In 2018, the number of Americans participating in labor strikes reached its highest level in over 30 years.[1] This is somewhat surprising, given that both labor unions and general worker organizations have faced a series of new obstacles in recent decades. With the adoption of “right to work” (“RTW”) laws throughout the country and the recent Janus Supreme Court ruling, stating that government workers should not be required to pay union fees, it is fair to say that the traditional worker protections established during the New Deal are facing an all-time ebb.[2] The percentage of U.S. workers who belong to a union decreased for another consecutive year, from 10.7% in 2017 to 10.5% in 2018.[3] As of 2019, only one in 16 private sector workers belong to a worker’s union.[4]
Given all of this, it is fair to wonder why labor strikes and work stoppages are on the rise. While there are key differences between public and private sector worker organizations, many of the problems that plague one overlap with the other. Perhaps one of the most telling case studies is the United Auto Workers strike (“UAW)”, currently entering its sixth week as of this publishing.[5] The UAW is one of the most well-known and visible private sector labor unions in the country, and in a way, could be a harbinger of similar movements from employees in the corporate world.
Michigan––where the majority of striking workers are located, as is GM headquarters––is a RTW state.[6] RTW protections allow employees to opt-out of paying union dues, which inevitably leads to lower union participation, less funding, and as a result, generally less bargaining power for employees in affected industries.[7] Michigan adopted the law in 2013, but RTW laws have been proliferating throughout the country for over half a century, with a recent uptick in the last decade or so.[8] Over half of U.S. states have adopted RTW laws, mostly in the South and Midwest.[9] Many experts believe that the adoption of these laws have contributed to the decline in union membership across several industries.[10]
One point of contention by the UAW is the insistence that UAW are entitled to a larger share of the company’s profits and improved employee benefits.[11] GM has still been profitable taking in $8.1 billion last year although its stock has not moved significantly.[12] GM is in a difficult situation because it owes fiduciary duties to their shareholders as well as its employees. That pulls GM in two different directions. Both sides appear to be digging in their heels. The striking workers have forced an increase in production costs over the past several weeks.[13] In retaliation GM has cancelled healthcare benefits for the striking employees.[14]
Putting aside the ethical concerns of such a move, one of the main takeaways here is that it appears that labor organizing has a surprising amount of staying power, even in states with RTW laws, with unpredictable ramifications on both the stock market and the economy. This is in part because movements are emerging in industries without such rich union histories. In 2012, fast food workers in New York City organized.[15] Many fast food workers were making only $7.25 an hour.[16] Workers across different fast food chains organized a work stoppage and lobbied extensively for a $15 an hour living wage––a number that was inconceivable at the time but was passed by the New York legislature not long after.[17] The fast food industry does not have a rich history of labor organization, but nonetheless were able to have their demands met.
Another example would be the striking of Marriot hotel employees across many states––some with RTW laws and some without––in 2018.[18] Again, fighting for wage increases, the worker’s union was able to broker a new agreement with increased wages and benefits.[19] Indeed, hotel employees at the Battery Wharf Hotel in Boston (one of the states in which the walkout occurred) have threatened a walkout this month, making similar demands.[20]
However, there has been pushback by large corporate employers. In the 2015-16 election cycle, business outspent labor $3.4 billion to $213 million, a ratio of 16 to 1.[21] Unions spend about $48 million a year for lobbying in Washington while corporate lobbying totals $3 billion.[22]
How this will all play out remains to be seen, and how it could affect the structure of employee benefits and worker protections is in a constant state of flux. For now, though, it appears that the initial downturn fomented by the implementation of RTW laws––and the developing union identities in industries that previously did not exist, are indicating a counterreaction by worker movements is in the works.
[1] Alexia Fernández Campbell, A Record Number of US Workers Went on Strike in 2018, Vox, (Feb. 13, 2019), https://www.vox.com/policy-and-politics/2019/2/13/18223211/worker-teacher-strikes-2018-record# (last visited Oct 13, 2019).
[2] Tucker Higgins, In a Blow to Public Sector Unions, Supreme Court Overturns 40-Year-Old Precedent, CNBC.com, (Jun. 27, 2018), https://www.cnbc.com/2018/06/27/supreme-court-rules-in-janus-labor-union-case.html
[3] Bureau Labor & Statistics, Union Members Summary, BLS, (Jan. 18, 2019), https://www.bls.gov/news.release/union2.nr0.htm
[4] Id.
[5] Neil E. Boudette, G.M. Strike: 50,000 Workers Walk Out over Wages and Idled Plants, N.Y. Times, (Sep. 16, 2019). https://www.nytimes.com/2019/09/15/business/autoworkers-union-general-motors.html
[6] Carol Thompson, Labor Experts: Michigan Right to Work law Likely Plays Small Role in UAW Strike at GM, Lansing State Journal, (Sep. 18, 2019). https://www.lansingstatejournal.com/story/news/local/2019/09/18/michigan-right-work-law-uaw-strike-gm-general-motors-lansing/2350552001/
[7] Jeffrey A. Einshach, Right to Work Laws: The Economic Evidence, NERA, 8, (Updated May, 2018), https://www.nera.com/content/dam/nera/publications/2018/PUB_Right_to_Work_Laws_0518_web.pdf
[8] Id at 11.
[9] See id at 10.
[10] See id at 18.
[11] See Boudette, supra note 5.
[12] Dan Caplinger, Stock Market News: GE Freezes Pensions; GM Strike Continues, The Fool, (Oct. 7, 2019). https://www.fool.com/investing/2019/10/07/stock-market-news-ge-freezes-pensions-gm-strike-co.aspx.
[13] Id.
[14] Eli Rosenberg, GM Drops Worker’s Healthcare During Strike, a Sign UAW Impasse Could Drag On, Wash. Post, (Sep. 18, 2019). https://www.washingtonpost.com/business/2019/09/17/gm-dropped-workers-health-care-during-strike-company-says-its-standard-procedure/
[15] Steven Greenhouse, With Day of Protests, Fast-Food Workers Seek More Pay, N.Y. Times, (Nov. 29, 2012), https://www.nytimes.com/2012/11/30/nyregion/fast-food-workers-in-new-york-city-rally-for-higher-wages.html
[16] Id.
[17] Patrick McGeehan, After Winning a $15 Minimum Wage, Fast Food Workers Battle Unfair Firings, N.Y. Times, (Feb. 12, 2019), https://www.nytimes.com/2019/02/12/nyregion/fast-food-worker-firings.html (last visited Oct. 13, 2019).
[18] Katie Johnston, Progressive Marriot Contract Could have Ripple Effects, Boston Globe, (Dec. 5, 2018), https://www.bostonglobe.com/business/2018/12/05/progressive-marriott-union-contract-could-have-ripple-effects/VljiCqd8IKev9R7OaFRSGJ/story.html?p1=Article_Inline_Text_Link (last visited Oct. 13, 2019).
[19] See Id.
[20] Katie Johnston, Battery Wharf Hotel Workers Poised to Strike, Boston Globe, (Jul. 24, 2019), https://www.bostonglobe.com/business/2019/07/24/battery-wharf-hotel-workers-poised- strike/O7cAO7yRZ6CPtRCFwYhhAI/story.html
[21]Business-Labor-Ideology Split in PAC & Individual Donations to Candidates, Parties, Super PACs and Outside Spending Groups, OpenSecrets.org, https://www.opensecrets.org/overview/blio.php?cycle=2016 (last visited Oct. 13, 2019).
[22]Annual Lobbying in Labor, OpenSecrets.org, https://www.opensecrets.org/lobby/indus.php?id=P (last visited Oct. 13, 2019).
