Many unions are now winning far bigger raises and better contracts than they did just a few years ago. Some labor experts are calling this “the Great Reset.” What does it mean?
By Steven Greenhouse, Century Foundation —
Ever since Starbucks workers in Buffalo won a landmark union election nearly two years ago, there’s been growing talk of a resurgence of the labor movement, with that sense of resurgence increasing as the number of strikes and union drives has soared in recent months. But there’s one aspect of labor’s resurgence that has gotten far too little attention and analysis: many unions are now winning far bigger raises and better contracts than they did just a few years ago, and that’s largely due to workers’ increased willingness to stand up and demand more.
Some labor experts are calling this “the Great Reset.” With millions of American workers upset that their wages have failed to keep up with inflation while corporate profits and CEO pay have climbed to record levels, workers and unions have “reset” their expectations and significantly increased their contract demands compared with a few years ago. Those demands, together with stepped-up worker militancy and the greater number of strikes, have pressured many companies to undertake their own reset during contract negotiations, causing them to recalculate—and then recognize that they need to give bigger raises and more generous contracts to satisfy today’s increasingly frustrated, increasingly mobilized workers.
“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. “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.”
More Strikes, Better Contracts
There’s no denying that there has been an increase in worker militancy. According to the ILR Labor Action Tracker, between January 1 and October 23 of this year, there have been 343 strikes, a 70 percent increase compared with the 201 strikes during the same period in 2021. So far this year 481,500 workers have gone on strike, more than six times the number (58,600) during the comparable period in 2021.
As today’s more mobilized workers’ movement has pressured many companies into resetting upward what they’re willing to give their employees, unions have come away with some highly impressive contracts in recent months. The incredible run of contract wins this year is unlike any in recent memory.
After a six-week strike, the United Auto Workers (UAW) announced tentative settlements with Ford, Stellantis, and General Motors (GM) that include raises of 25 percent and a cost-of-living adjustment, with starting pay rising by 68 percent. After a three-day walkout in October, 85,000 workers at Kaiser Permanente won pay increases of 21 percent, far more than the 12.5 percent Kaiser had been offering many of its workers. Also in October, pilots at Air Wisconsin won huge raises: 54 percent for first officers and 38 percent for captains.
This past July, the Teamsters union announced that its 340,000 members at UPS would receive raises of $7.50 an hour over five years, with drivers’ pay climbing to $49 an hour and part-time workers receiving an impressive 48 percent pay increase on average. Also in July, 16,000 pilots at United Airlines won raises between 34 percent and 40 percent, while in August, 15,000 American Airline pilots won a 46 percent pay increase. Also in August, 1,400 nurses at Providence Portland hospital in Oregon secured raises between 17 percent and 27 percent over two years. After a three-day strike last March, 30,000 Los Angeles School District workers—custodians, cafeteria workers, bus drivers and teachers’ aides—won a 30 percent wage increase over four years, showing that the “reset” has also spread to some contract talks in the public-sector.
“All this reflects a reset in expectations and wage norms for workers and for employers,” said Thomas Kochan, a long-time professor of industrial relations at M.I.T.’s Sloan School of Management.
“Workers are taking action, and they see others being successful so there’s a bit of a contagion factor,” Professor Kochan added, noting that many corporate executives are surprised by all the pressure from below. “I’ve talked with labor relations people at several companies, and they have had to get their CEO’s and CFO’s [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 before, and they haven’t experienced this amount of bargaining power on the side of workers.”
What’s behind the Reset?
This reset has taken many forms. This past summer when the UAW’s new president, Shawn Fain, opened contract talks with Ford, GM and Stellantis, he did so with unarguably ambitious demands, including a demand for 40 percent wage increase. Throughout the negotiations, UAW leaders emphasized that auto workers’ hourly pay has trailed inflation by 19 percent since 2008, while CEO pay has soared by 40 percent and the three Detroit automakers have been making record profits. In the settlements announced in recent days with Ford, Stellantis and GM, the UAW won a 25 percent across-the-board pay increase, far more than the mere 6 percent in raises over four years that the UAW received in its 2019 contracts with Detroit’s automakers. (Those contracts also included a 4 percent lump sum payout, but no built-in raises, in years one and three.)
Numerous factors have encouraged and enabled unions to reset what’s been happening at the bargaining table—indeed to demand significantly higher pay packages. One factor was of course the burst of inflation during the pandemic, with frustrated workers eager to make up for lost purchasing power. Second, workers are feeling more confident about making ambitious pay demands now that the labor market is the tightest it’s been in decades. In addition, unions feel they have the wind at their back because public approval for unions is at its highest in six decades and because Joe Biden is such a strongly pro-union president. Biden even took the unprecedented move of joining striking GM workers on a picket line in Michigan.
Kent Wong, director of the UCLA Labor Center, sees another reason workers have demanded a reset. “During the pandemic, many workers were celebrated as essential workers, while in reality they were treated as disposable. A lot of workers saw this huge disparity. They were risking their lives at work while corporations were raking in billions in profits. They saw that some companies used federal money that was designed for worker retention to line the pockets of shareholders. There’s been a heightened sense of unfairness about how the system is rigged to allow for poverty wages and massive profits at top corporations.”
MIT’s Kochan said another factor behind today’s wave of strikes is that employers and employees have “disparate expectations.” Contract offers are often rejected and strikes often begun when companies and workers see the economic situation very differently. For instance, workers today expect sizable raises to make up for their loss in real earnings after inflation climbed to its highest level since 1979, while many companies think it’s time to rein in wage increases with inflation falling toward 3 percent.
