We may be at the beginning of a new era of labor power

05 December 2022

Despite major tech layoffs and ongoing fears of a recession, unemployment in the US remains low. In the long term, businesses are likely to continue to struggle to fill positions. That creates an opportunity for unions. And there are encouraging signs that workers are seizing the moment.

There’s no doubt that the economy is slowing, with ugly consequences for some workers. Tech companies have been laying off employees at a brutal rate. Amazon plans to lay off about 10,000 workers. Hewlett-Packard has announced plans to lay off 4,000 to 5,000 people in the next few years.

NBC estimates tech layoffs this year could hit more than 137,000.

READ MORE: Know thine enemy: Time to strike

Higher interest rates and a slowing job market contributed to a 3.7 percent unemployment rate in October, higher than the 3.5 percent estimate.

Job gains were lower than in any month since December 2020. Many economists still expect a recession in 2023. That’s the bad news.

The good news is that the non-farm economy still gained 261,000 jobs in October, higher than the estimated 205,000, and barely down from 263,000 in November. Overall, the economy grew faster than expected in the third quarter. Relatively low unemployment seems likely to continue in the long term, despite short-term variations.

There are two reasons for that.

An aging workforce and falling immigration.

Shrinking workforce

The median baby boomer turned 65 in 2022, and the pandemic has encouraged retirements. In the third quarter of 2021, 66.9 percent of people between 65 and 74 were retired, up from only 64 percent in the same quarter of 2019.

Economists thought that some of these retirees might return to the workforce, but that hasn’t really happened. Instead, retirements have continued high, contributing to workplace shortages.

Net migration to the US has collapsed simultaneously thanks to Trump era restrictions and the pandemic. Net migration to the US in 2021 was the lowest in decades. Only 247,000 people were added to the US population through immigration, in comparison to 568,000 in 2019 and more than 1 million in 2016.

According to one estimate, the US has a deficit of 1.4 million immigrant workers relative to pre-pandemic trends.

Little wonder, then, that US employers have struggled to fill positions, even as covid restrictions have largely ended. Some industries do have a surplus of workers now, like construction and mining. But others, like hospitality, education and health care, continue to have widespread vacancies.

In the first nine months of fiscal year 2022 (October to June), union election petitions were up 58 percent over the same period in 2021.

Moreover, unions won 641 of those elections—the highest number of union victories since 2005. The win rate of elections has been 76.6 percent, as high as any success rate since 2000.

Union boom

Not coincidentally, the industries where employers need more workers are also industries that have seen an increase in worker organizing.

The single company contributing most to unionization success is Starbucks. The first three Starbucks stores filed union election petitions in August 2021. In the next eight months, almost 250 stores followed suit.

Traditionally, food and drink retailers like Starbucks have had dismally low union participation. In 2021, 1.2 percent of workers in the sector were unionized, according to the US Labor Department.

An NPR analysis found that 10 years ago only 4 percent of union election petitions came from the accommodations and food service industry. In the beginning of 2022, in comparison, the sector was responsible for 27.5 percent of union election petitions.

Starbucks workers have organized heroically in the face of a vicious union-busting campaign by CEO Howard Shultz. Among other tactics, Shultz is accused of illegally boosting benefits and wages, but only for non-union employees.

Their efforts have been aided by the labor crisis in the industry. Many Starbucks locations, like businesses throughout the hospitality industry, have faced major shortages.

Pandemic disruptions to higher education also gave graduate students and adjuncts more leverage in dealing with university employers. In 2020, four universities signed contracts with graduate student unions, doubling the total number of private institutions with union agreements.

These successes helped to boost a long-term trend. Over the last 10 years, faculty union chapters at private schools have increased by 80 percent.

This month 48,000 academic workers at the University of California declared a strike that has entered its third week as they call for better pay, benefits and job security. The strike includes postdoctoral scholars, teaching assistants and graduate students, and has disrupted classes and laboratories.

A new day for labor

Wages have been stagnant for four decades in the US. Suddenly workers are at a premium, but wage growth continues to lag inflation. It’s no wonder that workers are using their greater power to unionize.

Unionization is a solid strategy for raising stagnant wages. Non-union workers make only 83 percent of unionized weekly earning. But unions ultimately raise wages for all workers.

One report estimated that the decline in unionization from 1979 to 2017 cost the average worker the equivalent of $3,250 a year. Deunionization depresses the wages of middle-wage earners more than those of high-wage earners, and so contributed to the 23-point growth in the wage gap between high and middle earners over the same period.

If the US moves back toward higher union concentration, it will move toward a stronger, more affluent middle class, and less inequality.

The business class and rightwing politicians oppose this. President Biden tried to get a bill through Congress allowing the National Labor Relations Board to fine labor law violators this year. It passed the House, but Republicans and conservative Democrats in the Senate killed it.

But the long-term trend of labor shortages in key industries, and organizing momentum in new sectors, is a promising development.

If we’re lucky, we may be at the beginning of a new era of labor power.

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