Mike Ilitch School of Business in the news

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Global economy 2023: What happens next with industrial action

Marick Masters, professor of business and adjunct professor of political science at Wayne State University, is included as an author in a series about the state of the global economy published by The Conversation. “US workers organized and took to the picket line in increased numbers in 2022 to demand better pay and working conditions, leading to optimism among labor leaders and advocates that they’re witnessing a turnaround in labor’s sagging fortunes…” he writes. “In total, there have been at least 20 major work stoppages involving upwards of 1,000 workers each in 2022, up from 16 in 2021, plus hundreds more that were smaller… As of 2021, union membership was at about the lowest level on record, at 10.3%. In the 1950s, over one in three workers belonged to a union. The deck is still heavily stacked against unions, with unsupportive labor laws and very few employers showing real receptivity to having a unionized workforce. Unions are limited in how much they can change public policy. Reforming labor law through legislation has remained elusive, and the results of the 2022 midterms are not likely to make it easier. Nonetheless, public support for labor is at its highest since 1965, with 71% saying they approve of unions, according to a Gallup poll in August. And workers themselves are increasingly showing an interest in joining them.”
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What Michigan’s minimum wage increase means for small biz

By Luke Laster Michigan's minimum wage rises above $10 starting this year, but what does that mean for Michigan small businesses who may have small margins. The increase from $9.87 to $10.10 was set by the "Michigan Improved Workforce Opportunity Wage Act of 2018," and is part of multiple annual increases. Marick Masters, a professor of business at Wayne State university says this raise should be manageable when it comes to small businesses in the state. "Most recent year, you had about 170,000 person increase in the number of employees in small businesses in Michigan. So that's something you want to sustain, and you wouldn't want to set the minimum wage perhaps at a level that would detract from that," says Masters. He says small businesses have been leading the way in job growth, not only nationally but in Michigan as well. He added about 2 million people in the state work for small businesses, about 48%of the workforce.
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Worker strikes and union elections surged in 2022 – could it mark a turning point for organized labor?

By Marick Masters Marick Masters, professor of business and adjunct professor of political science at Wayne State University, wrote an article for The Conversation about ongoing shifts in labor issues. He writes: Workers organized and took to the picket line in increased numbers in 2022 to demand better pay and working conditions, leading to optimism among labor leaders and advocates that they’re witnessing a turnaround in labor’s sagging fortunes. Teachers, journalists, and baristas were among the tens of thousands of workers who went on strike – and it took an act of Congress to prevent 115,000 railroad employees from walking out as well. In total, there have been at least 20 major work stoppages involving at least 1,000 workers each in 2022, up from 16 in 2021, and hundreds more that were smaller. At the same time, workers at Starbucks, Amazon, Apple and dozens of other companies filed over 2,000 petitions to form unions during the year – the most since 2015. Workers won 76% of the 1,363 elections that were held. Historically, however, these figures are pretty tepid. The number of major work stoppages has been plunging for decades, from nearly 200 as recently as 1980, while union elections typically exceeded 5,000 a year before the 1980s. As of 2021, union membership was at about the lowest level on record, at 10.3%. In the 1950s, over 1 in 3 workers belonged to a union. As a labor scholar, I agree that the evidence shows a surge in union activism. The obvious question is: Do these developments manifest a tipping point?
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Six burning questions for 2023

In last year’s “Burning Questions,” we pondered pressing topics related to the approaching 2022 elections. There may be no controversial campaigns or hotly contested races in store for the coming year, yet somehow, the political climate seems as fervent as ever. The sense of calm that settled in a few months back, once the ballots were cast and victors declared, has already begun to recede as we contemplate what 2023 might hold. Among the topics making us sweat this January: mercurial gas prices, rising tensions around school safety, the looming threat of recession — and of course, the roads. The “R-word” seems to have become a constant presence in our lives. For months now, the Federal Reserve has been announcing interest-rate hikes on what feels like a daily basis, thus fueling already extensive debate on whether our financial fears will be realized (and whether they already have been). But for all the discourse, a concrete answer has remained elusive. According to the International Monetary Fund, that answer is: probably. The organization predicts that, barring swift action on inflation from policymakers, a recession is imminent — at least on a global scale. Wayne State University economics professor Michael Belzer is less concerned. “Unless something bad happens, I don’t personally think we’ll really get into a full recession,” he says. While multiple factors, such as the Russian war on Ukraine and the enduring disruptive effects of the COVID-19 pandemic on global markets and supply chains, continue to drive inflation, there is cause for optimism. In particular, Belzer points to falling unemployment rates and persistent job availability as signs that the labor market is continuing down the road to recovery. However, he is wary of the Fed’s “aggressive tight-money policies” potentially knocking it off course. Rather than curbing inflation, he thinks steep increases in interest rates could actually serve to stifle economic improvement. “I don’t think that high interest rates will reduce inflation, because the inflation we’re experiencing in this moment isn’t caused by demand shock, like it is in most recessions.” Belzer also discusses gas prices and the international intricacies making fuel prices are particularly difficult to predict. “It’s important to understand that gas prices are not local — oil is a commodity traded on the global market.” However, he suspects that the root of the initial price relaxation — the global economic downturn and resulting reduction in fuel demand — will also “keep the lid on fuel prices” … at least for the next year or so. 
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UAW’s EV batter plant win signals success ahead in organizing push

