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UAW points to disparity between CEO and worker pay as a reason for wage hike demand


CEOs at the big three automakers have enjoyed big pay raises in recent years, so why not the workers? Well, that's the argument the United Auto Workers union has put forward in asking for a 40% wage increase. Here's NPR's Andrea Hsu.

ANDREA HSU, BYLINE: In making his case, UAW President Shawn Fain offered a pointed comparison. GM's CEO, Mary Barra, made almost $29 million in 2022. The starting wage at GM's EV battery plant, Ultium Cells, is $16.50 an hour.


SHAWN FAIN: That means a newly hired Ultium worker would have to work full-time for 16 years to earn what Mary Barra makes in a single week.

HSU: Stratospheric CEO pay has been a point of contention for years. Now, it's taking center stage in labor talks, including those ongoing in Detroit. Autoworkers are fed up that the rich are only getting richer while they have seen their real wages decline. According to the Labor Department, autoworkers on the production line have seen wages drop by more than 20% over the past two decades when adjusted for inflation.

DAWNYA FERDINANDSEN: It's a lot more to it than the average person realizes.

HSU: Dawnya Ferdinandsen builds transmissions for Chevy Silverados and other trucks at a GM plant in Ohio. This summer, she was earning $27 an hour - the same as what she was making when she was hired in 2016. While CEOs enjoy their luxury watches and second homes, she says, workers like her face tough choices.

FERDINANDSEN: We got to decide - are we going to pay our electric bill or, jeez, are we going to go over here and get this medication? I mean, we have to make decisions because our pay isn't right.

HSU: That discontent has been brewing since the union made huge concessions after the 2008 financial crisis brought the auto industry to its knees. Workers still feel that deeply today. The car companies, meanwhile, have not only recovered - they've seen their profits soar to the tune of $21 billion in the first half of this year alone.

FERDINANDSEN: What it is that we want is not going to break the bank.

HSU: Decades of outrage over excessive CEO pay has led to some attempts at regulation. Since 2018, the Securities and Exchange Commission has required publicly traded companies to disclose how much their CEOs make compared to their employees. GM last year disclosed that Mary Barra's compensation was 362 times that of the median worker at GM. Ford paid its CEO, Jim Farley, 281 times the median worker. And at companies in other industries, the gap is even greater.

JOSH BIVENS: Obviously, CEOs should be the highest-paid person in an enterprise...

HSU: Josh Bivens is chief economist at the left-leaning Economic Policy Institute.

BIVENS: ...But then the question is exactly just how much higher than everyone else.

HSU: In 1965, CEOs made just 20 times what the typical worker made. But in the 1990s, their salaries became more tied to the stock market, and the stock market's massive gains led to lavish paydays.

BIVENS: That's not a dynamic that pulls up the wages of rank-and-file workers, obviously.

HSU: Well, as the auto talks near the strike deadline, the two sides still appear far apart. As of Friday, the largest offer on the table was a raise of 14.5% over four years, which UAW President Shawn Fain called...


FAIN: Deeply inadequate.

HSU: Now, the UAW has come down slightly on its wage demands, but expectations among its workers are high.

FERDINANDSEN: Blue-collar workers - the working class - has had it.

HSU: Dawnya Ferdinandsen went through a GM strike in 2019 - says it wasn't glamorous. But come Thursday at midnight, if there's no deal, she says, we're ready to walk out again.

Andrea Hsu, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Andrea Hsu is NPR's labor and workplace correspondent.