Strikes by the United Auto Workers and the Hollywood screen Actors’ and writers’ guilds are about more than money. They are a sneak preview of how swift technological change of the fourth industrial revolution is reordering American social and economic reality — and how unprepared we are for it.
For the UAW, the driver is the electric vehicles and batteries of the green transition; for Hollywood’s writers and actors, it is largely about artificial intelligence.
President Biden’s Inflation Reduction Act, essentially a climate bill to accelerate the transition to clean energy — solar, wind, electric vehicles and batteries — is the UAW’s action-forcing event. The act is providing at least $369 billion (some estimates are $515 billion or higher) in subsidies, mostly tax credits for investment and production of wind, solar, green hydrogen, EVs and batteries.
These subsidies have sparked some $240 billion in investment in EV and battery factories across the U.S. But despite President Biden’s promise to create “good paying green jobs,” the UAW, with sound reason, fears the electrification of transport will result in fewer, lower-paying jobs. EVs have less than 20 moving parts — no mufflers, fuel injectors, catalytic converters — and require 40 percent less labor.
Building EV batteries is more labor intensive and may create proportionately more new jobs, but the problem for unions is that EV and battery investment is largely going into non-union, right-to-work states such as Tennessee, Alabama, South Carolina and Texas.
For the UAW, this strike, with leverage afforded by a tight labor market, is mainly about positioning themselves to survive in a brave new world where cars are more like computers on wheels. Also, there is little question the Big Three auto companies are flush with robust profits ($37 billion in 2022) bolstered by Inflation Reduction Act subsidies.
Given the profits and that auto CEOs are paid 399 times the wages of a typical worker, the UAW has a strong case for the substantial wage increases it is seeking. But they may be overplaying their hand with other demands, such as a 32-hour work week for 40 hours pay and some demands on benefits, as Steven Rattner, Obama’s “Car Czar,” recently argued.
One reason is that much of the investment in EV and battery factories by foreign firms such as Hyundai and BMW are in right-to-work states, and the Big Three may have a hard time competing.
China represents an even larger concern about the longer-term competitiveness of the U.S. auto industry in the EV market. Beijing’s heavily subsidized auto industry has become the world’s top EV maker and auto exporter. Will U.S. Big Three automakers (or even Elon Musk’s Tesla) be able to compete — especially after U.S. subsidies fade away?
Like the UAW, the screenwriters’ and actors’ guilds are making demands over wages, working conditions and payment from residuals (series like “Friends,” endlessly syndicated). Most of the writers’ demands were met by a just-concluded agreement. The Screen Actors Guild (SAG) is likely to follow.
But both actors and writers fear an existential threat from AI, which in the case of writers, was addressed by the agreement with curbs against AI use, which is likely to affect the resolution of the SAG strike.
While such fears are quelled for now, the AI issue still looms in the long run. Studios are eyeing AI as a cost-saving device. Writers fear that studios will train AI on scripts that they have written for series and then use the data for AI to write future shows. Actors fear that studios will train AI to use their performances and then use their likenesses for AI-generated performances. How would writers and actors be compensated?
This predicament captures the broader fears of AI displacing humanity despite a lack of governance, and broader concerns of the impact of the technology revolution on American life. Both strikes reflect a social and political failure in adapting education and skills training to a rapidly changing knowledge economy.
This requires rethinking education/skills training and the wider social safety net. One reason there is a U.S. bipartisan disdain for trade agreements (even as Europe and Asia expand them) is the failure to address the consequences. There are always winners and losers from trade — the point is whether there is a net public good, and how to support those harmed by trade or automation if they lose jobs.
The U.S. has a flawed education and skills training system out of sync with a rapidly changing job market, and inadequate trade adjustment assistance to support unemployed workers transitioning to future jobs. One result is several millions of unfilled jobs resulting from a mismatch of skills to jobs.
Perhaps it is time to invent the concept of technology adjustment assistance along with a smarter and less leaky social safety net. It might begin with a national commission comprised of educators, private sector and industry managers to fashion a public-private partnership to align education and skills training with the trajectory of where jobs are going.
There are examples like Singapore’s lifelong learning program and Germany’s apprenticeship policies, that can be useful. The seeds of what could be national programs exist — community colleges are already working with private industry in places like Colorado and North Carolina and other states.
Coupling more substantial unemployment support with such training, and programs like universal daycare to incentivize work could be a path to greater U.S. global competitiveness.
Regardless of their respective outcomes, the UAW and Hollywood strikes are in essence about how America copes with an inflection point of rapid technological change in a maturing knowledge economy.
Robert A. Manning is a distinguished fellow at the Stimson Center. He previously served as senior counselor to the undersecretary of State for global affairs, as a member of the U.S. secretary of state’s policy planning staff and on the National Intelligence Council Strategic Futures Group. Follow him on Twitter @Rmanning4.