Non-union workers see pay bump following UAW victory, and other labor news

Take a seat in the Break Room, our weekly round-up of labor news in Minnesota and beyond. 

Unions are a rising tide

Toyota told workers they would be getting raises across its U.S. plants — all non-union — after the United Auto Workers union reached historic tentative agreements with Ford, General Motors and Stellantis.

The pay raises, first reported by Labor Notes, show how unions often influence wages across entire industries.

Non-union companies raise wages to hew close to union pay in order to stay competitive and defend against organizing efforts in their own houses. Nonunion workers with high school diplomas earn 2% to 5% more if they work in industries with at least 25% unionization, according to the Economic Policy Institute.

Workers at the lower half of the income scale have seen massive wage gains in recent years, driven in part by a new labor militancy that’s sent nurses, auto workers, social workers and teachers to the picket lines, while UPS workers used the threat of a strike to win big raises. Union workers won 6.6% raises on average in 2023, according to an analysis by Bloomberg Law.

Non-union automakers are unlikely to fully match the significant increase in wages and benefits secured in the UAW agreements, however. The Ford deal, for example, includes a 25% general raise over about 4.5 years, 10% employer contribution to retirement plans, profit sharing, $5,000 ratification bonus, $1,500 voucher toward new vehicle purchase, cost-of-living increases, faster wage progression, and more.

With the wind at his back, UAW President Shawn Fain says they’ll try again to expand to other manufacturers like Tesla, Toyota, Honda or Volkswagen.

“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said. “When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six.”

Doing so is key to the union’s future, as automakers continue to expand operations in the South.

The task seems sisyphean given the repeated failures by the union to get a toe-hold at foreign automakers with plants in southern states with political leaders and laws hostile to unions.

In 2014, Volkswagen didn’t oppose the union drive at its plant in Chattanooga, but Republican legislators threatened to cut off future incentives if workers voted to unionize. Workers rejected the union then and again in 2019.

But the UAW has also struggled to organize workers at a Tesla plant in union-friendly California, where CEO Elon Musk was found to have violated federal labor law, according to the National Labor Relations Board, by threatening staff on Twitter. The company also fired a union supporter and “coercively interrogated” others. Musk sent the tweet in 2018; it is still being litigated along with other allegations of illegal union busting.

For the moment, organized labor can celebrate what increasingly looks like a banner year for unions — a rarity since the 1980 election of Ronald Reagan.

Paid leave program will cost more than originally thought

Minnesota employers and workers will have to pay about 18% more than originally thought for a new state-run paid family and medical leave program slated to start in 2026, according to a state-commissioned actuarial analysis.

Given the new analysis, the annual payroll tax on wages — 0.78% split between the employer and the worker in the first three years — would be $468 on $60,000 of taxable income, if the state takes up the actuary’s recommendation. In later years, the cost would be $493 based on a .83% tax. The prior estimate was $420 based on a 0.7% tax.

The program was a key Democratic victory at the Capitol this year, guaranteeing Minnesota workers 12 weeks of paid family leave and 12 weeks of paid medical leave per year — up to 18 weeks total. About 130,000 workers are projected to use the benefit each year at a cost of about $1.4 billion to bond with a newborn, recover from an illness or care for a loved one.

One of the law’s lead authors, Sen. Alice Mann, DFL-Edina, said the actuary’s report looks “great” and a .08 percentage point increase isn’t significant.

Republicans, who were staunchly opposed to creating the program, said the actuary’s report vindicated them and their warnings of soaring costs.

200 First Avenue workers aim to unionize

More than 70% of First Avenue Production’s roughly 200 workers have signed union cards with Unite Here Local 17 and are asking the company to voluntarily recognize their union, according to the Star Tribune’s Emma Nelson.

The workers cited low wages, inconsistent training and short-notice on scheduling as driving forces for unionizing First Avenue’s seven venues.

75% of state jobs no longer require college degree

Gov. Tim Walz signed an executive order on Monday eliminating the four-year degree requirement for about 25,000 state government jobs. Governors in more than a half-dozen states — both Democratic and Republican —have eliminated college requirements for many government jobs to expand their pool of potential workers.

Like many employers, Minnesota government is struggling to fill openings, even as a big portion of state workers nears retirement age. Among fields with workers aged 55 and older, “public administration” is near the top, with nearly 27% approaching retirement, according to a state researcher.

Nearly two-thirds of working-aged Minnesotans don’t have a bachelor’s degree, and may be needlessly rejected for jobs they’d otherwise be qualified for. Research has revealed unnecessary “degree inflation” across the labor market.

U.S. Rep. Angie Craig announced in April that she would no longer require a college degree for any job in her congressional office. A spokesperson for Craig told the Reformer this week that two of Craig’s 19 staff members don’t have college degrees — including a farmer who works on agricultural policy — but declined to say when they were hired.

Sen. Tina Smith proposes higher penalties for child labor violations

U.S. Sen. Tina Smith joined other Democrats in introducing legislation that would increase penalties against employers that violate child labor laws, while allowing children to sue exploitative employers.

The effort, led by Sens. Bob Casey, D-Penn., and Patty Murray, D-Wash., comes in response to an 88% increase in child labor violations since 2019. Many of the violations were discovered in dangerous industries like meatpacking, construction and manufacturing and involve undocumented children who’ve migrated to the U.S. from Mexico and Central America without their parents.

“Companies that take advantage of children — often those who are most vulnerable — and subject them to dangerous work environments must be held accountable,” Smith said in a statement.

The Children Harmed in Life-threatening or Dangerous (CHILD) Labor Act would toughen criminal and civil penalties, increasing civil fines from $11,000 to $151,380 and criminal penalty fines from $10,000 to $750,000, for instance.

The bill seems unlikely to pass a Republican-controlled House. Across the country, Republican-controlled legislatures have advanced bills to loosen child labor standards.

Uber, Lyft drivers get minimum pay rate in New York under settlement

New York will become the third state — after Washington and California — to have minimum pay rates for Uber and Lyft drivers. It comes as part of a settlement agreement announced on Thursday by state Attorney General Letitia James in which the companies agreed to pay drivers at least $26 an hour, provide sick leave and allow drivers to appeal all deactivations.

The deal could influence negotiations in Minnesota, where a task force of drivers, company representatives and state officials are working on recommendations for legislation to give to Walz by next year.

Information on new sick and safe time law 

The Minnesota Department of Labor and Industry released an FAQ and video to help workers and employers understand the new sick and safe time law that takes effect on Jan. 1. The new law was a signature policy goal of the Democratic trifecta and guarantees full-time employees receive at least 48 hours of paid sick and safe time off per year. Anyone who works at least 80 hours a year for an employer — and is not an independent contractor — is eligible and will accrue one hour of paid time off for every 30 hours worked.

The time can be used for reasons such as a physical or mental illness, a doctor’s appointment, a family member’s illness, domestic abuse, or a weather-related closure of one’s workplace or a family member’s workplace or school.