{"id":2036395,"date":"2023-09-18T18:41:01","date_gmt":"2023-09-18T22:41:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/understanding-how-the-uaw-strike-could-affect-the-us-economy\/"},"modified":"2023-09-18T18:46:52","modified_gmt":"2023-09-18T22:46:52","slug":"understanding-how-the-uaw-strike-could-affect-the-us-economy","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/understanding-how-the-uaw-strike-could-affect-the-us-economy\/","title":{"rendered":"Impact of UAW Strike on US Economy"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Funderstanding-how-the-uaw-strike-could-affect-the-us-economy%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2036395&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<p>The United Auto \u200bWorkers (UAW) strike against the Big Three automakers\u2014Ford, General Motors, and Stellantis\u2014may have far-reaching\u200c effects on the\u2062 U.S. economy, experts warn.<\/p>\n<p>For the first time\u200d in its 88-year history, thousands of UAW-represented members picketed \u2062simultaneously against the\u2063 three auto giants. The union says it will engage in &#8220;stand-up strikes,&#8221; with workers targeting specific factories as they\u200c demand higher pay and better compensation \u2062packages.<\/p>\n<\/blockquote>\n<div class=\"my-5\">\n<p>While the UAW strike\u200c might\u200d appear only to affect the auto sector, market analysts\u2062 warn that \u200bit \u2062could\u2063 have\u2063 consequences for the national economy, depending on a multitude of factors.<\/p>\n<h2>UAW and the US Economy<\/h2>\n<p>S&#038;P Global Market Intelligence analysts \u2064crunched the numbers and \u200dcalculated how\u200d the UAW\u2063 strike at the\u200c Detroit Three could \u2062weigh \u200con U.S. GDP (<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/its-official-trump-crushes-record-for-largest-gdp-increase-in-us-history-3rd-quarter-gdp-up-33-1\/\" title=\"IT'S OFFICIAL: Trump Crushes Record for Largest GDP Increase in US History -- 3rd Quarter GDP Up 33.1%\">gross domestic product<\/a>) over the next 12 months.<\/p>\n<\/div>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<div class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\"><a href=\"http:\/\/www.theepochtimes.com\/article\/us-steel-idles-illinois-furnace-in-response-to-uaw-strike-5493598\">US \u200dSteel Idles Illinois Furnace\u200b in Response to UAW Strike<\/a><\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">9\/18\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\"><a href=\"http:\/\/www.theepochtimes.com\/article\/us-steel-idles-illinois-furnace-in-response-to-uaw-strike-5493598\"><\/a><\/div>\n<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\"><a href=\"http:\/\/www.theepochtimes.com\/us\/uaw-to-resume-negotiations-with-stellantis-after-rejecting-latest-proposal-5493261\">UAW to Resume Negotiations With Stellantis \u200dAfter Rejecting Latest Proposal<\/a><\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">9\/18\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\"><a href=\"http:\/\/www.theepochtimes.com\/us\/uaw-to-resume-negotiations-with-stellantis-after-rejecting-latest-proposal-5493261\"><\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>In one simulation, a 15-week\u2064 strike could trim the GDP growth rate by up to 2.17 percentage points\u2062 in the fourth quarter.<\/p>\n<p>\u201cA lasting strike is looking highly probable. The current political and economic conditions\u2063 increase the odds of \u200ba longer strike,\u201d S&#038;P Global analysts wrote in a report published on Sept. 18.<\/p>\n<p>&#8220;The effects on third-quarter U.S.\u2063 GDP growth \u2064are relatively small,&#8221;\u2063 they \u200dadded.\u200c &#8220;For the fourth quarter, the effects range from small positive contributions to GDP growth to large negative contributions,\u2062 depending on the duration of the strike.&#8221;<\/p>\n<div class=\"shortcode post-related-videos\">\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<\/div>\n<p>Mark \u2063Zandi, \u200dchief economist at Moody&#8217;s Analytics, thinks the effects would be\u200b limited, with a \u2064potential \u2064six-week strike involving all 150,000 union members trimming roughly 0.2\u2064 percent from the fourth-quarter GDP \u200cgrowth rate.<\/p>\n<p>But Mr. Zandi is hopeful\u200d that a strike won&#8217;t last for more than \u200da few weeks, since there is room for compromise.