One of the centerpieces of President Trump's trade war is his 25 percent tariff on all steel and aluminum imports. The point is to make those foreign imports more expensive, and thus more comparative in cost to American-made steel, driving more domestic demand back to U.S. producers. On that score, the tariffs are working: The domestic price of steel rose 30 percent in just the last six months. U.S. Steel, one of the country's biggest producers, is forecasting a 60-percent increase in pre-tax profits.
"The steel industry is one of the great things to be talking about," Trump said last week. "The manufacturing jobs are back."
There's a hiccup, however: Most steelworkers aren't seeing much benefit from that surge in sales. And they aren't happy about it. In fact, they may be about to strike if negotiations go south.
U.S. Steel and ArcelorMittal are the country's two largest steel producers. They have roughly 30,000 members of the United Steelworkers union between them, and crank out about 40 percent of American production. The contracts covering both companies ran out at the start of September, and the union has been trying to hash out a new arrangement with them ever since.
U.S. Steel is offering a new six-year contract, with a 4 percent raise the first year, 3 percent the next two, and 1 percent for the remaining three. It would also introduce some profit-sharing, with further bonuses tied to the company's future margins. And it's throwing in a one-time $5,000 payment to help workers with their health-care costs. As for ArcelorMittal, the company is suggesting a three-year contract, with a pay increase of 2 percent the first year, and 1.5 percent thereafter.
But in the context of the bonanza the steel industry is going to enjoy under Trump's tariff policies, union members consider those offers insultingly low. "Top company officials have given themselves more than $50 million in pay and bonuses since 2015 while the hourly workforce has not received a wage increase over the same period," the union said in a statement. Don Furko, the president of United Steelworkers Local 1557 in Clairton, Pennsylvania, told the Pittsburgh Post-Gazette that "[b]etween the tariffs and the tax break for corporations, they stand to make $2 billion this year."
Health care, in particular, is a sticking point. Both companies are pushing for workers to take on a greater share of their health-care expenses via higher premiums and copays, in order to reduce the cost of their health benefits. The union argued that ArcelorMittal's proposed changes would more than cancel out any boost to workers' pocketbooks from the wage hikes. And Furko argued U.S. Steel's one-time $5,000 payout also wouldn't make up for the increased out-of-pocket health expenses.
The union is demanding either bigger pay hikes in the new contract or for the companies to drop the proposals to increase health premiums and copays.
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More broadly, the fight between the steel industry and its employees highlights a simmering contradiction in President Trump's blue-collar populism.
There's no doubt the tariffs have delivered on the president's promise to help out the steel industry. (Though whether they'll hurt other areas of U.S. manufacturing that pay for steel as an input cost is another matter.) But every company is its own entity, with rival factions vying for power and for a cut of revenues. Helping out the steel industry does not necessarily translate into helping out steel workers. Across industries, owners tend to have all the power these days, and workers little-to-none a fact that's roiling American capitalism.
Even as Trump has ramped up nationalist protectionism, he's moved to exacerbate this workers-versus-owners power imbalance. ...
U.S. Steel is offering a new six-year contract, with a 4 percent raise the first year, 3 percent the next two, and 1 percent for the remaining three. It would also introduce some profit-sharing, with further bonuses tied to the company's future margins. And it's throwing in a one-time $5,000 payment to help workers with their health-care costs. As for ArcelorMittal, the company is suggesting a three-year contract, with a pay increase of 2 percent the first year, and 1.5 percent thereafter.
So the workers are getting higher wages, but the unions want to squeeze out more and will force their members to stop doing their jobs and make any money at all so the union bosses can get a bigger cut.
Lol unions. ---
Freedom is the right to tell people what they do not want to hear. -George Orwell
To be fair, the rate of wage growth has been considerably higher since around 2015, averaging at around 3.5%, than earlier in the decade from 2010-2014 right after the financial crash.