Analyzing the Impact of Labor Strikes: Who Comes Out Victorious?

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Analyzing the Impact of Labor Strikes

Detroit, Michigan – October 6, 2023

In a year marked by a surge in labor strikes, with over 100 recorded so far in 2023, the question looms large: do these strikes truly benefit the employees who participate, even as they put their livelihoods on the line? Kaiser Permanente’s 75,000 union workers and negotiators have recently joined the ranks of striking labor forces, bringing this query into sharp focus.

According to data from the Cornell University School of Industrial and Labor Relations, the strikes witnessed in 2023 represent a staggering 65 percent increase compared to the previous year. Each strike, however, must be evaluated on its unique merits, considering the potential risks and rewards involved.

Dr. Sheldon H. Jacobson, Ph.D., from the University of Illinois at Urbana-Champaign, weighed in on the matter, stating, “Every single strike has to be weighed on its own merit. Does it make sense? Where are the risks and rewards?” Dr. Jacobson raised an essential point, questioning why the focus often centers on workers while the leadership of unions like the United Auto Workers (UAW) continues to earn substantial salaries.

The UAW, currently in a tense contract negotiation with major auto manufacturers, originally sought a 40 percent hourly wage increase over four years for its members. The average wage for a UAW member working on a manufacturing production line currently stands at $28 an hour, as reported by the Bureau of Labor Statistics. Notably, UAW President Shawn Fein earned $160,000 as an administrative assistant prior to his election this year, while former president Raymond Curry received $267,126 in 2022.

As the UAW and the Big Three auto manufacturers engage in protracted negotiations, Dr. Jacobson suggests that the timing of the strike is motivated more by the high level of strike funds than by worker concessions from Ford, General Motors (GM), and Stellantis. He elaborates, “The people who get the most benefit from striking is the union leaders, and the demands they’re putting forward are unfeasible. They wanted to be on strike for a while and bring the strike fund closer to the lower end to the $650 million level, and as soon as they get close to that, they’re going to settle.”

Meanwhile, negotiations between the Coalition of Kaiser Permanente Unions and the healthcare provider continue tirelessly, with some reports indicating progress. The three-day work stoppage commenced on Wednesday, reflecting the complex dynamics surrounding strikes.

In prolonged strike negotiations, such as the ongoing one with the UAW, some argue that the primary focus should be on obtaining the best deal for workers. Little thought, they say, is given to the overall cost borne by employees who leave their jobs to support their unions. Brett Miller, a labor and employment attorney in Detroit, warns that “Sometimes no one wins from these strikes, and it can come down to the battle of attrition that creates this mutually assured damage. My instinct tells me that this one [the UAW strike] is going to be a long one.”

The repercussions of strikes can extend to the job security of workers involved. For instance, GM has laid off approximately 2,000 employees since the strike’s inception, while Ford has laid off an additional 930 workers.

Living on a strike pay of $500 per week for an extended period also poses challenges for those on the picket line. Long-time UAW member Debbie Oszust expressed her preparedness for such situations, stating, “You have to change a lot of things—go get loans if you don’t have the money, put it away in the bank, change your bills around. My whole lifestyle is different, and my husband is disabled at home, so I’m the sole supporter of my family.”

The consequences of a lengthy strike can be far-reaching. The last UAW strike in 2019, which lasted 40 days and targeted GM, resulted in significant losses for both the company and its employees. GM reported a loss of $2.6 billion in earnings, while workers collectively lost a billion dollars in wages during that period.

The current UAW strike is distinctive as it targets all Big Three automakers simultaneously and includes a demand for a 32-hour workweek, a demand that some experts believe could potentially bankrupt these automakers.

As negotiations continue, GM has already reported losses of $200 million due to the strike, and the UAW is expected to provide an update on its negotiations via Facebook Live in the coming days. The outcome of these strikes remains uncertain, leaving workers, union leaders, and employers in a state of flux.

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