It is disheartening that truly thoughtful journalism, the kind that takes considerable smarts and experience to produce, is rarely noticed or appreciated by the corporate media, even at the publications where it appears. A case in point is this column by Greg Ip, the Wall Street Journal’s economics columnist.
Ip’s overlooked commentary about growing wealth disparity in America helps explain why one of the most consequential labor battles in recent years, which was tentatively settled Wednesday night, almost entirely escaped the national spotlight: the UAW’s “do or die” strike at an American Axle plant in Three Rivers, Michigan.
The corporate media has peddled UAW president Shawn Fain’s spin that the settlement is a major victory for his union and its members.
“These workers are finally winning back a big chunk of what was taken from them,” Fain said during an online livestream.
A closer look at the settlement details made public so far reveals that the reported 36% raise over the course of four years the UAW negotiated won’t result in a living wage for any worker with even one child and possibly not even those without children. Ip’s column provides the lens through which the UAW’s settlement should be viewed and analyzed.
Ip noted an alarming milestone: worker compensation, including wages and benefits, grew 0.8% in the first quarter from the fourth, while domestic corporate profits jumped 2.7%.
As a result, labor’s share of gross domestic income, conceptually similar to GDP, sank to 51%, the lowest since records began in 1947. Profits’ share climbed to 12.1%, the highest since 1950.
It’s a continuance of a trend that became pronounced in the 2000s and accelerated after the pandemic. Adjusted for inflation, hourly wages are up 3% since the end of 2019 while profits are up 50%.
“That, in a nutshell, explains the chasm between an ebullient stock market and an anxious public,” Ip reported. And, he astutely noted, “You can be a red-blooded capitalist and still worry about the political stability of an economy in which ever more output flows toward shareholders instead of employees.”
Ip noted the backlash is already brewing, with California likely being asked to vote on a billionaire tax in November. Proposed taxes on AI are catching on in some corners. Pope Leo XIV has weighed in.
“Income from capital risks replacing income from labor,” Pope Leo XIV wrote in Magnifica Humanitas, his encyclical letter devoted to the effects of AI.
The plight of American Axle workers makes for a compelling case study about the financial marginalization of U.S. labor and the corporate media’s disregard for their plight.
American Axle’s hourly workers in 2008 agreed to have their wages slashed to $14.50 an hour from $29 an hour because the company threatened to close the Three Rivers plant, and factories in Detroit and western New York, and move production offshore. Even after obtaining the workers’ concessions, American Axle closed its Detroit and New York factories.
A living wage in St. Joseph County, where Three Rivers is located, is $20.74 an hour for a single adult with no children, according to the MIT living wage calculator. For a single adult with one child, it is $34.34 and with two children it is $42.07. Michigan’s minimum wage is $13.73 an hour, meaning the $14.50 wage American Axle workers accepted in 2008 to save their jobs was less than a dollar above what employers in Michigan are now legally required to pay.
Not surprisingly, American Axle workers were struggling. The World Socialist Web Site reported that some workers were forced to sleep in their cars, live in motels, or bike to work, while manufacturing critical components for GM heavy duty trucks costing more than $100,000 with premium trims.
“We have members that take out a loan on their 401(k) almost every 12 to 24 months to pay off credit card debt, and it’s just a perpetual thing because they can’t make enough money,” Josh Jager, a 24-year American Axle employee and chairman of the bargaining committee for UAW Local 2093, told the Wall Street Journal. “A guy works seven days a week, $22 an hour, and he can’t support himself.”
While their tentative agreement is admittedly a major improvement, the reality is that American Axle workers appear destined to spend their careers treading water.
Reuters reported that American Axle workers won’t be paid $30 an hour until 2030. To put a fine point on that, in 2030 they will be getting paid $1 more an hour than they were getting paid in 2008.
Meanwhile, American Axle CEO David Dauch, while his workers weathered brutal post-2008 wage cuts, has taken home more than $100 million in compensation over the past decade, with the company’s top five executives pocketing a combined $231 million from an enterprise that generated $8.4 billion in cumulative gross profit over the same period.
