America’s Workers Are Fighting Back: Can They Win?

If you want to know what’s happening in the economy, Hollywood isn’t usually the best place to start, but now may be an exception. Over the weekend, the leaders of the International Alliance of Theatrical Stage Employees, the union that represents television and film-production workers, including grips, gaffers, prop makers, electricians, makeup artists, editors, agreed on a new three-year contract with the Alliance of Motion Picture and Television Producers. The organizations arrived at a set of terms, after union members voted to approve a strike, that would provide retroactive pay increases and improved working conditions. However, it’s not clear that the union’s members will ratify the deal. After it was announced, thousands of them posted comments on social media saying it didn’t meet their goals, which include limiting the length of the workday and bolstering the union pension plan.

The film and television workers aren’t the only ones making demands. Last Thursday, about ten thousand members of the United Auto Workers walked off the job at fourteen John Deere plants. The first strike action in thirty-five years at the heavy-equipment manufacturer came after workers rejected a tentative agreement that union leaders and management had negotiated. This agreement would have given workers a pay increase of five or six per cent this year, guaranteed raises in 2023 and 2025, lump-sum bonuses, and a restoration of some cost-of-living adjustments that had previously been eliminated. Compared to some of the harsh contracts that have been forced upon members of the U.A.W. in recent decades, this offer looked relatively benign. But with Deere making record profits, the striking workers are understandably demanding further changes, such as insuring that retirement benefits for new workers match those of existing workers.

In a country with a workforce of more than a hundred and sixty million people, these two strike votes don’t add up to a new era of labor relations. But these aren’t isolated disputes. Earlier this month, about fourteen hundred workers at the cereal giant Kellogg walked off the job to protest the company’s proposed two-tier pay system, in which newer hires would get lower pay and fewer benefits. Two thousand health-care workers went on strike at a Buffalo hospital in a battle over wages and working conditions, and more work stoppages may well be on the way in the embattled health-care sector. Last weekend in California and Oregon, twenty-four thousand employees of Kaiser Permanente, one of the state’s biggest insurers and hospital chains, voted to authorize a strike. More strike authorizations by health-care workers could come in Colorado, Georgia, Hawaii, Maryland, Virginia, Washington and the District of Columbia, the Alliance of Health Care Unions said.

Each of these disputes arises from a specific set of circumstances, but there is also a common factor fuelling this wave of labor activism: the tightness of the labor market. In a pandemic-scarred economy where many people have dropped out of the workforce for various reasons, employers are struggling to fill jobs at the wage levels they want to pay. In August, the most recent month for which figures are available, there were 10.4 million vacancies, far more than the number of people officially classed as unemployed.) In these circumstances, many workers are exploiting newfound leverage to get the best deal they can.

In unionized industries, this takes the form of collective bargaining and, where necessary, voting for strikes. In non-unionized industries, which make up the vast bulk of the American economy, it shows up in workers leaving their jobs and looking for higher-paying ones. In August, 4.3 million workers quit—the highest monthly figure since at least 2000. A surge in COVID-19 cases probably contributed to the August number. But resignations have been running at record levels for much of this year. “It suggests that workers’ outside options are improving faster; many of them think they can do better elsewhere,” Aaron Sojourner, a labor economist at the University of Minnesota who worked in the Obama White House, told me.

For decades, the leverage has been on the side of management. The Federal Reserve, by targeting low inflation, has, for most of the time, kept the unemployment rate high enough to undermine the bargaining power of labor. And, as Karl Marx pointed out way back as 1867, there is nothing like a “reserve army” of jobless workers to keep in check the demands of those who are employed. Globalization and the corporate-backed undermining of labor laws have also played a role. Using the threat of hiring replacement workers or offshoring production, companies have been holding down employee compensation. The result: wage stagnation, soaring corporate profits, and rising inequality. At John Deere, experienced assembly-line workers can earn between forty thousand dollars and sixty thousand dollars a year. Last year, John May, the firm’s chief executive, made nearly sixteen million dollars. (His predecessor, Samuel Allen, earned more than twenty million dollars in 2019. This has been the typical pattern in American business throughout the post-Reagan era. In some industries, the chasm between the shop floor and the executive suite is even wider.

Now comes the pandemic. If the current imbalance between vacancies and workers seeking employment continues for an expanded period, more firms could be forced to pay higher wages, and workers could recover some of the losses they have suffered. (In 2001, sixty-four per cent of G.D.P. went to labor compensation; by 2019, the figure had fallen to sixty per cent.) It is also possible that the experience of working through a lengthy pandemic has radicalized workers, especially frontline workers, in a manner that will strengthen the bargaining power of labor, at least for a while. As the American Prospect’s Harold Meyerson has pointed out, “the two years that saw the greatest strike waves in American history—1919 and 1946” followed tumultuous happenings (World Wars) that changed popular attitudes to work, pay, and society. It’s at least conceivable that the pandemic could have a similar effect.

There is another post-pandemic scenario, though, in which the shortage of workers gradually disappears, and the newfound activism of labor dissipates. If the number of COVID-19 cases is brought permanently under control, many people who have left the labor force—such as those nearing retirement age, and parents who quit their jobs to look after children—could be drawn back. If that happened, and the imbalance between vacancies and job-takers vanished, leverage could quickly revert to the side of the employers. “I am skeptical of the idea that there is a whole new world,” Sojourner said. “I don’t think the balance of power has shifted in a fundamental and permanent way.”

Sojourner made another important point, however: the best chance of maintaining some equity and balance in the labor market is to strengthen the hand of workers. In Washington, the Fed and Congress could achieve this by using monetary and fiscal levers to support the economy and keep the jobless rate at a low level. The Biden Administration could also beef up and enforce labor laws, by, for instance, getting the Senate to enact at least some elements of the PRO Act, which the House of Representatives passed in March. “Going forward, the ability of workers to organize and maintain gains hinges on these policy changes,” Sojourner said. “The reality is being defined on the ground right now.”

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