Why Is The Volume Of Economically-Impacted Workers On Strike Increasing?

Originally Posted At HR.com

Behind the headlines: UPS, Ford, Kaiser Permanente

Highlights:

  • 2023 marks a turning point as 71% of Americans now approve of labor unions, signaling a significant shift in public sentiment.
  • Worker strikes surge in response to inflation, outpacing wage growth and impacting essential living expenses such as food and commuting costs.
  • Successful negotiations at Kaiser Permanente, Teamsters, and UAW underscore the positive outcomes achievable through open communication, addressing inflationary concerns.

Has 2023 been the year of the strike? With Hollywood writers, Kaiser Permanente, United Auto Workers (UAW), and UPS all striking within the same year, it is perceived that this year has seen a marked increase in the number of strikes — however, actual data points to the contrary.

The BBC released data showing that the number of labor stoppages this year is about the same as in past years — while the number of workers walking the picket line has grown. On September 27, 2023, the BBC wrote, “The number of strikes is relatively unchanged, if not slightly lower in 2023, the number of striking workers far outstrips prior years, due in part to unions with large membership taking to the picket line. For instance, more than 150,000 UAW workers are on strike; the WGA and SAG-AFTRA strikes combined saw more than 80,000 workers walk off the job and forgo months of pay.” CNBC reports a much higher number of striking workers: “Some 362,000 workers have gone on strike so far in 2023, compared with 36,600 over the same period two years ago.”

A Widening Divide

Why are so many more employees joining strikelines? The answer could be tied to decades of lopsided inflation adjustments. In the last forty years, the wealthiest American households have thrived, receiving the most significant wage increases and accumulating the most stock. According to CNN, “Between 1979 and 2022, the inflation-adjusted annual wages of the top 1% of workers rose by 145%, while the average annual wages of the bottom 90% rose by only 16%—about a tenth as fast, according to the Economic Policy Institute.”

The “bottom 90%” of individuals make up the vast majority of striking workers. A tight labor market and a near-decade-low unemployment rate are giving rise to workers who realize they have more bargaining power today than ever. This realization has promoted decisive union actions, which have pressured several of the nation’s largest employers to increase salaries:

  • The New York Times, “The [International Brotherhood of] Teamsters have said that the [UPS] agreement includes wage gains of at least $7.50 an hour for current employees over its five-year term. It also raises the minimum pay for part-time workers to $21 an hour from under $17 and increases the top rate for full-time delivery drivers to about $49 on average.
  • Reuters, “The United Auto Workers (UAW) union reached a tentative labor deal on Wednesday [10/25/23] with Ford Motor (F.N), the first of Detroit’s Big Three car manufacturers to negotiate a settlement to strikes joined by 45,000 workers since mid-September.
  • NPR, “Kaiser Permanente and a coalition of unions reached a tentative deal Friday morning, ending the largest healthcare labor dispute in U.S. history. The new contract aims to address staffing shortages with raises that will amount to 21% in wage increases over the next four years to help retain current workers. The deal comes after tens of thousands of nurses, ER technicians, and pharmacists participated in a three-day strike Oct. 4-6.”

A precedent has been set in 2023 that workers will no longer let inflation outpace their paychecks, and they are finding strength in a unified voice. According to a Gallup poll, “71% of Americans now approve of labor unions,” and “more than a third of union members cite job security (42%) and better pension and retirement benefits (34%) as reasons for joining a labor union.”

Conclusion

Taking on more overtime shifts is not an insulator to high inflation costs. A CNBC August 2023 inflation breakdown found that, for individuals eating at work or school, the food at employee sites and schools rose 56.6%. For individuals commuting to work in their vehicles, motor vehicle insurance and repair increased 19.1% and 17%, respectively. Suppose the cost of goods and services exceeds the paycheck from a sixty-hour workweek, and companies are unwilling to raise salaries. In that case, union strikes will continue to become commonplace among news headlines.

If employers do not acknowledge inflation’s financial burdens on workers’ households, there will continue to be enormous work stoppages nationwide. Kaiser Permanente, the Teamsters, and the United Auto Workers (UAW) are paving the way for enhanced wages to ease the inflationary burden of the “bottom 90%.” However, the decreased inflationary load may also have the relative consequence of higher auto parts and repair costs due to work stoppage at the auto manufacturing plants.

The win-win scenario for workers, employers, and the economy resides in open communication, resulting in the understanding of each side’s issues. If strikes can be avoided, the potential economic impact will be lessened. Since the first recorded U.S. strike in 1768, when journeymen tailors refused to work, wages have always been the cornerstone issue. Employers and employees are interdependent; organizations need a process, and the process cannot be realized without dedication and hard work. A degree of suffering is present in every strike, but with thoughtful and constructive bargaining, the negative impact will always be lessened.

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