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How labor unions found their footing in 2023

Labor unions enjoyed an extraordinary year in 2023.

The president joined a picket line for the first time in history, the public broadly supported unions through a volatile economy, and a wave of high-profile strikes won significant bargaining victories for workers, signaling a resurgence of the US labor movement.

The nearly 50-day strike by the United Auto Workers against the Big Three Detroit automakers won workers substantial pay increases and cost-of-living adjustments. Their tactics of wielding a more targeted “stand-up” strike — calling on certain union factories to not work instead of a simultaneous strike — also grabbed headlines and appeared to catch the automakers off guard. Auto workers also counted President Joe Biden, who joined the picket lines at a General Motors (GM) facility in Michigan, as an ally.

SAG-AFTRA member John Schmitt, second from right, and others carry signs on the picket line outside Netflix on Wednesday, Sept. 27, 2023, in Los Angeles. (AP Photo/Chris Pizzello)
SAG-AFTRA member John Schmitt, second from right, and others carry signs on the picket line outside Netflix on Wednesday, Sept. 27, 2023, in Los Angeles. (Chris Pizzello/AP Photo) (Invision)

Entertainment industry professionals led their own monthslong strike against Hollywood studios, eventually claiming higher pay, improved compensation for streaming productions, and guardrails around the use of artificial intelligence.

From the start of the year through mid-December, workers have organized strikes nearly 400 times, according to the Labor Action Tracker from Cornell University’s School of Industrial and Labor Relations. Those labor actions pulled in hundreds of thousands of workers.

“Workers are striking and forming unions because the US economy has churned out radically uneven income growth for decades, stemming from unbalanced bargaining power in the labor market,” said Margaret Poydock, a senior policy analyst at the Economic Policy Institute.

The growing sense of labor’s nascent power doesn't stem just from the backing of powerful political leaders and heightened media attention. It is also borne out in the data.

The National Labor Relations Board (NLRB) continues to see increased demand for action.

Labor union members enjoyed the backing of President Joe Biden who urged the Big Three automakers to offer their workers better pay (Photo by Scott Olson/Getty Images).
Labor union members enjoyed the backing of President Joe Biden who urged the Big Three automakers to offer their workers better pay. (Scott Olson/Getty Images). (Scott Olson via Getty Images)

The number of unfair labor practice charges filed in fiscal year 2023 increased 10% from the year prior, according to the agency. During the same period, the NLRB saw an uptick in union representation petitions — more than 2,500 petitions were filed, accounting for a 3% gain over the previous fiscal year. The increase built on 2022’s surge, when the agency saw a 53% increase in paperwork from employees seeking to form a union.

Ongoing strikes — and the threat of new ones — have generated their own kind of leverage and momentum.

UPS workers secured what Teamsters general president Sean O'Brien called “the most lucrative agreement the Teamsters have ever negotiated at UPS” without actually going on strike. Workers secured a five-year agreement covering more than 300,000 delivery and warehouse workers, averting what would have been the largest single strike against a company in US history and an estimated $7 billion hit to the US economy.

Union leaders expect the success of the strikes to generate more victories. The UAW, for instance, has said it will embark on a union drive to organize non-union plants, including those owned by Tesla (TSLA) and several foreign car companies.

Still, labor’s moment in the sun comes at a time when the movement has been historically weakened.

The share of workers who are members of unions was 10.1% in 2022, down from 2021’s 10.3%, according to the Bureau of Labor Statistics, which publishes union membership data every January for the preceding year.

The unionization rate for 2022 was the lowest on record, according to the Bureau. But even as the rate fell, the actual number of workers belonging to unions, at 14.3 million, increased by nearly 300,000 from the year prior. The labor force saw a disproportionately large increase in the number of workers compared with the increase in the number of union members, which led to a drop in the union membership rate, the Bureau said.

Prominent leaders including US Representative Alexandria Ocasio-Cortez threw their support behind UPS workers who threatened to strike but eventually struck a deal. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)
Prominent leaders including US Representative Alexandria Ocasio-Cortez threw their support behind UPS workers who threatened to strike but eventually struck a deal. (TIMOTHY A. CLARY/AFP via Getty Images) (TIMOTHY A. CLARY via Getty Images)

How do historically low unionization rates square with labor’s recent popularity and amped-up organizing activity?

Experts say low membership rates reflect the difficulties of forming unions and negotiating contracts under a legal regime that favors corporate power, rather than workers rejecting unionization and collective bargaining.

“We are seeing a long-term decline because of employer avoidance of unions,” said Poydock, the EPI analyst.

The unionization effort at Starbucks (SBUX), she said, is an example of a company exploiting the labor law system. More than 300 stores have voted to unionize over several years, she noted, but workers have yet to achieve a contract.

Starbucks referred Yahoo Finance to recent statements from its executives affirming a goal of reaching ratified contracts for union-represented stores in 2024.

Even what experts say is corporate intransigence appears to be softening.

Starbucks in recent weeks has taken a more accommodating approach to its union-represented stores. In a letter earlier this month to the president of the Workers United union, which represents about 350 locations in the US, Starbucks chief partner officer Sara Kelly proposed restarting stalled bargaining talks with the goal of achieving labor agreements next year.

Other organizing drives provide examples of management avoiding an adversarial approach to labor. In an unprecedented move in the tech world, Microsoft (MSFT) pledged last week to remain neutral if US-based workers pursue unionization, making it easier for employees to organize. The deal was announced alongside the AFL-CIO union federation, which is also working with the tech giant to navigate labor issues tied to the advancement of AI.

A map showing the number of labor strikes and protests across the country this year. (Source: Cornell University's School of Industrial and Labor Relations)
A map showing the number of labor strikes and protests across the country this year. (Cornell University's School of Industrial and Labor Relations) (ILR School Labor Action Tracker)

"Never before in the history of these American tech giants, dating back 50 years or so, has one of these companies made a broad commitment to labor rights, formalized it, and put it in writing," said AFL-CIO president Liz Shuler at an event unveiling the deal.

The recent national push to unionize, especially in areas without labor roots and among bargaining units comprised of a small number of employees, shouldn't be expected to dramatically move the data so quickly, said Ileen DeVault, a professor of labor history at Cornell University.

“Is this going to instantly raise the unionization rate? No, not instantly,” DeVault said. "It will be small and it will take a long time. But I think we are heading into something.”

Read Yahoo Finance’s countdown of the biggest stories of 2023:

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.

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