The UAW strike’s toll on the US economy reaches $1.6B.

UAW strike has already cost the US economy $1.6B

The United Auto Workers (UAW) strike began on September 16th and already has cost the U.S. economy $1.6 billion, affecting everything from auto sales to manufacturing. With no end in sight, job losses, and wage cuts, the UAW members continue to stand their ground, demanding fair wages, better benefits, and an end to outsourcing. But what caused this strike, and how has it impacted the economy on a local and national level?

Background of the Strike

The current UAW strike has affected nearly 50,000 workers at General Motors (GM) plants in the United States. This is the first time that the UAW has gone on strike in 12 years, with the last strike affecting GM for only two days. However, this UAW strike is more complex, and the situation is more severe. The workers are asking for a salary increase, the reinstatement of healthcare benefits, and an end to outsourcing. Additionally, the union wants to convert temporary workers to full-time employees and improve the pensions of longtime workers.

Despite negotiations between the UAW and GM, there has been no deal on the table yet. The latest report like Reuters had shown that the UAW is negotiating with Ford, who agreed to the same terms as GM but with a more substantial salary increase. The UAW is still fighting to achieve the same agreements for their members with GM.

Impact on the Local and National Economy

The UAW strike had such an adverse impact that it could derail the U.S. economy due to many reasons. The GM strike alone had closed over 50 auto manufacturing plants and had halted the production of many auto parts suppliers. Moreover, companies outside the auto industry, such as logistics companies who depended on GM’s shipments, were also affected.

The UAW strike has a direct impact on the local economies of cities and towns where the GM plants are located. One example is in Flint, Michigan, where GM workers make up a significant portion of the population, and the strike has caused a ripple effect through local businesses. Restaurants, convenience stores, and other small businesses that depend on the income from workers have seen a significant reduction in revenue. This reduction in workers’ cash supply means less disposable income, which translates to a decrease in purchasing power and lesser demand for goods and services.

However, the impact of the UAW strike is not confined to one locality or town; it affects the national GDP as well. Plant closures and disruption in supplies have affected the auto industry’s manufacturing, in turn affecting many other related industries, causing job losses and causing a decline in consumer confidence. The significant effect of the General Motors plant closure is visible in the country’s auto sales, which fell 7.2% in September.


The UAW strike has caused a loss of more than $1.6 billion, which includes an estimated cost of $2.26 billion in lost earnings for GM workers and Titan Simulation Group’s estimated loss of $835 million in GM’s profits. So far, the strike has lasted for more than 34 days, and even with payroll protections, the economic impact is significant. Furthermore, the strike’s ripple effect on suppliers, dealerships, and surrounding communities is immense.

Many GM suppliers have cut production, laid workers off, or had to close their factories temporarily as the strike has frozen their supplies. The supplier’s workers have initiated a domino effect throughout different industries as lesser demand for their goods has halted their productions. This effect is felt nationwide as most of GM’s suppliers are located in the Midwest.

Wage Cuts

The UAW members’ current salary is roughly $30 per hour, which consists of a wage boost that occurred in 2015. The UAW wants more than 5% wage increase for all seniority-level workers and a pathway for temporary workers to become permanent workers. However, they agreed to have annual pay increases of 3% in 2019 and 2021 and 4% increase in 2022, respectively, among other benefits with Ford.

When there are wage cuts or wage stagnation, there is often a decrease in customer spending and a reduction in wealth. When workers take a pay cut, they usually reduce their spending and financial investments, as well as a reduction in saving. Such behavior may lead to significantly decreased consumer confidence in the future, which can cause a significant impact on the economy.

Job Losses

One of the significant effects of the UAW strike is job losses. While GM has informed its employees that it is committed to maintaining its workforce, many of its suppliers are not so lucky. Delphi Technologies recently announced that it had to cut 450 workers from its workforce amidst decreasing revenues, reportedly due to the General Motors strike. This is just one example of many suppliers that have had to cut jobs due to the UAW strike, which can have a massive impact on the local communities and the U.S. economy as a whole.


In conclusion, the UAW strike is an essential issue for the workers, as they demand better salary, benefits, and more job security. However, this strike is affecting the local and national economies in significant ways. The loss of wages, jobs, the halt in manufacturing, and decrease in consumer confidence are the immediate effects of the UAW strike. The workers’ demands for fair wages, benefits, and job security is justified, and it is essential to reach a positive agreement that benefits both the company and its workers. The UAW and GM need to come together and solve the concerns for the workers, which would lead to an early end to the UAW strike and lead to significant benefits for the economy.

Joseph Hubbard

Joseph Hubbard is a seasoned journalist passionate about uncovering stories and reporting on events that shape our world. With a strong background in journalism, he has dedicated his career to providing accurate, unbiased, and insightful news coverage to the public.

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