agent Entrepreneur logo
MenuMENU
SearchSEARCH

How Higher Wages For U.S. Autoworkers Could Help You Get a Raise, Too

Cars are flying off U.S. dealer lots at the fastest pace since 2005, and after a decade of flat wages, the workers who make them are getting a raise, too. If such gains precede broader pay bumps in the labor market, Federal Reserve policy makers could have more evidence that the wage pressure they so desperately want to see is starting ... Read More »

December 5, 2015
3 min to read


Cars are flying off U.S. dealer lots at the fastest pace since 2005, and after a decade of flat wages, the workers who make them are getting a raise, too. If such gains precede broader pay bumps in the labor market, Federal Reserve policy makers could have more evidence that the wage pressure they so desperately want to see is starting to build, reports BloombergBusiness.

 

Sales of U.S. cars and light trucks ran at an 18.12 million annualized rate in October, the highest level since 2005, according to data from Ward’s Automotive Group. Driven by low borrowing costs and cheap gasoline, the auto industry is on track for its strongest full-year performance since 2000.

Ad Loading...

Workers at Ford Motor Co. and General Motors Co. just approved new contracts last week that include across-the-board raises, a path to senior-level pay for entry-level workers and ratification bonuses of up to $10,000. They join workers at Fiat Chrysler Automobiles NV, who reached a similar agreement in October.

While the new labor contracts cover only those more than 140,000 unionized employees at the so-called Big Three carmakers, they have the potential to lift pay standards for the nearly 1 million people who work in the U.S. auto industry and may also spur wage gains through the broader labor market, according to Joel Cutcher-Gershenfeld, a professor of labor and employment at the University of Illinois at Urbana-Champaign.

“The auto industry has been a bellwether for the economy,” he said. “It is certainly the case that there will be wage pressure on the foreign transplants in the Midwest and the South based on the auto agreements.”

The deals come after a decade without raises for senior workers and lower wages and benefits for new hires — part of union-backed concessions workers agreed to in 2007 to stem job losses, as both Chrysler and GM headed into government-sponsored bankruptcies in 2009.

 

Since those days, the significant wage premium autoworkers once enjoyed over the average American worker has been almost completely eliminated, Labor Department data show.

Ad Loading...

Employees who work in motor vehicles and parts manufacturing used to earn more than 30 percent above what all private U.S. nonsupervisory workers made in 2006. That was down to just 1.8 percent in October, the lowest premium in Labor Department data going back to 1990.

At $21.56 an hour, the average hourly wage for autoworkers now is actually lower than it was 10 years ago at $22.51, according to data that haven’t been adjusted for inflation.

With their employers back on their feet, workers entered negotiations that began in July focused on getting a piece of the industry’s recovery and making up for years of frozen or reduced earnings.

An acceleration in wage growth has been a persistently missing piece of the economic recovery and one that’s been lamented by Fed policy makers debating the timing of their first interest-rate increase since 2006 and the pace of rises thereafter. The autoworker agreements and their potential to ripple through the economy may help provide Fed officials with an extra bit of confidence that wage inflation pressures are building.

More Industry

The outside of a blue Gregg Young Chevrolet dealership.
Industry•by Lauren Lawrence•October 22, 2026

Nebraska Rooftop Changes Hands

The Gregg Young Automotive Group has sold its second dealership to Janssen Auto Group, both in Plattsmouth, Neb.

Read More →
Two white men's shaking hands
Industry•October 15, 2026

Penske Auto Group Deal a Record

The deal to take the dealership and transportation services company private sets a new pace for industry buy-sell transactions.

Read More →
Rows of cars parked in exterior lot
Industry•by Hannah Mitchell•October 8, 2026

War Toll a Damper on Used Auto Prices

Cox Automotive found wholesale depreciation to be elevated in September amid high fuel prices and this year's unusual hurricane season.

Read More →
Ad Loading...
Mechanic cleaning interior of engine
Industry•by Lauren Lawrence•October 8, 2026

Bridge the Maintenance Gap

With many drivers missing recommended maintenance, service departments offering transparency and efficiency have a better chance of reaching financially strained consumers.

Read More →
Ford F-150 truck rounding a curve
Industry•by Hannah Mitchell•October 1, 2026

California Store Has New Owner

The longtime dealership in the northern part of the state is known for robust fleet sales and has served the state capital for 115 years.

Read More →
crane lowering a pipeline into the ground
Industry•by Lauren Lawrence•October 1, 2026

BMW Plant Pursues Cleaner Energy

BMW Group Plant Leipzig has utilized hydrogen to help power its production since 2013, but a new pipeline is planned to take it to another level.

Read More →
Ad Loading...
Two dodge cars outside of dealership.
Industry•by Lauren Lawrence•September 17, 2026

Auto Affordability Inches Up

The latest Cox Automotive and Moody’s Analytics index shows a slight increase in new-vehicle affordability despite high prices.

Read More →
Five men smiling for photo in front of Honda car dealership.
Industry•by Lauren Lawrence•September 10, 2026

Ohio Auto Group Under New Ownership

After 79 years with the Schluter family, Mansfield Auto Group has been acquired by Missouri-based Clement Auto Group.

Read More →
Blue and white RV parked on beach facing the ocean.
Industry•by Lauren Lawrence•September 3, 2026

RV Group Expands Carolina Footprint

Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.

Read More →
Ad Loading...
Photo of two men and one woman on a discussion panel
Industry•by Hannah Mitchell•September 1, 2026

Agent Acumen

An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.

Read More →
Ad Loading...