ports have average salaries in the low six figures.The maritime association did not respond to a request for comment.The two sides announced in June that they had reached a tentative agreement after a year of negotiations that prompted intervention from the Biden administration and coincided with a decline in the volume of cargo at several major ports along the West Coast.During the negotiation period, as workers staged a series of slowdowns, including at the twin ports of Los Angeles and Long Beach, some shipping companies diverted freight to ports along the Gulf and East Coasts and then never returned to their old routes.And the movement of goods continued to lag into the summer.At the Port of Los Angeles, the amount of cargo imported in July was down 25 percent from a year earlier. But at Port Houston, where some companies rerouted cargo, officials reported its best July on record in processing cargo.Geraldine Knatz, a former head of the Port of Los Angeles and now professor of the practice of policy and engineering at the University of Southern California, said she expected the contract’s ratification to give some shippers the level of comfort they needed to return to their old routes.“Everyone is expecting we will see an increase in volume,” she said of cargo handled on the West Coast.Matthew Shay, president of the National Retail Federation, said the West Coast ports played a critical role in the vitality of the business community nationwide.“Now that an agreement has been ratified by all parties, the millions of businesses and employees who rely on their operations can be assured that long-term stability will remain at the West Coast ports,” Mr. Shay said.Santul Nerkar More

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    Wages Rose Only 0.2% in August, Easing Inflation Fears

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    American workers got smaller pay increases in August. That could be welcome news for policymakers at the Federal Reserve.Average hourly earnings rose 0.2 percent from July, the slowest pace of monthly growth since early last year. Pay was up 4.3 percent from a year earlier, versus a peak growth rate of nearly 6 percent in March 2022.The earnings data is preliminary and can be skewed by shifts in the industries that are hiring, among other factors. But the slowdown in wage gains is consistent with other evidence suggesting a gradual cooling in the labor market. Employers are posting fewer job openings — a sign of reduced demand for labor — and workers are changing jobs less frequently, a sign they are also becoming more cautious.For workers, the pain of slower wage growth is being offset, at least to some degree, by cooling inflation. Price increases outpaced pay gains for much of last year, but that trend has since reversed. Pay, adjusted for inflation, has risen in recent months; the Labor Department will release August price data later this month.For policymakers, a cooler pace of wage growth — if it is sustained — would be an encouraging sign that the labor market is coming off the boil. Fed officials have been worried that rapid wage gains, while not responsible for the recent increase in prices, could make it difficult for inflation to return to their long-term goal of 2 percent per year. The data released Friday suggests that the labor market is returning to balance — though hourly earnings are still rising faster than many economists consider sustainable in the long term.“While wage growth remains well above the Fed’s comfort zone, recent data points to a gentle moderation in labor cost pressures amid signs of labor market rebalancing,” Gregory Daco, chief economist for EY, wrote in a note to clients. More

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    Fed Officials Will Parse Jobs Numbers to Assess Economy’s Momentum

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    Federal Reserve officials are likely to closely watch employment numbers on Friday for further signs that the economy’s momentum is slowing, an important consideration for them in deciding whether to lift interest rates further.Fed policymakers have sharply increased borrowing costs over the past year and a half, to a range of 5.25 to 5.5 percent, from near-zero as recently as March 2022. Those moves were meant to slow the economy by making it more expensive to borrow to buy a house, purchase a car or expand a business.Now, central bankers are contemplating whether they need to raise interest rates one more time. Policymakers had previously forecast another move before the end of 2023.Most investors do not expect any increase to come at the Fed’s next meeting on Sept. 19-20, but officials have not ruled out a move. And even if central bankers leave rates unchanged in September as markets expect, policymakers will release a fresh set of economic projections showing how they expect the labor market, inflation and interest rates to shape up over coming months and years.That’s where incoming data reports — including the fresh jobs figures — could matter. Employers have been hiring at a surprisingly steady clip this year, given how much the Fed has raised interest rates. Policymakers will be gauging whether that trend continues to slow.And Fed officials will devote attention to how quickly wages are climbing.Central bankers have de-emphasized pay gains as a potential driver of inflation in recent months, suggesting instead that rapid wage growth probably signals that workers are trying to catch up with past inflation. Even so, many standard economic models suggest that if pay is climbing steeply, it could be hard to fully snuff out rapid inflation. Companies facing heftier labor costs will probably try to charge more to protect their profits, and workers who are earning more may find themselves capable of and willing to pay higher prices.Jerome H. Powell, the Fed chair, recently highlighted slowing jobs growth, stable hours worked and slowing pay gains across a range of measures as signs that the labor market is getting into a better balance.“We expect this labor market rebalancing to continue,” he said, speaking last week in Wyoming. But, he warned in the speech, the Fed is watching to make sure the economy doesn’t heat back up in spite of higher interest rates, a development that could mean that borrowing costs need to go higher.“Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response,” Mr. Powell said. More

