Labor Strength on the Rise
October 16, 2023
Miles Savitz
Labor unions have found newfound strength in this post-pandemic world. Frustration among labor built up during COVID, and the rapid implementation of new technologies has led to union leaders across industries to take more aggressive stances. Inflation and job insecurity induced by new technology have meant that unions are willing to take more drastic actions. Union members have backed this up with strong commitment to strikes, and public support for unions has continued to stay strong. According to Gallup, support among unions has hit a high not seen since the 1960s, whereas the American public’s sentiment toward big business continues to be at all-time lows. Although, it is important to note that the percentage of the US workforce in unions has drastically decreased in the last 50 years.
Screenwriters, UPS workers, and rail workers at the end of last year were all able to earn large concessions from management. These strikes have ripple effects throughout the US and the global economy. One example is the ongoing auto worker’s strike, which has depressed the price of steel due to lack of demand from car manufacturers – it is likely to remain subdued until the strike concludes. With stronger support of strikes from labor, strikes could become more frequent and last for longer causing supply chain log jams.
These log jams could also help fuel short-term inflation as supplies of products are depressed from strikes. The auto workers’ strike may conclude in the next week or so as management has begun to make large concessions to the union. Managements are being forced to agree to deals that will increase their cost of labor, making their businesses less flexible as workers push for job security. A win by the auto workers union will make employees at Tesla, Toyota and other non-unionized car manufacturers take a second look at their decision to remain unorganized.
The continued strength of labor in the US could also lead to a greater emphasis on automation from companies as they try to minimize the difficulties with dealing with unions. This bodes well for AI and automation companies as their services will likely be in high demand.
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