Money  /  Debunk

Detroit Autoworkers’ Elusive Postwar Boom

The men who made the cars could not afford to buy them.

The notion that there was a postwar boom for autoworkers rests largely on the significance of contracts signed in 1950 between the UAW and automakers, especially the one with GM, which Fortune magazine called The Treaty of Detroit. These contracts provided for hefty wage increases, cost-of-living allowances, raises linked to productivity gains, pensions, and improved health insurance. Historians have disagreed about whether this was a positive or negative development, but almost everybody has accepted that the contracts accomplished what they said they would do. But Chrysler’s 1950 contract came after a 104-day strike that left nearly 100,000 autoworkers in a state of desperation. When the strike was won, Frank Lubinski, who never wavered in his support of the walkout, remarked, “I don’t think we have too much to celebrate. I can’t forget the bank note for $285, the payments on the washing machine, the doctor bill, the three light bills, three gas bills, three telephone bills and four house payments.” Soon after major automakers and suppliers had signed their contracts, war in Korea broke out. This resulted in a brief surge in auto sales and production, as people feared a repeat of WWII’s rationing. Then actual materials rationing kicked in. Steel, aluminum, and copper shortages undercut auto production for the next two years. The situation became so dire in Detroit that automakers, union leaders, and city officials distributed a flyer around the country in January 1951 that stated: “Attention would-be war workers! Stay away from Detroit unless you have definite promise of a job in this city. If you expect a good-paying job in one of the big auto plants at this time, you’re doomed to disappointment and hardship.” For the next two years there were always over 100,000 unemployed Detroiters, most of them autoworkers, with the official total reaching 250,000 in August 1952. At one point in 1952, 10 percent of all the unemployment in the nation was concentrated in Detroit. Moreover, you were counted as “employed” if you worked as little as one hour per week. Underemployment was a chronic problem that remained invisible in official unemployment statistics. Again, this was all after those lucrative 1950 contracts were signed. The wages and benefits written into those agreements gave a misleading impression of how autoworkers actually lived.

There were exceptions, as mini-booms boosted the economy. The federal government lifted Korean War materials restrictions in late 1952 and early 1953 and autoworkers benefited for several months from high levels of production and steady employment. Suddenly automakers were recruiting far and wide for new workers, including everywhere the dire warnings against coming to Detroit were distributed a couple of years earlier. Recruitment proved difficult, however, because of the industry’s instability, which, according to one report was “so well recognized that potential workers know that today’s hiring boom can become tomorrow’s layoffs.”