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    Labor Dept. Proposes Vast Expansion of Overtime Eligibility

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    The Biden administration seeks a threshold of about $55,000 in annual pay under which salaried workers must receive overtime, up from $35,500.In a move that could affect millions of workers, the Biden administration announced Wednesday that it was proposing to substantially increase the cutoff below which most salaried workers automatically receive time-and-a-half overtime pay.Under the proposed rule, issued by the Labor Department, the cutoff for receiving overtime pay after 40 hours a week would rise to about $55,000 a year from about $35,500, a level that was set during the Trump administration.About 3.6 million salaried workers, most of whom fall between the current cutoff and the new one, would effectively gain overtime pay eligibility under the proposed rule, the department said.Julie Su, the department’s acting secretary, said in a statement that the rule “would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections.”The department estimated that the rule would result in a transfer of $1.2 billion from employers to employees in its first year.Some industry groups, particularly in retail, dining and hospitality businesses, have argued that expanded overtime eligibility could lead many employers to convert some salaried workers to hourly workers and set their base wage so that their overall pay, with the usual overtime hours, would be unchanged.These groups argue that vastly expanding overtime eligibility could also discourage employers from promoting workers to junior management positions that provide a path to well-paying careers, because more employers would be compelled to pay junior managers overtime when they worked long hours.“To prevent these employees from triggering new overtime costs, many small businesses will be forced to demote them back to hourly wage earners, reversing their hard-earned career progression,” Alfredo Ortiz, the president and chief executive of Job Creators Network, a group that promotes the interests of small businesses, said in a statement.The proposal follows a similarly ambitious move by the Obama administration in 2016, which sought to raise the overtime cutoff for most salaried employees to about $47,500 from about $23,500. But just before Donald J. Trump took office as president, a federal judge in Texas suspended the Obama rule, concluding that the Labor Department lacked the legal authority to raise the overtime cutoff so substantially.The Trump administration later installed the $35,500 limit.Under the Biden administration’s proposal, the overtime limit would automatically adjust every three years to keep pace with rising earnings. The Labor Department will accept public comments for 60 days before issuing a final version of the rule.Advocates of a higher cutoff argue that one key benefit would be to prevent employers from misclassifying workers as managers to avoid paying them overtime.Under the law, employers do not need to pay overtime to workers who make above the salary cutoff if they are bona fide executives or managers, meaning that their primary job is management and that they have real authority.But research has shown that many companies illegally deny workers overtime by raising their salaries just above the overtime cutoff and simply labeling them managers, even if they do little managerial work.Because the legal definition of an overtime-exempt manager can be somewhat subjective, and because many salaried workers aren’t aware that they are eligible for overtime pay if they make more than the cutoff, they typically do not challenge employers who game the system in this way. The result is that many assistant managers at fast food restaurants or retail outlets have been denied overtime pay even though the law typically required that they receive it.Raising the salary threshold would make this practice less common by eliminating the subjectivity in determining which workers should receive overtime pay. Instead, many workers — like assistant managers in restaurants — would become eligible for overtime automatically, no matter their job responsibilities.The proposal is the latest effort by the Biden administration to increase pay and protections for workers. President Biden has been outspoken in his support of labor unions, and issued an executive order requiring contractors on federal construction projects worth more than $35 million to reach agreements with unions that determine wages and work rules.The major climate bill that Mr. Biden signed last year included incentives for clean energy projects to pay wages that are similar to union scale.But the proposed overtime rule could face legal challenges like the ones that derailed the Obama-era rule, suggesting that the president’s rationale for the proposal may be as much about communicating his support for workers during the 2024 presidential campaign as it is about significantly expanding eligibility for overtime.In an interview this year, Seth Harris, a former deputy labor secretary who recently served as a senior labor adviser to Mr. Biden, said some administration officials worried that a judge would set aside the rule, but added, “There are others whose offices are physically closer to the president who say, ‘No, no, no, this District Court judge doesn’t tell us how we do our business.’” More

