Understanding Modern Labor Movements

The Writers Guild of America strikes in New York City amidst inflation and inadequate compensation (John Edwards, Wikimedia Commons)

Global inflation has significantly impacted labor movements, especially in the U.S. Two recent strikes in the country were in response to alleged inadequate compensation amidst the rising cost of living. This issue is not a recent development—the treatment of laborers has been a topic of debate among workers and owners for decades. However, the current economic crisis has amplified workers’ discontent and emboldened them to question the established working conditions imposed by CEOs and high-level management.

Writers Guild of America Strike

The Writers Guild of America West and the Writers Guild of America East unanimously voted to initiate a strike against the Alliance of Motion Picture and Television Producers (AMPTP) on May 2, marking the first official writers’ strike in fifteen years. Similar to the 2007-2008 strike the current strike revolves around pay distribution, with writers demanding a larger share of revenue from digital media platforms and streaming services. At the heart of both strikes is the issue of fair compensation for writers’ work. The 2023 strike, however, also encompasses concerns about the impact of new technologies, such as artificial intelligence (AI), on writers’ livelihoods.

Many writers have referred to residuals as the “magic check” because, before the rise of digital streaming, TV shows were sold to multiple cable companies, ensuring that writers were compensated for their work being reused. However, most movies and shows now remain exclusive to a single streaming platform for the rest of their lifespan. This means Hollywood writers are increasingly forced to take on multiple jobs to compensate for lost residuals. This trend is accelerating due to streaming services producing fewer episodes and seasons per TV show. Writers have proposed a viewership-based residual as a solution, but the AMPTP rejected the WGA’s solution.

Another issue brought forth by WGA is pay distribution issues. The WGA proposed a set number of writers and a set duration of time to work on a project. The AMPTP countered, arguing that the WGA’s proposal was a hiring quota that was unrealistic and impractical in the creative industry. Additionally, the AMPTP argued that the WGA’s “one-size-fits-all” solution did not take into account the unique needs of different shows and creative teams.

A final key issue in the strike is the use of AI. Writers have repeatedly expressed their concerns that AI is being used to reduce the number of writers needed on a project, which limits their earning opportunities. However, everything created by AI is considered public domain, meaning studios cannot claim ownership of it, making it a less valuable investment. Furthermore, experienced industry professionals have pointed out that AI is not yet creative enough to produce unique and original shows, but rather regurgitates old and basic ideas.

The Solution for the WGA Strike

The WGA board accepted a new deal on September 27, ending the second-longest strike in Hollywood history. The strike has cost the California economy an estimated $3 billion.

In the agreement summary released by WGA, writers who work on content with a budget of at least $30 million and are made for streaming services will experience an 18 percent pay increase and a 26 percent increase in base rate (used for calculating residual payments). For writers who work on TV series, staff writers will be paid 5 percent more per week and editors 3.5-4 percent.

As for the issue of AI in this strike, WGA secured the concession that AI-created material cannot be considered literary work written by humans and that companies cannot force writers to use AI software while working. WGA also asserted that they have the right to “assert the exploitation of writers’ material to train AI is prohibited by MBA [minimum basic agreement].”

The United Auto Workers Strike

The strike of the United Auto Workers (UAW) against three major automakers, General Motors (GM), Ford, and Stellantis N.V., went into effect on September 15, 2023. Similar to the Hollywood writers’ strike, the autoworkers’ strike was motivated by inadequate compensation, but in this case, it was also due to the sacrifices that workers had made during previous bankruptcies. The strike began when UAW members voted 97 percent in favor of authorizing it. As the labor contract expired in September, UAW members walked out of three assembly plants: Stellantis’ Ohio Plant, Ford’s Michigan Plant, and GM’s Missouri. The goal of the strike was to disrupt car production while simultaneously allowing enough workers to leave so that they could receive pay from the companies instead of strike benefits from the union.

As this strike continues, the UAW’s President Shawn Fain warned that he would order workers to leave their jobs if the companies did not make significant progress on providing better benefits. The union’s original demands included a 40 percent wage increase over four years, reinstatement of pensions, and shorter work hours to improve productivity. To further pressure GM to reach a beneficial deal, the UAW expanded its strike in Tennessee, with 4,000 union members walking off the job. GM expressed disappointment with the additional strike, claiming it was unnecessary “in light of the progress we made.”

What Are The CEOs’ Responses? What Does it Mean For the Workers?

GM’s CEO Mary Barra told CNN in an interview that she has offered an agreement with nearly $29 million in compensation to resolve the workers’ strike and reward them for their sacrifices during the previous bankruptcy. However, after negotiations with UAW, GM and UAW reached a new deal that secures a 25 percent pay increase up until 2027.

Ford’s CEO Jim Farley admitted following the start of the strike that UAW’s initial proposal to increase pay wages by 40 percent would lead the company to bankruptcy. Nonetheless, Ford and UAW were able to reach a tentative deal by late October that included at least a 30 percent pay increase for full-time workers.

UAW’s President Fain initially criticized Stellantis’ CEO Carlos Tavares for failing to show up in the early stages of negotiations. But, tentative agreements with UAW have been made to end the nearly two-month strike by late October, following the news of UAW and Ford’s negotiations. This agreement includes a 25 percent hourly pay increase and cost-of-living allowances for more than four-year contracts. This was similar to a deal reached with Ford earlier that same week that included at least a 30 percent pay increase for full-time workers.

UAW workers at GM, Ford, and Stellantis plants are set to vote on these tentative agreements in the following weeks. However, if these agreements fail to pass among the workers, they could cause the strikes to continue, financially impacting the workers, the companies, and consumers.