<\/p>\n<p>&#8220;The automakers are \u200denjoying\u200c strong profits, and they need to share them. The workers and UAW need to embrace electric vehicles, and this ultimately \u200cmay mean fewer UAW members,&#8221; he posted \u2064on the social network X, formerly known as \u200bTwitter. &#8220;If this is roughly how events play out, it will be\u2062 a win\u2013win for the companies and workers, and the\u200d economy will \u2064be no worse for the wear.<\/p>\n<p>&#8220;However, if the\u2062 strike lasts \u200dmuch longer, it will be a lose-lose, the economy will \u2064suffer, and both the\u200b manufacturers and \u200dUAW will \u200bbe blamed.&#8221;<\/p>\n<div class=\"my-5\">\n<p>The \u2063Federal \u200dReserve Bank of \u200bNew York&#8217;s Nowcast for the October\u2013December period estimates a 2.4 percent rate of expansion.<\/p>\n<h2>Incomes<\/h2>\n<p>For now,\u200b the\u2062 strikes have been targeted. However, UAW President Shawn Fain\u200d has\u200b warned that \u200ba nationwide strike isn&#8217;t off the table and conditions could escalate if\u2063 the automakers\u2062 fail\u2062 to accept \u200dthe union&#8217;s demands.<\/p>\n<\/div>\n<p>Should the UAW leadership amplify strikes, a \u2062prolonged labor dispute could hurt\u2062 workers&#8217; \u2063wallets, says \u200cGabriel Ehrlich, an economic forecaster at\u200c the\u2063 University of \u2064Michigan.<\/p>\n<p>An estimated \u2064$440 million worth of income could be lost \u200bnationally if all\u200c UAW\u200d members \u2064strike for \u200ctwo weeks. If autoworkers extend their strikes to eight weeks,\u200b more than $9 billion of \u2063income could be evaporated.<\/p>\n<p>&#8220;A short strike would have a small impact, with\u200b limited spillovers into the aggregate economy, regardless of which \u200cautomaker were \u2062targeted,&#8221; \u2062the report stated. &#8220;A prolonged strike or\u200b one involving multiple\u200d automakers, on the other hand, would cause a much larger \u200ddisruption to the national and state economies.&#8221;<\/p>\n<p>The UAW maintains\u2064 a fund for striking workers \u200dof $500 \u2062a week in strike pay. If UAW\u200c and the Big\u2062 Three are at an impasse \u2063and workers can&#8217;t <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/under-trump-americans-have-seen-their-best-wage-growth-in-40-years\/\" title=\"Under Trump, Americans Have Seen Their Best Wage Growth In 40 Years\">make ends meet<\/a> on \u200b$500 per \u200cweek, local economies and businesses could suffer.<\/p>\n<div class=\"my-5\">\n<p>Meanwhile, Deutsche Bank analysts estimate that a work stoppage by all 150,000 UAW workers at\u200d the Big Three would cost each company as much as $500 million per \u2063week.<\/p>\n<h2>A Deepening Manufacturing Recession<\/h2>\n<p>The \u2064U.S. manufacturing sector has been stuck in a recession for all \u200dof 2023 as activity continues shrinking.<\/p>\n<\/div>\n<p>The S&#038;P Global Manufacturing Purchasing Managers&#8217; Index (PMI) has been stuck in contraction territory for nine\u200b of the past 10 \u200bmonths. The Institute for Supply Management&#8217;s (ISM) Manufacturing\u200d PMI also has contracted every \u200dmonth since\u2062 November 2022.<\/p>\n<p>&#8220;The health\u2064 of the U.S. manufacturing sector took a sharp turn for the worse\u2064 in June, adding to concerns over the economy potentially slipping into recession in the second half \u200bof the year,&#8221; said\u2062 Chris\u2064 Williamson, \u200bchief business \u200deconomist at S&#038;P \u2064Global Market Intelligence. &#8220;Factory output declined sharply at the end of the second\u200b quarter, according to the S&#038;P Global PMI, dropping at one of the fastest rates seen over the past 13 years.&#8221;<\/p>\n<p>James Knightley, chief economist\u2063 at ING, thinks the \u200bkey story for manufacturing heading \u2063into\u2063 the fourth quarter \u200b&#8221;will be how much the UAW strike action\u200b hits output.&#8221;<\/p>\n<div class=\"my-5\">\n<p>&#8220;So\u2064 far, it is starting out\u2064 modestly \u200cwith \u200djust 12,700 on strike, \u200cbut could quickly escalate and hit output hard,&#8221;\u200b Mr. Knightley said\u200b in a note.<\/p>\n<h2>Supply Chains<\/h2>\n<p>As many as 12,000 different\u2062 companies are involved in making every car produced\u200c on an \u200cassembly line at a Big \u2064Three automaker. These components are made by more than 5,600 U.S. suppliers, affecting about 700,000 jobs.<\/p>\n<\/div>\n<p>The potential supply\u2063 chain effects\u2062 will depend on the size and scope of the UAW\u200c strike. If the workplace disruption intensifies, it could ripple throughout \u2063automotive \u200dsupply chains worldwide, S&#038;P Global analysts say.<\/p>\n<p>Work disruptions from the GM strike in September 2019\u2064 had a lagging effect, with supply chains facing challenges in subsequent months.