Race to the bottom: the destruction of the wages and conditions of US auto workers

Over the past thirty years the Detroit Three auto companies have waged a concerted campaign to retract wage and benefit concessions workers extracted in the postwar period. In a period marked by the globalisation of production, the companies have been driven to increase competitiveness as their market dominance has been whittled away by competition from imports and the entry and expansion of foreign companies or “transplants” with lower cost structures. This paper traces historic reversals for workers including: a two-tier wage and benefit system that has halved the wage rate of new employees, a wage freeze for other workers, and increased flexibility including reductions in work breaks and overtime pay. The paper analyses the role of the employers, the Obama Administration and the United Auto Workers in transforming the U.S. auto industry into a low cost producer capable of attracting work from low wage countries.