Some real costs in the EV revolution

(First published on Fin24)

There was international media coverage this week when President Joe Biden, megaphone in hand, stood on a picket line with striking car workers in Detroit.  Being the first US president to take such action warranted the coverage.  But the strike itself and the issues raised have lessons for workers everywhere.

However, in all the coverage I have seen, the main points that probably decided Biden’s course of action seem to have been missed.  Most reports saw his emergence on a picket line as a pre-emptive strike against Donald Trump who also visited Detroit a day after Biden.  While this may have been a factor, Biden was fully aware that polls have shown that as many as 75% of American voters support the United Auto Workers (UAW) union and their strike.

This is scarcely surprising, despite all the mainstream economic commentary about improvements in gdp, productivity and even claimed jobs. The authoritative Financial Times reported this week, for example, that “There are reasons to believe the [US] economy is primed to deliver robust and durable expansion over the longer term.”  Such improvements and optimism do not apply to most workers and to the now increasingly financially struggling American “middle class”.

It was Vermont’s Democratic Party senator, Bernie Sanders, who highlighted such widespread support for the strike when he addressed the UAW members at the start of the walkout.  A self declared social democrat and 2016 contender for Democratic presidential nomination, Sanders called the strike at all three major vehicle makers a defining moment in US history.  He noted:  “Every worker, white collar, blue collar, in between, has got to stand with the UAW in your struggle for justice.”

That justice starts with wages.  Taking account of inflation, the UAW points out that the buying power of car workers’ pay has fallen over the past 20 years.  Once seen as the apex of better paid workers, UAW members have suffered effective pay cuts of up to 30%.  At the same time, companies have made massive profits and executives have reaped rewards.  

Over the past decade, the major vehicle makers have registered some $250 billion in profits in North America alone.  And while a basic car worker wage is $17 an hour, the three chief executives of the major companies between them were paid nearly $80 million last year alone.  It is a wage and welfare gap that applies globally.

But the workers and their union are also well aware that the world around them is changing; that the move away from internal combustion is gathering pace;  that improved robotics coupled with artificial intelligence — and driven by ongoing private greed — pose serious threats.  They know that the drive to produce new era vehicles can mean the closure of existing plants and the the use of greater automation in regions where labour is cheaper.

And all of this, as Bernie Sanders told the strikers, is counter productive.  He noted:  “When you have autoworkers who cannot afford to buy the cars they make, that is bad for the economy.”

He could, in fact, have quoted Henry Ford who was a pretty rotten boss who hired and fired at will, but who also paid over the odds to those who worked for him. He did so because he understood that the people who built his cars also bought products made by other workers whose earnings would go to buy more products, including cars.  

This was the idea of the “virtuous cycle”, an illusion that ignored the prospect of the of surpluses and the destructiveness of global competition.  For increasing numbers of working people, that illusion has been shattered.  

Unfortunately, among unionised workers the world over, the lesson has not been fully learned.  So action often translates only into a narrow, national outlook:  keep plants open, retain jobs and improve pay, conditions and pensions as “greener” EV transport becomes commonplace.  And, as we are frequently being told,  “green”, EV technology is healthier and good for humanity.

But there are largely hidden and horrendous human costs involved, because, key to the new technology is the battery.  An essential component here is cobalt, 70% of which comes from the Democratic Republic of Congo where, according to the latest United Nations figures, some 40,000 ill fed and under paid children are involved in extracting this metal.

These are facts that auto workers around the world should not only bear in mind, but should take action on.  Perhaps the UAW could revive a demand once made by South African unions:  that no trade should be done with any country or region that did not respect human and union rights.