![]() Your CNN account Log in to your CNN account ![]() That matters because it means that fewer programs will receive the funds they need.Īt the state level, Ehrlich estimated that Michigan, the epicenter of many of the strikes, will see a $10.6 million decline in tax revenue if the strike lasts two weeks. Tier two suppliers - those that supply the tier one businesses - could also have to lay off workers as a result.įewer people working because of the strikes will mean the government can’t collect as much tax revenue. At first, suppliers who work directly with the automakers, so-called tier one suppliers, will try to keep workers on the payroll because they’re worried about being able to rehire if they let people go, in what’s called “waiver hoarding behavior.”īut if a strike goes on long enough, they’ll have no choice but to lay off workers. That’s why he expects them to delay canceling orders with suppliers for necessary parts for as long as possible.īut when the automakers ultimately do begin canceling orders, it will have a ripple effect throughout the parts supplier network. Suppliers that work with the Big Three may have to lay off workersīecause car inventories nationally are still below pre-pandemic levels, the Big Three automakers are going to be anxious to restart production as soon as the strike ends, said Ehrlich. If the strike goes on long enough, it could lead employers near the affected auto plants to lay off workers, said Tyler Theile, vice president and director of public policy at Anderson Economic Group. That means local businesses near strike sites will lose out on revenue. Here are the ways the US economy could get hurt by the strike:īusinesses near strike sites will see revenue slowĪlthough striking UAW members will be receiving $500 a week in strike pay, it likely won’t be sufficient for them to keep up their normal spending. Paul Sancya/APįor first time in history, union workers strike against all Big Three automakers If the strike lasts eight weeks, he estimates a $9.1 billion hit to incomes nationwide.Ī United Auto Workers sign is shown during the Labor Day parade in Detroit, Monday, Sept. He estimated $440 million worth of income would be lost nationally if all the UAW members strike for two weeks. The truth is we are going to wreck the billionaire economy.”Īnd while estimates of the economic impact of the strike don’t point at “wrecking the economy,” the damage could be significant.įor instance, if all UAW workers at Ford, General Motors and Stellantis strike for 10 days, it would cost the US economy $5 billion, according to Anderson Economic Group’s estimates.Īnother estimate by Ehrlich assumes there would be a much smaller immediate spillover effect. ![]() UAW president Shawn Fain said “we’re not going to wreck the economy. ![]() “That’s because the unionized part of the industry, while still large, is not as big a piece of the national economy as it once was,” Gabriel Ehrlich, an economic forecaster at the University of Michigan, told CNN.īut the ultimate impact of the strike depends on things like how long the strike lasts, if companies lay off workers at other plants, how many workers walk off their jobs and how long the unions and companies take to negotiate a deal. With the United Auto Workers’ historic strike officially underway, experts say the US economy is already getting bruised – but the strike’s impact isn’t likely to push the nation into a recession.
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