After decades of declining power, US workers are showing renewed resolve. Employees at unionized companies authorized strikes last year at a rate rarely seen in recent times, and nonunion workers are voting with their feet, fueling a labor market reckoning that’s become known as the Great Resignation. The question is whether this amounts to a significant shift in the employee-employer power balance or just a blip.
1. How are workers showing resolve?
There were strikes in 2021 at unionized workplaces including those of Deere & Co. and Kellogg Co., non-union walkouts at companies such as Activision Blizzard Inc. and McDonald’s Corp., and high-profile unionization campaigns at top US companies, including a landmark victory at a Starbucks Corp. store in Buffalo, New York. This year, tech workers at the New York Times, staff at more than 100 additional Starbucks cafes and thousands of employees at an Amazon.com Inc. warehouse in the New York City borough of Staten Island voted to unionize. (Workers at another Amazon warehouse nearby voted down the idea.) As part of the Great Resignation -- or the Great Reassessment, depending on whom you ask -- a record 4.54 million workers left their jobs in November, according to the Bureau of Labor Statistics, which tracked historically elevated “quits” levels throughout 2021.
2. What explains the Great Resignation?
Anthony Klotz, an associate professor of management at Texas A&M University who is credited with coining the term, says the pandemic inspired epiphanies about family time, remote work, commuting, passion projects, and life and death. Resignation rates were highest in health care, technology and other fields that “experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout,” according to Ian Cook, a vice president at Visier Inc., a Vancouver-based human resource analytics software company.
3. How had labor’s power declined?
Since the 1980s, and most acutely since the last recession ended in 2009, wage growth lagged while corporate profits soared. That means workers’ share of the fruits of economic output fell. The 250,000 or so American workers who earn the federal minimum wage have been stuck at $7.25 an hour since 2009. And the US remains an outlier among advanced economies for not requiring employers to provide paid parental leave, vacation time or sick leave.
4. What caused that decline?
The increased automation of some jobs, and the outsourcing of others to places in the world where pay is low, are two factors. Another is a drop in union membership. When the American Federation of Labor merged with the Congress of Industrial Organizations to form the AFL-CIO in 1955, more than one in three American workers had union jobs. As the US economy shifted from manufacturing to services, and labor law tilted toward employers, unions lost ground. More than half of US states have so-called right-to-work laws, which say employees can’t be forced to fund a union. In 2021, 10.3% of workers in the US belonged to a union, down from 20.1% in 1983, when comparable data collection began.
5. Why do unions matter so much?
By negotiating collectively, unions can generally secure higher pay, greater benefits and safer work conditions than individuals haggling on their own behalf. Union workers earn about $200 more per week on average than non-union workers -- $1,169 versus $975 in 2021, according to the Bureau of Labor Statistics -- and have better retirement pay and health insurance. Studies have shown that unions also help raise pay for non-union workers by setting a higher prevailing wage. Critics of unionization say that it’s a relic from the days of assembly-line factories, and that the salaries of union members come at the expense of fewer overall jobs.
6. What’s the outlook?
Despite the wave of activism in 2021, the share of private-sector workers who belong to a union fell by 0.2 percentage point, to 6.1%. In the US Congress, what would be the biggest piece of pro-worker legislation in decades is stalled, as advocates in the Democratic Party struggle to assemble the 60-vote supermajority required to advance bills in the Senate. The legislation would, for the first time, empower the National Labor Relations Board to impose monetary penalties against labor law violators. President Joe Biden, who has called himself the most pro-union president in US history, publicly supported Amazon workers seeking to unionize, appointed union advocates to key positions and sought ways to use executive power to advance organizing.
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