Having worked in the auto industry in several capacities during my IT career, I came to know the UAW rather well. I trained GM UAW workers on robotics and basic computer operations, and worked with the UAW at both Chrysler and Ford. So when the strike came down and the mainstream media reported it, I rolled my eyes at the distortions that were presented to the public.

Their opening demands were ridiculous -- asking for more than a 40% wage increase, a return of pensions, and a reduced work week. Some of what was presented was true -- the union members did not have a cost-of-living increase since their last contract, but that was because they didn’t negotiate to have one. They wailed that the auto companies were rolling in money, money that they felt they deserved.

Then came Joe Biden, Union Joe, jumping in on the side of the UAW. He bemoaned the auto companies making record profits that the employees deserved. To an extent, he may be right. When companies do better, they should share some of that success with the employees. But Biden’s attempt to secure union votes by backing the strike is counter to the overall national good. No one could ever accuse the president of long-term thinking. The sad part is, the UAW was likely to back Biden regardless of what he said about the strike. His involvement was not necessary.

People outside the auto industry don’t realize that a single UAW job on the line impacts ten other jobs. These are often companies that supply parts, provide trucking, run restaurants, stores, etc. When a plant shuts down, the ripple effect is layoffs of many other people, who will not remotely benefit from a new contract with the UAW and the auto companies. One of the few economic indicators that the Biden administration could cling to was low unemployment numbers. That is about to change, though we may not see that impact for another month.

Even if the strike is resolved quickly, it will have a downstream ripple effect on the economy. We have seen how fragile the supply chain in our country is. Shutting down a significant sector, such as car and truck production, is going to be a disruptor that few of us fully comprehend. If the strike continues for a long period, parts and auto inventory will dwindle, which will naturally cause dealerships to raise prices.

The biggest impact will be when an agreement is reached. Assuming that the auto companies will provide for a significant wage increase, whose impact will be passed onto the consumers. There is no way that the auto companies will absorb the double-digit wage increases that the UAW is demanding. There is no magic pot of money to pay for these demands. Make no mistake, the price of cars and trucks for consumers is going to increase, in some cases, dramatically. This will impact the inflation rate in the U.S. Fewer people are going to be able to afford vehicles, which will further affect sales.

The only ones to reap any benefits from all this may be the foreign auto producers with factories in the U.S. not associated with the UAW. These assembly plants in the U.S. will be able to offer their vehicles at a lower price point, putting a further pinch on the U.S. auto industry.

Worse yet, raising the wages dramatically will only serve to pump more money into the economy. This will not only increase inflation, it will almost ensure a recession sometime in the near future.

Do the UAW members deserve an increase? Given the current inflation level, most likely. Their demands, however, are completely unreasonable in terms of scope and scale. Biden would be better off remaining on the sidelines of these negotiations and allowing the free market to determine what increase will be negotiated.

Regardless where these talks go, it is safe to assume that the inflation rate will soar as a result of this strike, forcing the Fed to take aggressive action in terms of interest rates to bring it under control. 

Blaine Pardoe is a New York Times Bestselling and award-winning author cancelled by one of his publishers in 2022. He is a regular contributor to a number of conservative sites. His conservative political thriller series, Blue Dawn, includes A Most Uncivil War, Confederacy of Fear, and No Greater Tyranny. This series tells the story of the violent overthrow of the government by radical progressives. He also authors the bestselling military science fiction series, Land&Sea.

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