It’s a sad commentary on the corporate media that I must rely on the radical Marxist World Socialist Web Site for critical details of the issues leading up to the American Axle strike and the financial pain the workers are experiencing.
Outlets like the Wall Street Journal and Reuters cater primarily to businesspersons, but one might expect the Detroit Free Press and the Detroit News to cover the strike more through a labor lens, particularly as I recently noted, the state’s household income has plummeted to 40th in the nation from 16th and now sits 13% below the national average. Much of the Free Press’ focus and interest in the American Axle strike is the potential financial harm it might cause General Motors.
The American Axle plant in Three Rivers, about 30 miles south of Kalamazoo in southwest Michigan, produces axles for GM’s heavy-duty Chevrolet Silverado and GMC Sierra pickups, as well as for its midsize trucks, the Chevrolet Colorado and GMC Canyon. The plant also makes axle tubes that ultimately end up in light-duty Silverados and Sierras.
Michigan Gov. Gretchen Whitmer used the American Axle picket line for a photo op demonstrating her loyalty to the UAW. Yet under her leadership, Michigan couldn’t attract any meaningful manufacturing without sizeable taxpayer subsidies. Even Slate Auto, an upstart EV truck manufacturer whose senior management has deep Michigan roots, chose Indiana for its factory, notably close to the Michigan border.
Abdul El-Sayed, who is running for the U.S. Senate and was recently endorsed by the UAW, also paraded with the picketers. This is what Michiganders are tolerating: performative politicians who express support but offer no solutions. They can get away with it because the media doesn’t hold them accountable.
What isn’t publicly known is whether the UAW secured a commitment from American Axle to keep the factory open for a certain period and maintain minimum employment levels.
American Axle, rebranded earlier this year as Dauch Corporation through a $1.44 billion acquisition of the U.K.-based Dowlais Group, commands a $12 billion global revenue stream spanning nearly 70 facilities in 19 countries. The company already has an axle manufacturing footprint in Mexico supporting GM’s operations there as well as other major global automakers.
GM can easily absorb a localized price increase for Dauch Corporation’s axles, but multiplying higher labor costs across its domestic supplier base would permanently erode the automaker’s profit margins. If the UAW secures a massive wage hike across GM’s entire U.S. Tier 1 supplier network, it could inflict even worse structural damage.
Let’s be real about the politics here. While GM CEO Mary Barra has paid President Trump plenty of lip service about supporting his efforts to reshore American manufacturing, her actual capital allocation tells a completely different story.
Right on the heels of bumper 2025 sales, GM earlier this year quietly funneled a fresh $1 billion into its Mexican manufacturing operations and $600 million into its South Korean operations. GM this month was slated to ramp up production of its subcompact Chevrolet Trax crossover, which is built entirely in South Korea.
If U.S. suppliers are forced to concede aggressive union demands, the financial case for GM and its partners to offshore even more production will only become more compelling. This is the hidden trap the UAW faced by playing hardball with American Axle.
This brings us back to Greg Ip’s column, which overlooked where U.S. corporations are increasingly funneling their profits.
In 2025 alone, they spent roughly $1 trillion buying back their own stock and boosting share prices. General Motors is among the nation’s most aggressive stock repurchasers relative to its market value. In the past three years, the company has earmarked roughly $23 billion for stock buybacks. That’s a staggering sum for a company Wall Street values at only about $72 billion.
Those buybacks amounted to more than double the entire $9.3 billion multi-year cost of the wage increases the UAW negotiated in its last contract, an increase that CEO Mary Barra initially claimed would hurt GM’s competitiveness.
Ip warned that ever more output is flowing toward shareholders instead of employees. GM’s capital allocation decisions suggest he wasn’t exaggerating.
Barra and GM President Mark Reuss have sold massive chunks of their personal GM holdings, pocketing tens of millions of dollars while the company was spending billions buying back stock and boosting its share price.