The battle between American workers and technology is heating up
For more for more than 200 years Luddites have received bad news – worse than the British Members of Parliament who voted in 1812 to execute convicted machine-breakers. But even at the time, the rude weavers won great sympathy, including Lord Byron. In “Ode to Framers of the Frame Bill” the poet wrote: “Some have surely thought it a panic / When famine appeals, and poverty groans / Life should be valued at less than stock / And a frame break leads to a bone break.” He used his maiden speech in the House of Lords to urge a combination of “reconciliation and firmness” in deal with the general public, rather than putting off its “superfluous heads”.
Once again, technological upheaval is looming large and there is a widespread feeling that the old ways are in danger of being trampled underfoot by the march of progress. In America two major labor disputes – one imminent, the other ongoing – are, among other things, engaging in potentially seismic transformations caused by Decarbonisation and artificial intelligence (AI).
United Automobile Workers (UAW), representing workers at Ford, General Motors and Stellantis (maker of Chrysler and Fiat), is threatening to strike when labor contracts expire on September 14. In addition to fighting for significantly higher pay, one of his goals is to extend wages and other benefits offered in conventional car manufacturing to people who work on vehicles electricity (EVs), with production typically using more robots and fewer blue-collar workers. Over in Hollywood, writers and actors are at loggerheads with studios over pay and conditions in the streaming era, a dispute that has been clouded by the vexed question of how AI reshaping the industry if new tools can be used to write scripts or simulate actors. Such struggles could shape how workers in other industries view the impact of technology on their jobs.
A new generation of union leaders has come out on the move. Shawn Fain is the first president of the UAW in 70 years to come out of the union ruling clique. He was elected in March by the rank and file, after a years-long corruption scandal that changed the union’s voting procedures. From the beginning, Mr. Fain has cast himself as a firebrand. He publicly threw a negotiation proposal from Stellantis in the bin. (The company’s largest shareholder, Exor The Economist‘s parent company.) Meanwhile, the Writers Guild of America and SAG–AFTRA, which represents actors, went on strike at the same time for the first time in more than 60 years. Fran Drescher, the director of the actors’ guild (and star of “The Nanny”, a 1990s sitcom) has made it clear that the conflict is part of a wider struggle. “The eyes of labor are upon us,” she said in a thunderous speech announcing the strike.
The fights are taking place in an unusual environment that is supportive of the unions. Late last month, more than half of Senate Democrats signed a letter to the “Big Three” automakers arguing that workers at their battery factories should be entitled to the same contract as it was offered to others. UAW members President Joe Biden, who equates “good” jobs with union jobs, has just reinstated a rule repealed during the Reagan administration that will, in effect, raise wages for workers build on government-backed projects. Nationwide, public support for unions is at 71%, the highest level since the mid-1960s, according to Gallup, a pollster. In both Detroit and Hollywood, unions are grappling with popular discontent over ballooning pay. CEOs. Even the Republicans, although strongly anti-union, are trying to rebrand their relationship with workers. American Compass, a conservative think tank, is calling for the creation of worker management committees, similar to European “work councils”, to give workers a say in how business is run.
Some academics argue that workers are right to be wary of technological change. “Power and Progress”, a new book by Daron Acemoglu and Simon Johnson, both of the Massachusetts Institute of Technology, goes through a thousand years of history to argue that new technologies lead to better living. only when they create jobs, rather than just cost. savings, and when opposing forces, such as unions, shape their influence. It is disturbingly techno-optimistic, and at times sounds like a Luddites manifesto.
Speaking to your columnist, Mr. Johnson expresses hope that the UAW and the Big Three can find a way to ensure that they are converted to EVs that does not lead to widespread job losses. He points out that the unions eventually accepted shipping containers, which saved several hours of work at ports but led to an increase in the amount of cargo passing through, preserving jobs and benefits for doctors. In theory, like EV production will increase, prices will come down and more drivers will buy them. If they put their foot on the gas, the Big Three might even be able to reverse the decline in American auto exports, spurring demand for even more workers. large subsidies provided by the Biden administration for promotion EV production provides a rare opportunity for business to regain its initiative.
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In contrast, Mr. Johnson’s prognosis is for writers and actors of his age AI darker, comparing their situation to that of the weavers-cum-Luddites whose work was unnecessary with machines. That view helps to explain why they are trying to reduce the use of studios AI. But the impact of technology on Tinseltown need not be insignificant. By speeding up the writing process, for example, AI could lower costs and allow more content to be created.
Besides, the gales of creative destruction can only be held back for so long. For unions to secure the livelihoods of their members they must work with technological change, not against it. That means using a Byronesque combination of reconciliation and firmness to ensure that it is used to grow the piece for everyone, rather than doubling down on anti-corporation rage. If not they may, like the Luddites, be on the wrong side of history. ■
Read more from Schumpeter, our columnist on global business:
How green is your electric vehicle, really? (August 10)
Meet America’s Most Profitable Law Firm (August 2)
Why Walmart is beating Amazon in the grocery wars (July 24)
Also: If you want to write directly to Schumpeter, email him at [email protected]. And here is an explanation of how Schumpeter’s column got its name.