All this discontent has spurred workers in several of the nation’s most prominent labor unions to elect new presidents who ran on platforms promising a more confrontational, more militant stance toward employers. That discontent helped Sean O’Brien win the presidency of the Teamsters and Shawn Fain win the presidency of the UAW. Both made unusually ambitious demands in the major set of contract negotiations they faced—at UPS and at Detroit’s automakers, respectively—and both aggressively mobilized their rank-and-file. In what would have been one of the largest walkouts in U.S. history, the Teamsters appeared on the brink of a strike by 340,000 UPS workers, while Fain led the first-ever strike against all three Detroit automakers at the same time.
The Teamsters won a record deal at UPS, as did the UAW at Ford, Stellantis, and GM. “These contracts were won by strategy,” said Kate Bronfenbrenner, director of Labor Education Research at Cornell University. “They won these contracts because workers are angry. Why are we seeing all this anger now? One reason is the incredible profits employers have been making at a time that workers feel they’re really suffering. The gap is so wide. Workers feel that employers are flaunting it in their face, epitomized by Jeff Bezos shooting himself into space while workers are suffering.”
The wide gap between how television and film workers are feeling and how Hollywood studios are doing helped fuel the strikes by 165,000 TV and movie actors and 15,000 Hollywood writers. At a time when most major Hollywood studios are making strong profits, many actors and writers had grown alarmed that their pay and job security were in sharp decline, especially with the rise of artificial intelligence. Pointing to how the power balance has shifted and been reset, after the studios had at first flatly rejected the writers’ contract proposals and after the writers were on strike for nearly five months, the studios largely agreed to the writers’ main demands: on pay, minimum staffing levels for writers, and limiting the use of artificial intelligence in scripts.
“In the past, unions’ expectations got lower and lower,” said Eric Blanc, a professor of labor studies at Rutgers. “But the norms have changed. If you’re not thinking big gains, there’s probably something wrong with what you’re doing as a union. People see that they can fight back and really get corporate America to cough up concessions to workers.”
Many workers and union leaders complain of a disparity in what’s happening at the bargaining table. While long-established unions such as UAW and the Teamsters have done well in winning impressive contracts from employers, newly formed unions at prominent companies like Starbucks, Amazon, Apple, and Trader Joe’s have so far been unsuccessful in reaching a first contract even though workers at those companies unionized more than a year ago. Union members assert that executives at those anti-union companies are deliberately delaying efforts to ever reach a first contract that would significantly improve wages, benefits, and working conditions because the companies fear that might cause far more of their workers to unionize. The companies assert that they’re bargaining in good faith and intent on reaching a first contract.
Nonetheless, newly unionized workers at some employers have managed to negotiate strong first contracts. In October, more than 3,800 graduate student workers at MIT won a 12.6 percent increase in their stipend, a $10,000 needs-based child-care subsidy, and an 84 percent dental subsidy. The 180 union members at the Whitney Museum in New York won a 30 percent raise on average in their first contract, with entry-level pay increasing to $54,100, from $40,500.
Professor Kochan said that one early sign of the reset came in the fall of 2021 when 10,000 John Deere workers went on strike for five weeks. Those workers, members of the UAW, voted down a deal calling for an 11 percent raise over six years and creating a second tier of workers in which future hires, unlike current workers, would not receive a pension. Deere’s workers rejected that deal at a time the company had forecast annual earnings of nearly $6 billion, 60 percent more than in the previous record year. Five weeks into the strike at fourteen facilities, Deere significantly improved its offer: a 20 percent raise over six years, an $8,500 bonus upon ratification, and retaining the pension for future hires. The workers approved that offer.
Showing how workers’ expectations have continued to rise, 4,000 UAW members at Mack Trucks voted in early October to reject a tentative settlement their union had reached that included a 19 percent raise over five years, with an immediate 10 percent pay increase upon ratification. One reason the Mack Truck workers torpedoed the deal was that they saw that Detroit’s automakers were already offering a raise of more than 20 percent over a shorter period—four-and-a-half years—along with restoring a cost-of-living adjustment. Mack Truck workers have been on strike since October 9 in Pennsylvania, Maryland and Florida.
To be sure, not every union is winning in contract negotiations. When 1,100 coal miners at Warrior Met in Alabama went on strike in April 2021, they demanded that the company reverse deep pay cuts that they had taken in 2015 to help keep the company afloat. But Warrior Met dug in against granting the union’s demands and used hundreds of replacement workers to keep the mine operating, and after nearly two years on strike, the striking miners agreed to return to work, having fallen far short of winning their bargaining demands.
“It’s very hard to win in coal right now, especially in the South,” said Cornell’s Bronfenbrenner. “The coal industry is in decline right now. The auto industry is not in decline. The entertainment industry is not in decline. But in coal, it’s difficult.”
Labor experts advise unions that it’s easier to win strikes against well-known companies, especially consumer-facing ones like UPS or Ford, and especially when they engage top corporate executives at the national level to help settle the disputes. Perhaps CEOs and CFOs realize being anti-worker is not a good look right now. It’s harder for workers to win in smaller, more localized labor disputes where the strikers often receive less visibility, publicity, and public support.
Public visibility has been particularly effective in gaining leverage. In their labor disputes with UPS and Detroit’s automakers, union leaders did an expert job mobilizing the rank-and-file, making their case to the public, and ratcheting up pressure on top management. That strategy helped the Teamsters and UAW win record contracts, having pressured those companies to agree to contracts considerably more generous than they had planned.
“Working people are seeing other working people standing up and winning, and they’re standing up and demanding more,” said Georgetown’s Windham. “Employers are seeing that this is not the equation, not the situation they’ve been looking at the last twenty or thirty years, and they’ve had to recalibrate.”
Source: Century Foundation
Steven Greenhouse is a senior fellow at The Century Foundation, where he writes about wages and working conditions, labor organizing, and other workplace issues.
