Call it the Great Reset. Across the US, labor unions are winning surprisingly large contract settlements as workers have reset their expectations to demand considerably more than they did just a few years ago, and that has in turn pressured many corporations to reset – and increase – the pay packages they are giving in union contracts.
The result has been a wave of impressive – sometimes eye-popping – union contracts over the past year, far more generous than in recent decades. In August, 15,000 American Airlines pilots won pay increases of 46% over four years. In a huge labor confrontation last summer, 340,000 Teamster members at UPS won raises of $7.50 an hour over five years, with drivers’ pay climbing to $49 an hour and part-time workers receiving a pay increase of 48% on average.
After a three-day strike earlier this month, 85,000 Kaiser Permanente workers won raises of 21%, as well as a $25 minimum wage for Kaiser’s workers in California. In March, 30,000 Los Angeles School District workers – bus drivers, cafeteria workers and teachers’ aides – won a 30% wage hike over four years. In Oregon, 1,400 nurses at Providence Portland hospital secured raises between 17% and 27% over two years.
Union leaders and rank-and-file workers hailed these contracts as great and historic, but Thomas Kochan, a longtime professor of industrial management at MIT, put it another way: “All this reflects a a reset in expectations and wage norms for workers and for employers.
“These successes,” Kochan continued, “are a reflection of the workforce’s strong expectations and the workforce’s demands to make up for lost ground due to inflation – and to signal that times have changed. The modest wage increases of the past will no longer be adequate to deal with our situation.”
Workers are feeling not only rising expectations, but also rising frustration and anger, seeing corporate profits and CEO pay soar, while their pay has often failed to keep up with inflation. The United Auto Workers, before going on strike a month ago against GM, Ford and Stellantis, kept hammering the point that auto workers’ hourly pay has trailed inflation by 19% since 2008, while CEO pay has jumped by 40%. The union’s initial bargaining proposal was for a 46% raise, far more than the union won from Detroit’s automakers in 2019 – a four-year contract with raises of 3% in the second and fourth years and a 4% lump sum (but no raise) in years one and three.
“I’ve talked with labor relations people at several companies,” Kochan said, “and they have had to get their CEOs and CFOs [chief financial officers] to reset their expectations. They were used to getting modest wage settlements, but they haven’t experienced this level of pressure from unions and they haven’t experienced this amount of bargaining power on the side of workers.”
Feeling angry and emboldened, workers have been flexing their muscles. There were 301 strikes in the first nine months of his year, up from 172 over the same period in 2021, according t0 ILR Labor Action Tracker. This has ratcheted up pressure on employers, and this increased militancy has often translated into better contracts.
“I’ve never seen a moment quite like this. I’ve never seen this level of action and enthusiasm among workers, especially among young workers,” said Lane Windham, associate director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. “People drew a line in terms of their expectations. For 40 years, workers have been putting up with low wages and bad jobs. But after coming through the pandemic, many people said, ‘I’m not going to do this any more. I’m not going to put up with this any more.’”
Windham said many employers had been surprised by the level of labor militancy they are encountering. “Employers are entering negotiations and beginning with their old calculations, but they’re seeing this is not business as usual. They’ve had to recalibrate what they’re willing to give.”
That has been the case with Hollywood’s studios, which didn’t expect 165,000 television and movie actors and 15,000 Hollywood writers to go on strike at the same time. Before the Writers Guild’s members walked out, Hollywood’s studios dug in against that union’s demands, but after the writers were out nearly five months, the studios largely acceded to the union’s wishes on pay, minimum staffing levels for writers and limiting the use of artificial intelligence in scripts.
“There are three main factors driving the big contract wins,” said Eric Blanc, a labor studies professor at Rutgers University. “One is the tight labor market. Second is increased union momentum generally. Third is more effective and militant bargaining methods.”
Blanc added: “You can’t underestimate how crucial the tight labor market has been and continues to be for giving workers leverage. In the past if you were on strike for an extended period and the labor market wasn’t tight, employers could replace you easily. For years, unions were reluctant to go on strike because of that. But today’s tight labor market is important for giving workers and unions confidence.”
The tight labor market has encouraged unions to think and act bigger and bolder. “If you’re not thinking big gains, there’s probably something wrong with what you’re doing as a union,” Blanc said. “People see that they can fight back and really get corporate America to cough up concessions to workers.”
Even as workers at companies with long-established unions rack up big gains, workers at some prominent, newly unionized companies, most notably Starbucks, Amazon and Trader Joe’s, are struggling to reach their first contract to win improved pay and benefits. But some newly unionized workers have won excellent contracts: this month more than 3,800 graduate student workers at MIT won a 12.6% increase in their stipend, a $10,000 needs-based childcare subsidy and an 84% dental subsidy. At the Whitney Museum in New York, the 180-member union won a 30% raise on average in its first contract, with entry-level pay jumping to $54,100 from $40,500.
Professor Kent Wong, director of the UCLA Labor Center, said the fact that unions have their strongest public approval in more than 50 years – not to mention a US president who bills himself as the most pro-union president ever – has created an atmosphere that helps unions do well in their contract fights. “They’re winning the public opinion war and they’re building on other union victories,” Wong said. “Victories inspire other victories.”