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    Job Openings Dropped in July as Labor Market Cooled

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    The NewsThe number of job openings continued to drop in July, the Labor Department reported Tuesday, another sign that the U.S. labor market is losing its momentum.There were 8.8 million job openings last month, down from about 9.2 million in June and the lowest level since March 2021, according to the Job Openings and Labor Turnover Survey. The amount of people quitting their jobs, a measure of workers’ confidence in the job market, continued to nudge down in July as well.A job fair in Minneapolis last month.Tim Gruber for The New York TimesWhy It Matters: Implications for interest-rate policy.Labor market data is closely watched by policymakers at the Federal Reserve as they combat stubborn inflation.“For workers, this looks like fewer opportunities — if you leave your job now, you’re less likely to land a better one than you were last year at this time,” Elizabeth Renter, a data analyst at the personal finance site NerdWallet, said in an email statement. “For the Fed, this likely looks according to plan.”Fed policymakers lifted interest rates to a range of 5.25 to 5.5 percent in their last meeting in July, the highest since 2001. Only one Fed meeting has passed since March 2022 where the central bank has not raised rates. Some investors hope that signs the labor market is continuing to cool will push the Fed to end its campaign of rate increases sooner.Jerome H. Powell, the chair of the Federal Reserve, signaled on Friday that the central bank was not ruling out more rate increases.“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Mr. Powell said at the Federal Reserve Bank of Kansas City’s annual Jackson Hole conference in Wyoming.The new data is likely to be welcomed by the Fed, said Layla O’Kane, a senior economist at Lightcast, a labor market analytics firm. It shows that what the Fed has been doing is working, but policymakers are not likely to declare their mission accomplished just yet, she said.“This is a really good sign for a cooling labor market, but it’s not a cool labor market yet,” Ms. O’Kane said. “There’s some way to go before we think we solved some of the labor market tightness.”Background: A surprisingly robust labor market.The U.S. labor market has defied expectations by remaining strong despite the Fed’s mission to slow down the economy by raising interest rates.Consistently strong labor data initially fueled predictions that the Fed would continue rate increases until the economy fell into a recession. Many have taken a more optimistic view recently as inflation has begun to moderate alongside a strong labor market.Employers are starting to feel the effects of high interest rates, said Julia Pollak, chief economist at ZipRecruiter. Companies are being more judicious in their hiring even if they need more people, in part because of the high cost of labor, she said.“With interest rates this high, some investments don’t pencil out,” Ms. Pollak said. “Businesses that would have opened another location or invested in another truck or another warehouse are taking it slow.”What’s Next: The August jobs report on Friday.The August employment report will be released by the Labor Department on Friday.The unemployment rate dropped to 3.5 percent in July, a sign that although the labor market is cooling, workers are generally still able to find opportunities. The unemployment data for August will be one of the last labor market pulses that Fed policymakers will get before their next meeting on Sept. 19-20. More