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Striking times
Joe Biden’s love of unions runs into a giant strike
It is easier to support workers when they aren’t
hurting the economy
IT IS SOMETIMESsaid that Americans are not class-conscious. A few minutes of listening to
Shawn Fain, president of the United Auto Workers, one of the country’s biggest
unions, ought to put that notion to rest. “The very existence of billionaires
shows us that we have an economy that is working for the benefit of the few and
not the many,” he told UAW members in a recent
live-stream. His theme was that workers were losing out while companies were
profiting. “Why is that?” he asked. “So another asshole can make enough money
to shoot himself to the moon?”
Mr Fain was at his fiery best because he
was rallying his troops ahead of a possible strike against the “Big Three”
carmakers in Detroit, Ford, GM and Stellantis, when
their contract ends on September 14th. (Stellantis’s biggest shareholder, Exor,
also owns part of The Economist’s parent company.)
That would mark the culmination of a heated few months in American labour
relations. The 146,000 UAW members who could walk
out, starting with strikes at selected plants on Friday, would add to roughly
190,000 other workers, including actors, screenwriters and hotel staff, already
on the picket line. Together, more American private-sector employees would be on strike than at any
point since the 1980s.
When strikes have been averted recently,
the terms have been favourable for workers. UPS, a
delivery company, agreed in July to lift pay and benefits for its drivers to
$170,000. Some in the labour movement think they are just getting started. Or
as Mr Fain says: “Our fight is not just for ourselves but for every worker.”
That could end up posing a conundrum for
Joe Biden. A favourite boast is that he is the most pro-union president in
American history. Academics would debate that, with many giving the nod to
Franklin Roosevelt (in power when the right to collective bargaining was
enshrined in law). Few, however, would object to calling Mr Biden the most
pro-union president in the past 80 years. Not only has he repeatedly voiced
staunch support for workers, he has overseen funding commitments, rule changes
and personnel appointments that are handing more power to unions—a profound
shift after decades in which they were regularly undermined. But a wave of
strikes, with the potential to inflict damage on the economy, may test the
depths of Mr Biden’s fondness for unions.
What makes the work stoppages so
remarkable is that American unions have been in decline for decades, in effect
reducing the pool of potential strikers. Just 6% of private-sector workers are
in unions today, down from about 30% in 1970. Could the decline now be over?
Flickers of a rebound in labour activism were first visible in 2018 and 2019,
when the total numbers of American workers on strike hit three-decade highs.
Most were public-sector employees, especially teachers.
Strikes this year have spanned a wider
variety of sectors: entertainment, logistics, manufacturing, construction,
cleaning services and more. “The discontent is comprehensive. You see workers
in industries that have never been unionised,” says Kent Wong of the University
of California, Los Angeles. Perhaps the biggest labour headlines since 2020
have come from the successes of workers at an Amazon warehouse in New York and
at about 350 Starbucks cafés (and counting) in forming unions. Liz Shuler, head
of AFL-CIO, America’s largest federation of unions,
describes it as “the awakening happening in this country”.
But some observers see it as a fleeting
moment for labour. The job market has been unusually tight for five years (with
the exception of 2020 at the start of the covid-19 pandemic). The unemployment
rate has consistently been below 4%, flirting with a five-decade low. Sensing
that they have the upper hand, many workers have quit for better pay elsewhere:
as a result Americans on low incomes have enjoyed much faster wage growth than
their high-income compatriots since 2019. For those in unions or wanting to form
unions, the same dynamic has given them leverage.
But economic data in the past couple of
months show that staff shortages are unwinding, with more people entering the
labour force at the same time as companies cut back on hiring. “As labour
demand comes more in line with labour supply, the balance of power will tilt
back toward managers,” says Michael Strain of the American Enterprise
Institute, a think-tank.
The counterargument, that increased
labour activism will be more enduring, rests in large part on the actions of Mr
Biden. His industrial policy—roughly $1trn in subsidies for
semiconductors, electric vehicles and renewable energy—has been crafted with
workers in mind. Much of the funding is contingent on commitments to pay fair
wages. Some of the tax breaks have also included wording that companies should
remain neutral when their workers try to organise unions. That proved important
at Blue Bird, a school-bus maker in Georgia, a state hostile to unions. In May
a majority of workers there voted to join a union, a breakthrough for the
labour movement in the South.
The regulatory landscape has also changed
under Mr Biden. His appointees to the National Labour Relations Board (NLRB), which enforces labour law, have made it easier for
workers to hold union elections and harder for companies to block them. Not
only has the NLRB overturned company-friendly rules
passed under Donald Trump; it also rejected a standard that had stood since
1971 allowing bosses to challenge whether unions truly command majority
support. Jennifer Abruzzo, the NLRB’s general
counsel, appointed by Mr Biden, is lauded by labour leaders as their fiercest
champion in years.
Mr Biden’s support for unions appears to
be genuine. He often looks more comfortable in the company of factory workers
and labour organisers than with tech billionaires and Ivy League-trained
lawyers. He has long proclaimed that union jobs are good jobs—for workers and
for America.
Electoral calculations undoubtedly figure
in his thinking, too. Surveys show that nearly 70% of Americans now approve of
unions, close to a six-decade high (though unions’ loss of clout over the years
may help to account for their popularity today, because few people have
experienced the fallout from work stoppages). And unions mostly approve of Mr
Biden: he has already received an endorsement from the AFL-CIO,
its earliest endorsement ever for a presidential candidate. Many of their
rank-and-file may still prefer Mr Trump, but Mr Biden carried a majority of
union households in the 2020 election.
However, if Mr Biden likes unions, it is
much less clear that he likes strikes. Unions have succeeded not because
companies see win-win outcomes in dealing with them but because they fear the
consequences of not doing so. “It’s a struggle. It’s a zero-sum game,” says
Nelson Lichtenstein, a labour historian. An impasse at Starbucks supports his
point. Although hundreds of cafés have unionised, workers say the company
refuses to bargain with them. “It would require some kind of chaos, doing real
damage to the Starbucks reputation, to change that,” he says.
Mr Biden has shown little stomach for
chaos. In December he approved a bill to force rail workers to sign a contract
and stay on the job, averting a strike that would have caused logistical
problems throughout the country. He does not have the same legal authority to
forestall a UAW work stoppage. But a strike at the
Big Three would cause big losses for the carmakers that would, over time,
cascade to other manufacturing firms in Michigan, a swing state in the 2024
election.
Mr Biden has told reporters that he does
not think a strike will happen. Mr Fain, the UAWleader, professed shock at hearing such confidence, saying that a strike is
“highly likely”. The UAW also happens to be one of
the largest unions to refrain so far from endorsing Mr Biden, upset that his
administration’s funding for electric vehicles is shifting production away from
unionised facilities. Mr Fain says that a UAW strike
will offer politicians a chance to pick sides between billionaires and the
working class. It is an awkward ultimatum for a president who thinks his
fidelity to unions should already be plain to see. ■
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