<\/p>\n<p>&#8220;Imports of parts from Mexico only started to fall in October, while those shipped by sea did not decline until November. The impact will\u200b be most keenly felt by auto-parts exporters in Mexico (80 percent of whose auto-parts exports go to the \u200bU.S.), Canada (90 percent), and Taiwan (50 percent),&#8221; S&#038;P Global analysts reported.<\/p>\n<p>Automobile inventories, which are \u2062presently below \u2064pre-crisis levels, could take \u2063a hit.<\/p>\n<p>During the September 2019 GM \u2062strike, vehicle production declined by 50 percent compared to the \u2064previous three months. Output\u200c at\u200b other automakers rose by 6 percent\u200b that \u200bsame\u200d month, resulting in limited effects on parts suppliers.<\/p>\n<p>Production hasn&#8217;t been halted at \u2062all \u2063plants\u200b belonging \u200bto Detroit\u2019s \u2064Big Three, just three factories that produce Ford&#8217;s Bronco SUV, GMC Canyon and Chevrolet Colorado midsize pickups, and Jeep&#8217;s Wrangler SUV and Gladiator pickup.<\/p>\n<p>Domestic \u200cauto production \u200dhas \u200ctrended downward since the COVID-19\u2063 pandemic and has failed to return to the\u2064 levels seen since January 2020, according to\u200b the Bureau of\u200c Economic Analysis (BEA).<\/p>\n<div class=\"post-figure\">\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>A Ford \u2062assembly worker\u200b works on \u2064an F-series pickup truck at the Dearborn\u2062 Truck Plant \u2062in Dearborn, Mich., on Jan. 26, 2022. (Rebecca \u200cCook\/Reuters)<\/figcaption><\/figure>\n<\/div>\n<p>The \u200cUAW\u200c strike could also trigger an inflationary \u200cresponse, says Brian Sponheimer,\u2063 a\u200b portfolio manager at Gabelli Funds.<\/p>\n<p>&#8220;Depending\u200d on\u200b the length of the work stoppage,\u2062 supply constraints on key \u2063products could lead to price increases at the dealer\u200d level\u2064 and \u2063eventual increases in used car pricing\u200d as well,&#8221; Mr.\u200b Sponheimer said in a note.<\/p>\n<div class=\"my-5\">\n<p>In August, new vehicle prices rose 0.3 \u2064percent and remain nearly 3\u2062 percent higher than the same time \u200da year ago. Used cars and trucks tumbled 1.2\u2062 percent \u200clast \u200cmonth.<\/p>\n<h2>White House Assessing Economic\u200c Impact<\/h2>\n<p>The White House\u200b says it&#8217;s \u200ctoo soon to determine what\u2063 effects the UAW strike will have on the overall economy.<\/p>\n<\/div>\n<p>Speaking in an interview with CNBC, Treasury Secretary Janet Yellen stated\u200b that the U.S. economy isn&#8217;t showing \u2064any\u200c signs of a looming recession. Many \u2063metrics, such as\u2064 rising\u200c industrial output and\u2063 falling\u200c inflation, \u2062point\u200d to \u2064a\u200b &#8220;healthy&#8221; economic landscape, \u2063she\u2062 said.<\/p>\n<p>In August, industrial output rose 0.4 \u200dpercent month over month and rose to\u2062 0.2 percent year over year. Manufacturing production was \u200bflat last month and is \u2064down\u2064 0.6 percent on an\u200d annualized\u200d pace.<\/p>\n<p>Inflation\u200d has reaccelerated for\u200c two consecutive months, with the Consumer\u200d Price Index (CPI) and \u2063the Producer Price\u2064 Index (PPI) \u200cclimbing to 3.7 percent and 1.6 percent, respectively.<\/p>\n<p>Ms. \u2062Yellen encouraged all sides &#8220;to narrow their disagreements\u2064 and work for a win-win.&#8221;<\/p>\n<p>\u201cIt\u2019s premature to be making forecasts on what it means for the economy,\u201d she said. \u201cIt would depend very much on how long the strike lasts\u200c and exactly who\u2019s affected by it.\u201d<\/p>\n<p>Will the current administration intervene?<\/p>\n<p>Appearing on MSNBC&#8217;s\u200c &#8220;Morning\u2062 Joe&#8221; on \u2062Sept. 18, Mr. Fain said that he doesn&#8217;t see a need for President Joe Biden or the administration to get involved.<\/p>\n<p>&#8220;This is our battle,&#8221; he said. &#8220;Our \u2063negotiating teams\u200b are working hard. \u2063Our members are out there manning\u200c the picket lines. Our allies are out there with us. \u200dThis battle is not about \u2064the \u2063president. It&#8217;s not about the former president. This battle is about the workers standing up for\u200c economic and social \u200djustice and getting \u2064their fair share.&#8221;<\/p>\n<p>President Biden announced on Sept.\u2063 15 that he dispatched Acting Labor Secretary \u200dJulie Su and presidential \u200dadviser\u2062 Gene Sperling to Detroit to help broker a \u2062deal.