By Kalea Hall  The United Auto Workers' success this week in organizing its first joint-venture battery plant owned by a Detroit Three automaker will aid the union in its fight to organize other similar plants and bolster its position in the changing industry, experts say. Workers at the General Motors Co. and LG Energy Solution joint-venture Ultium Cells LLC plant in Warren, Ohio, this week overwhelmingly voted in favor of UAW representation, with 710 voting for the union and 16 voting against it. The plant is one of four U.S. facilities the companies are planning to open. Production launched first at the Warren facility this past summer. The Warren Ultium facility is the first of several battery plants the UAW will look to organize as the Detroit automakers progress with their EV plans. The organization efforts come less than a year before the UAW starts national contract talks with the automakers, which are likely to focus on preserving union jobs in the move to EVs. "The successful organizing of the new wave of electric battery manufacturing is essential to the UAW's future position," said Marick Masters, a professor at Wayne State University's Mike Ilitch School of Business, in a statement. The UAW's challenge now will be "to meld the representation of these workers into the overall fabric of the auto negotiations so as (to) protect jobs and wages," Masters said. "These workers should become ambassadors for the UAW's efforts to replicate this success in other facilities in the offing and in the facilities of the nonunion electrical vehicle manufacturers such as Rivian and Tesla." 
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Workers at new GM joint venture EV battery plant vote to join union

By Jamie L. LaReau     The hourly workforce at Ultium Cells LLC, the joint venture owned by General Motors and battery maker LG Energy Solution, has voted to unionize its plant in northeast Ohio after the union and the company spent months at odds over the organizing process. About 1:30 Friday morning, the UAW released the results of a two-day vote that started Wednesday and ended at 11 p.m. Thursday. The workers at the plant, located near GM's former Lordstown Assembly plant in Ohio, voted in favor of joining the UAW by a vote of 710 to 16, the UAW said. Experts say the victory is significant for the UAW's future. It should enhance the UAW's bargaining power with the Detroit Three automakers later next year, for example, and it signals that Ultium's two other plants — one being built in Spring Hill, Tennessee, and the other in Lansing — will likely also vote yes for union representation. "If the UAW draws the important lessons from this win and uses the knowledge to replicate success in other comparable situations of joint ventures, then it will have performed its mission well," said Marick Masters, a professor of business at Wayne State University and an expert on unions. "The ultimate objective of unionizing is to improve the working conditions of people and build a stronger middle class. This victory is another signal that there is considerable support for unions that can result in bargaining representation if workers are given a fair chance to exercise their voice without undue employer interference." 

Apple pulls production out of China following protests

Assistant professor of teaching in global supply chain management at Wayne State University Kevin Ketels discusses the acceleration of Apple’s plans to shift some of its production outside China, which has long been the company’s dominant country in the supply chain. About 85% of iPhones are built and assembled in China. The pandemic, civil unrest and COVID authoritarian rule have revealed that consolidating manufacturing centers for American companies in the volatile country is now becoming more risky and less sustainable. Apple is rethinking its strategy after worker protests related to China’s zero-COVID policies. “We’ve seen police beating workers at Foxcon’s facility in China, which is the world’s biggest site making Apple smartphones…” Ketels said. “Now Apple says ‘we need more facilities and places to avoid supply chain nightmares.’ In the past, people didn’t worry too much about product coming from one location to another. Free trade seemed pretty normal and predictable, but we have entered a whole new world, and Apple is waking up to that…”     
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UAW election results signal ‘discontent’ among members as reformers notch big wins

By Eric D. Lawrence and Jamie L. LaReau  UAW members don't yet know if they will have a new president or whether incumbent Ray Curry will hold his seat following the union’s first direct election of top leaders, but one thing is certain: Change is on the horizon. Marick Masters, a business professor and labor expert at Wayne State University, said the vote, with rank-and-file members mostly selecting opposition candidates where they had the choice, revealed a great deal of dissatisfaction with the current leadership. Masters said, noting that some of the reforms in budgeting and personnel that the union is required to implement as a result of the fallout from the corruption scandal are “works in progress.” “They have an opportunity if they are firm and aggressive and thoughtful about it to make sweeping changes,” Masters said of the new voices. The corruption scandal, which exposed a culture where some top leaders helped themselves to a “fat cat” lifestyle, amplified the dissatisfaction among many members, but Masters said the discontent had its roots in other causes, such as unhappiness with the union’s stance in bargaining and a perceived willingness to cooperate too much with management. Looking ahead, the union will need to prioritize where it puts its organizing resources, Masters said. If the union wants to show its ability to make progress on some of the issues members care about, then it will need to demonstrate that it can unionize workers at electric vehicle battery plants and at auto plants not controlled by the Detroit Three, he said, noting that it won’t be easy. “These companies are not going to roll over and allow this to happen without a fight, so they’re going to have to be more resourceful overall in how they approach organizing these new battery facilities and these foreign-based plants in the United States,” Masters said. 
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Latest Ford Super Duty orders set ‘insane’ pace

By Phoebe Wall Howard  Ford shattered a sales record for the month of November after reaching a record-setting pace of 52,518 new orders for the 2023 Super Duty pickup in the last five days of October, when it averaged more than 10,000 trucks a day, according to monthly sales data. But the November sales report nearly triples that figure. The Super Duty pickup has a base price of $43,970 that often climbs past $90,000, depending on amenities selected by the buyer. Options include type of engine, wheels, tires, cloth or leather interior, display screen size and massaging seats. Ford now has orders for 151,870 Super Duty trucks since the order bank opened Oct. 27, the company revealed Friday. Marick Masters, a business professor at Wayne State University, said Ford has a high-stakes interest in maintaining the appeal of the Super Duty that goes beyond just happy customers who want a pickup with a traditional internal combustion engine that pulls enormous loads of weight. These are the products that fund the future at Ford in electrification and technology research, he said. "This bodes well for the company's future," Masters said. "The sheer volume of orders is particularly surprising. It's very important for the company to have high levels of sales in these profitable areas."