A look at labor: Economics professor explains unions’ banner year

The labor movement is having a moment.

Over the past two years, union workers everywhere from Kellogg’s to John Deere to Kaiser Permanente declared strikes, demanding better working conditions and higher wages. Just last month, railway unions and freight companies narrowly avoided a strike that would have shut down the nation’s major shipping lines.

In addition, union interest has grown across the country. The National Labor Relations Board (NLRB) has reported a 57% increase in petitions to form unions, a significant uptick after decades of waning support for labor. Most notably, Starbucks and Amazon workers have led efforts for unionization despite opposition from their employers.

What’s driving this national moment for organization and collective action? John Heywood, a distinguished professor in UWM’s Department of Economics and the director of the graduate program in human resources and labor relations, has been pondering this question. He says that the United States is at a unique point in history, with three main factors converging to give labor unions a banner year.

The driving forces

• A tight labor market

Unemployment is low, labor force participation has shrunk, and that means that workers have increased power over their circumstances. Labor force participation refers to the share of adults who are working or who are looking for work.

With those factors, businesses are having a hard time finding enough workers to fill the job openings they have, Heywood said.

“For the first time since at least the late ‘70s, you can walk up to a factory and find a well-paying middle class job – without a college education,” he observed.

• The COVID-19 pandemic

The coronavirus and the labor market’s response to it revealed how unevenly certain industries treat employees.

“The line workers were often working in unsafe conditions trying to keep the business open, while managers and white-collar workers worked from home,” Heywood said. “The ‘essential workers’ kept the place going and faced much greater risk and hardship.”

Heywood says it’s no coincidence that workers in industries like health care, shipping, warehousing, retail, and restaurants are now the ones organizing unions.

• A friendly White House

President Biden and his administration have, for the most part, been supportive of unions, Heywood said.

“He likes to call himself ‘America’s most pro-union president,” he added, noting that Biden has appointed people to the NLRB and interceded on behalf of unions in the past.

Whether Biden has actually earned that moniker is a matter of opinion, but “You’re less likely to face administrative barriers if you’re trying to create a union. I think that helps as well,” Heywood said.

Caveats to the labor movement’s momentum

Heywood warned that voting to unionize is only half the battle.

“The next step is reaching a first contract, which sets the stage for subsequent contracts in the ongoing labor management negotiations,” he said, noting that it can often take a year or more to reach a contract. “(Of the) 225 Starbucks that accomplished Step 1 (voting to unionize), none have reached the next stage.”

Employers frequently throw up road blocks to contracts. While they are supposed to bargain in good faith, Heywood said, it’s difficult to prove if they are not, and the penalties for not doing so are minimal. If an employer fires a union organizer, for example – an illegal retaliatory action– the typical penalty is only that they must rehire that worker.

“Of course, the unions are going to push for better working conditions and higher wages, and that’s costly,” Heywood acknowledged. “But we know lots of employers that have tried to avoid unions by giving (workers) a lot of (their demands) already. So that indicates that … the major part of their opposition is that the loss of control is very costly.”

Heywood thinks that most businesses that want to avoid unions do so because they will lose some of their control over their employees. Unions may give workers more of a say in how the business is organized, how employees may be hired and fired, how workplace safety issues are managed, and more.

“I think it’s fair to say that most American managers view unions as a managerial failure,” Heywood said.

Labor in Wisconsin

Once one of the most progressive states for labor, laws like Act 10 and Right to Work have stripped Wisconsin unions of much of their power. Act 10, passed in 2011, curtails the right of public sector unions to collectively bargain, with the exception of police and fire unions. Right to Work ensures that workers cannot be forced to join a union at their place of employment. That means that a worker will not have to pay dues to support a union, even though they might still reap the benefits of the union’s negotiations with the employer.

That hasn’t stopped for the push for unions in Wisconsin. Colectivo Coffee employees voted to unionize by thinnest of margins last year, and their vote was certified by the NLRB in March. Workers at UW Health have also been seeking to unionize, hoping to gain better working conditions after the pandemic left them overworked and understaffed.

“It’s an ongoing process, trying to find common ground in industry, and making worker’s lives richer, and helping firms investigate progressive participation,” Heywood said. “A union need not be a managerial disaster; there are successful instances of labor/management cooperation. So, being an eternal optimist, I hope that’s where we’re heading.”

By Sarah Vickery, College of Letters & Science