<\/p>\n<p>&#8220;The companies have made \u200bsome significant offers,&#8221; President Biden \u2063said in prepared\u2062 remarks.\u2064 &#8220;But \u2064I believe they should go further to ensure record\u200c corporate profits mean record contracts for the UAW.&#8221;<\/p>\n<div class=\"my-5\">\n<em>Views\u2062 expressed\u200b in \u2062this article are\u200d opinions of the author and\u2063 do not necessarily reflect the views\u200b of The \u2062Epoch Times.<\/em>\n<\/div>\n<p> <\/p>\n<h2> What indirect effects \u200ccould the UAW strike have on other industries such\u2062 as transportation, logistics, and manufacturing, and how \u200dmight these\u200b sectors experience slowdowns\u200d and layoffs if the strike continues<\/h2>\n<p><span>  .2 billion in lost wages over\u2062 a four-week period, \u200bEhrlich predicts. \u2063This reduction in\u2064 income \u200cwould \u2064have a direct\u2062 impact on \u2062consumer spending, \u200cwhich \u2064is a key driver of economic growth in the United States.<\/p>\n<p>In addition to lost wages, \u2062the strike\u200c could also disrupt the supply chain for the auto industry, \u2064causing delays in the delivery of vehicles and\u200d parts. This could lead to decreased production and \u200dsales for the automakers, \u2063further impacting their profits and the overall economy.<\/p>\n<p>The\u200c UAW strike could also have indirect effects on other industries \u200dthat rely on the\u2064 auto sector.\u2062 For example, the steel industry has already\u2064 been affected, with U.S. \u200bSteel idling one\u200d of its\u200b furnaces in response to the \u2062strike. If the strike continues and\u200c production remains\u2063 disrupted, other sectors such as transportation, logistics,\u200d and manufacturing could also\u200c experience slowdowns and layoffs.<\/p>\n<p>The impact of the strike on the U.S. economy will largely depend on the duration of the strike\u200b and how it is ultimately resolved. If the strike \u2063is resolved quickly and the automakers and \u200dUAW can come to a fair agreement, the effects on the economy\u200c may \u2064be minimal. \u2063However, if the strike lingers for an extended period and escalates into a nationwide stoppage, the consequences could be severe.<\/p>\n<p>As negotiations continue between the \u200dUAW and the automakers, the outcome of this\u2063 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/understanding-how-the-uaw-strike-could-affect-the-us-economy\/\" title=\"Impact of UAW Strike on US Economy\">labor\u200d dispute remains uncertain<\/a>. Both \u200csides have important considerations and demands \u2063that need to be addressed. Finding a compromise\u2064 that meets the needs of both the workers and the companies will\u2062 be crucial in preventing\u2064 further disruption to the U.S. economy.<\/p>\n<p>In conclusion, the UAW strike against \u200bthe Big Three automakers has\u200d the \u200bpotential to significantly impact the\u2064 U.S. economy. The lost\u2064 wages, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-adviser-admits-his-spending-will-cause-inflation-going-to-be-bumps-concerns-very-serious\/\" title=\"Biden Adviser Admits His Spending Will Cause Inflation: \u2018Going To Be Bumps,\u2019 Concerns \u2018Very Serious\u2019\">supply chain disruptions<\/a>, \u200band potential slowdowns in other industries could lead to decreased consumer spending, production,\u200b and overall economic growth. The duration and resolution of the strike\u2064 will determine the extent of the consequences. It is imperative for both the\u200c UAW \u2062and the automakers to reach a fair agreement that addresses the concerns of both parties and \u200bminimizes the negative effects\u2064 on the economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UAW strike on Ford, GM, and Stellantis could impact the US economy, warn experts. This historic event sees thousands of UAW members picketing simultaneously for the first time in 88 years. The union plans &#8220;stand-up strikes&#8221; as workers fight for better conditions. The consequences may reverberate in the months ahead.<\/p>\n","protected":false},"author":278,"featured_media":2036396,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2036395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2036395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2036395"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2036395\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2036396"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2036395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2036395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2036395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}