Strike pay tough to live on

By Susan Tompor - Detroit Free Press

DETROIT — What does $250 a week in strike pay really add up to these days?

Not a lot at all. UAW strike pay is below the national poverty line, below the Michigan minimum wage and even below what the average retiree gets in Social Security. Even many part-time workers see bigger paychecks than that.

What’s more important: The strike pay for GM workers walking the picket line isn’t even going to arrive quickly.

“Strike assistance pay is available after the 15th day of the strike,” according to a UAW posting online.

“They qualify from the beginning, but have eight days to sign up for the first payment which is distributed on the 15th,” said UAW spokesman Brian Rothenberg in an email.

A bonus check is paid the week prior to Thanksgiving and Christmas holidays, according to the UAW Strike FAQ.

The UAW notes online that the union currently offers strike assistance of $250 a week — or $50 a day Monday through Friday. On Jan. 1, strike pay is set to rise to $275 a week or $55 a day.

Breaking down the numbers, a $250 weekly strike benefit isn’t a lot on many levels.

It’s $6.25 an hour, based on a 40-hour work week. And it would be below Michigan’s minimum wage of $9.45 an hour.

(Even many people working part-time hours would tend to make more than $250 a week. Median weekly earnings for part-time workers in the United States were $271 in 2018, according to the U.S. Bureau of Labor Statistics.)

It’s $1,083 a month. It would be below the average Social Security payment for retirees, which is around $1,471 a month, based on data as of June 2019.

It’s $13,000 a year. And it would be below the national poverty level for a family of four, which is defined as $25,750. (Even looking at just a one-person household, the national poverty level is defined as $12,490.)

All those numbers give some perspective of just how tough it will be for strikers at General Motors to live on strike pay of $250 a week.

“Another way of looking at it is that the $250 a week would barely cover the fair market rent for a two-bedroom apartment in Detroit according to HUD’s Section 8 certificate program,” said Jonathan Smoke, chief economist for Cox Automotive.

“The strike will hurt these workers and the households they live in,” Smoke said. “Likely pushing them to cut back, use credit cards for necessities, and possibly fall behind on some obligations.”

On the plus side, UAW workers who are on strike at GM continue to receive limited health insurance coverage.

“The UAW Strike and Defense Fund covers certain benefits such as medical and prescription drugs,” the union notes online.

“Benefits not covered include: dental, vision, hearing and sick and accident.”

“These benefits are either paid directly by the (strike) Fund according to the company’s current plan or by having the Strike and Defense Fund make COBRA payments to the company plan,” the union states online.

How much families get hurt, of course, will depend heavily on how long the strike lasts.

Some auto experts say this walkout could last more than a day or two.

“Duration is a huge question mark,” said David Whiston, automotive equity analyst for Morningstar.

Whiston says he wouldn’t be shocked if the strike lasts more than a few days or even a couple of weeks.

“I don’t think it goes as long as a 67-day GM strike in 1970 as GM is more global and needs to remain competitive, plus it will be hard for workers to go that long, too,” Whiston said.

He added that “$250 weekly strike pay doesn’t go far when you have housing, food, a car payment, kids.”

“The last UAW strike at GM during contract talks was a less than two day strike in 2007,” Whiston said.

“We think this one will last longer because the UAW is furious about GM’s November 2018 announcement to move four U.S. plants to unallocated status.”

“GM today is in much better financial health than Old GM was in 2007, so we think workers expect GM to be able to offer more … than it has in this summer’s talks,” Whiston said.

Both sides _ GM and the UAW _ have been preparing for months.

“So a short strike, measured in days or a week or two, will not be very disruptive to the U.S. economy,” said Robert Dye, chief economist for Comerica Bank.

“However, a lengthy strike of more than a couple weeks would be disruptive and would potentially ripple through the automotive supply chain,” Dye said.

“A lengthy strike would have a chilling impact on retail sales in Michigan and other parts of the Midwest,” he said. “Most households supported by striking or laid-off workers would have to dip into savings and increase credit card usage within two weeks of the strike date.”

By Susan Tompor

Detroit Free Press

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