Worker activism and worker organizing have both increased substantially. In a recent post, I chronicled how and why workers in the United States are on strike in larger numbers than in a generation. It is fair to ask, will this greater worker activism and worker militancy continue if the unemployment rate rises? I have discussed that question with both sets of panelists on the Power At Work Blog’s Power Hour blogcasts: here and here. This post continues and expands that discussion. It also explains why strikes and worker collective action will continue at higher-than-expected, if not historic, levels even if the unemployment rate climbs and labor markets grow more slack.
During a recent appearance on CNBC with me, James Pethokoukis of the American Enterprise Institute posited that the current strike wave is largely a function of “tight labor markets” --- economists’ phrase for low unemployment and job openings exceeding the number of unemployed workers. The implication in his comments and others’ similar statements is that worker activism would not survive a higher unemployment rate and greater slack in American labor markets.
This is not a crazy or nakedly anti-union assessment. It is economic orthodoxy. Let’s examine why it might be true.
Strikes are economic struggles between employers and unions in which both sides are trying to coerce the other side to agree with their demands at the collective bargaining table. Union members walk off the job to impose costs on their employers as a means of increasing pressure on them (let’s put aside “unfair labor practice strikes” for the purposes of this discussion). Higher costs mean more pressure to agree with the union. If the employer is able to replace the striking union members with other workers --- whether temporarily or permanently --- they can meaningfully reduce those costs.
Tight labor markets make it harder to replace strikers and, therefore, increase employers’ costs during strikes. Low unemployment means there are very few workers available to fill any available jobs; so, employers will find it very difficult to find workers able to replace striking workers. Struck employers would have to compete with other employers recruiting workers. Wages would likely rise as a result. Thus, when labor markets are tight, a striker replacement strategy likely would be expensive and slow, and it is much more likely fail. So, employers’ costs from a strike will be difficult to reduce. This means more pressure on the employer and more power for the strikers.
Strikes also impose costs on the strikers. Their incomes decline as they miss paychecks. Strike benefits replace only a portion of those wages or salaries. Strikers may lose health insurance and other workplace benefits. In addition, the risk of being “permanently replaced” at your job can be deeply frightening and, if the risk becomes a reality, economically devastating. The only difference between “permanent replacement” and firing, which would violate labor law, is that the replaced striking worker must be given an opportunity to return to their job, but only after the permanent replacement worker has vacated the job (or been moved out of the job by the employer). That wait can last for months or years. During that potentially lengthy period of time, replaced strikers need to support themselves and their families. If they obtain regular and substantially equivalent employment, the law says they are no longer entitled to return to their job. In essence, they have been fired.
Again, tight labor markets benefit the strikers. As noted above, employers are likely to find that replacing strikers when labor markets are tight is difficult. Similarly, the ready availability of alternative jobs for striking workers in the event they are replaced should reduce the pressure they feel because they could be replaced. Of course, no one wants to lose their job “permanently.” Yet, workers’ risk and workers’ fears should be lower when they can, like the tens of millions of workers who have quit their jobs over the last two years, find another good-quality job in a reasonable amount of time.
In this simple model of how labor markets, strikes, and striker replacements work, it is easy to see how an increase in unemployment and greater slack in labor markets would reduce worker power and thereby reduce the number and frequency of strikes. Employers would be better able to find replacement workers. Competition for those workers would be less intense and, so, wages would not increase at the same pace, or at all. Strikers would be less able to find alternative jobs if they were to be replaced. In sum, employers’ position would be stronger and strikers’ position would be weaker.
Now, let’s examine the big weakness in this simple model analysis that has been disclosed by the last couple of years of strikes.
The simple model does not take into account that some workers are easily replaced, and other workers are not. A large percentage of the largest strikes and near-strikes in the United States over the last several months --- the Teamsters at UPS, the Writers Guild and SAG-AFTRA in Hollywood, the UAW and the Big Three Automakers, and the Coalition of Kaiser Permanente Unions --- have involved unions representing workers who are difficult to replace because of one or both of two critical characteristics.
