Technical progress may be painful for individuals, but society or even humanity benefits from it. This is how the introduction of machines was justified at the dawn of the industrial age and this is how artificial intelligence is legitimized today. But is this also true?
Only to a limited extent, believe the two economists Daron Acemoglu and Simon Johnson. In their latest book ‘Power and Progress’ they show that historically the fruits of progress have been distributed very differently and that there have usually been many more losers than winners.
To support their statement, Acemoglu/Johnson go far back to the Middle Ages. A look at the American car industry is sufficient for us. It’s a good example of how technical progress is eating its children.
The golden age of autoworkers
As is well known, Henry Ford paid his employees very decently. He did not do this out of mercy, but from the insight that if he wanted to win customers for his Model T, he also needed consumers who had the necessary income. As a result, Ford’s insight meant that auto workers in Detroit also received wages well above average at GM and Chrysler and could afford a middle-class life.
After World War II, American auto workers began their golden age. Even those who did not have a high school diploma could earn enough to afford a house and a car without their wives having to earn money too. Yes, he was still able to save enough money to finance his children’s education.
This ended with the advent of neoliberalism. Ronald Reagan broke the power of the unions and then Bill Clinton moved large parts of the auto supply industry to China and Mexico with the NAFTA free trade agreement. The consequences for American workers were brutal. Those who were able to keep their jobs had to accept pay cuts of more than half.
Even that wasn’t enough to convince GM, Ford & Co. to keep upright. They only survived after the 2008 financial crisis thanks to a financial injection from then-president Barack Obama. But this time too, the workers fared badly. They faced another pay cut.
In the meantime, however, the US auto industry has not only recovered, it has also posted record profits in recent years. At the same time, it can collect billions in subsidies from the government, which wants to promote the transition to electromobility.
In view of this development, employees now also want to receive a piece of the pie, especially as their income has fallen further in recent years due to inflation. However, because unions and employers have not yet agreed on a compromise, union leaders have called for a strike for the first time in a long time.
One person helping them is Joe Biden. On Tuesday, the president himself made a pilgrimage to Detroit and joined the picket lines. Biden even took to the megaphone himself and shouted at the strikers: “The fact is, you saved the auto industry, in 2008 and before. You made great sacrifices when companies were in trouble. They’re doing incredibly well right now, and guess what? You should do incredibly well too.”
A president on the picket line is extraordinary, even historically unique. Why is Biden doing this? On the one hand, because he traditionally sympathizes with the unions. He repeatedly mentions that he grew up in Scranton, an industrial city in Pennsylvania, and that he knew and could understand the needs of ordinary workers.
But there is also a political calculation behind Biden’s visit. Detroit is located in Michigan, a so-called swing state that Biden narrowly won in the last election. In 2016, Trump was able to exploit auto workers’ anger against Hillary Clinton and NAFTA to his advantage. Biden therefore has a great interest in the support of the unions. In 2024 they could tip the balance. However, the UAW, the auto workers’ union, has not yet endorsed the president.
Moreover, the trade union movement in the US is on the rise again. Economists like Acemoglu and Johnson are calling for stronger unions to enforce a fairer distribution of technological progress. Unions are making progress not only in industry, but also in the services sector. Whether it’s Amazon or Starbucks, service providers must also accept that more and more of their employees are starting to organize unions.
The American public’s image of unions has changed and the smell of closeness to the mafia has disappeared. When Ronald Reagan fired the air traffic controllers in the 1980s because of their in-corpore strike, he could count on a lot of understanding from the population. The demands of the pilots’ union were actually outrageous at the time. Today, however, the tide has turned. The UAW can count on the support not only of Biden, but of the majority of the population.
That is why the ex-president wants to make a pilgrimage to Detroit today and address the strikers. However, Trump does not have a particularly pro-union record. For example, he had his tower built in New York with mostly poorly paid Polish construction workers. It is said that he occasionally employs illegal immigrants at his golf resorts.
Trump therefore appeals to the fear of electromobility. Electric car production actually requires fewer workers, and China has become a leading manufacturer. That’s why the ex-president writes in all caps on his Truth Social platform: ‘He (Biden) wants to take your jobs and give them to the Chinese and other countries. I want to secure these jobs and make you rich.”
It remains to be seen to what extent Trump’s fear mongering will be carried forward. This does not alter the fact that the transition to electric cars is already in full swing and is no longer reversible. Today it’s about who makes this transition and who doesn’t.
Soource :Watson
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