First, some of these unions represent workers in occupations that have high barriers to entry: skills, credentials, licensures, experience, or knowledge, for example. You can’t just show up one your first day of work and write a television script, perform physical therapy, or build a car. You can’t walk onto a campus and become a graduate student worker or an adjunct professor. As a result, higher overall unemployment and a slacker labor market may not make it measurably easier for their employers to replace these workers in the event of a strike. Except perhaps in the deepest and most comprehensive recessions, unemployment does not rise evenly across occupations. Finding, recruiting, and hiring workers with particular skills, credentials, licenses, experience, and knowledge is likely to remain difficult even if unemployment rises substantially.
Second, some of these unions represent so many workers that replacing them, especially in a short span of time, is inconceivable. Where would UPS find 330,000 replacement truck drivers? Where would the Big Three automakers find 150,000 auto workers? How would the University of California replace 36,000 graduate workers? Where would Kaiser Permanente find thousands of certified nursing assistants during a strike when they were having trouble filling vacant positions even before the strike (in fact, that was one of the strike’s causes)? Unless unemployment were to rocket to Great Depression/Great Recession/pandemic recession levels, wholesale replacement of tens of thousands or hundreds of thousands of workers in a short period of time during a strike is going to remain difficult. Even among pessimistic economic pundits, projections are that a recession in 2023 or 2024 would mean that the unemployment rate will rise only moderately and the number of unemployed workers might match the number of announced job openings. There will not be millions of desperate workers eager to cross picket lines and take replacement jobs.
There is another category of unions and workers who are not launching as many large-scale, longlasting strikes right now: those in industries or occupations with low barriers to entry for new employees and insufficient density of workers. For example, Workers United has organized more than 350 Starbucks stores. Starbucks has insistently and illegally refused to bargain in good faith, so none of these newly organized baristas is working under a union contract. Yet, Workers United has not launched a large-scale strike. Workers United may have other strategic reasons for this decision, and there have been short-term strikes at individual Starbucks stores. Yet, it also may be that a few hundred stores out of thousands, and thousands of baristas out of tens of thousands, may not be enough density for a strike to be effective. Further, while baristas’ work is appreciated by their customers, replacing a striking barista is not as difficult as replacing a striking radiology technician.
The same observation could be made about the warehouse workers at Amazon’s JFK8 warehouse in Staten Island. Amazon also has illegally refused to bargain a contract. Yet, the Amazon Labor Union has not called a strike. That may be because a strike by these workers would not be effective. Even given the state of the economy, and strong support for unions among the public and progressive politicians, and increased worker militancy, these unions and others representing workers like these simply do not have the requisite power to strike as an effective tactic to achieve their goals.
As an aside, this is where labor law is supposed to step in. The National Labor Relations Act has as one of its central purposes “restoring equality of bargaining power between employers and employees.” But it is broken. There is no effective legal remedy right now for employers’ refusal to bargain in good faith with employees whose unions cannot force them to bargain by striking. National Labor Relations Board General Counsel Jennifer Abruzzo has a plan for better interpreting the law to impose more effective remedies, but the NLRB has not yet adopted that plan.
Nonetheless, most of the larger, longer lasting, and high-profile strikes in the United States over the last three years have involved unions whose members are either protected by barriers to entry into their industries or occupations, or by massive density in their industry or with their employer. These strikes likely are not as sensitive to changes in the labor market. Certainly, there are small strikes by workers of all kinds all over the country, including non-union workers, according to Johnnie Kallas of the Cornell ILR Labor Action Tracker. But even short strikes by groups of outraged workers seeking redress of a particular workplace problem probably are not especially sensitive to labor market conditions.
For this reason, slacker labor markets alone will not be enough to drive down worker activism and worker militancy to the low levels that characterized the first two decades of this century. The number of strikes may not remain at generational levels indefinitely. It is entirely possible that worker activism and strikes may decline for some of the least empowered workers in our society. That would be a bad thing. But greater worker activism and collective action for many workers should outlast today’s tight labor market.
