advertisement
advertisement

Labor strikes have doubled in the past year. Is high inflation part of the reason?

Inflation is causing workers to see their purchasing power erode, and unionized workers tend to earn more than their nonunionized counterparts.

Labor strikes have doubled in the past year. Is high inflation part of the reason?
[Source Images: Getty]

High inflation and worries about economic contraction are stunting the markets but proving to be catalysts for growth in one area: an interest in striking and unionizing.

advertisement
advertisement

The number of strikes between January and May 2022 is double that of last year, according to data from the Cornell-ILR Labor Action Tracker, a database that tracks labor protest activity across the U.S. During that time frame, there were 153 strikes around the country comprising 73,500 workers, compared to 78 strikes involving 22,500 workers between the same months in 2021, according to Johnnie Kallas, a former labor organizer and the director of the ILR Labor Action Tracker.

The increase in strike activity appears to be moving in lockstep with a sudden push in unionization among American workers, too. Recently, workers have voted to form unions at Amazon warehouses, Starbucks cafés, and Apple stores. Some Google employees unionized last year. And even Microsoft has softened its opposition to employee unionization efforts.

It’s hard to pinpoint a specific reason for the recent groundswell in organized labor activity, but it’s safe to say that poor worker treatment during the pandemic, the long-standing (until very recently) issue of wage stagnation, and high inflation—which is causing workers with already low earnings to see their purchasing power erode further—may have brought workers to a point where striking or attempting to unionize was worth the possible risk of losing their jobs.

advertisement
advertisement

The data makes the potential benefits clear: The average union worker earns significantly more money than a nonunion worker. It may also give workers more say in things like shift scheduling, safety protocols, store policies, and more.

A 2021 analysis of government data by Reuters found that at the end of 2019, the average unionized retail worker earned roughly $730 per week, compared to $670 for their nonunion counterparts. Another report, from the Economic Policy Institute, found that unionized workers earn 11.2% more on average than nonunion workers in the same industry. This, in part, is one of the reasons that the Biden administration has sought to beef up union membership, even stating that “it is our administration’s belief that unions benefit all of us” in a recent report.

Not all strikes necessarily lead to unionization, but the two are linked—and the recent upswing in unionization efforts marks the reverse of existing trends. While 20% of American workers were in a union in 1983, roughly half—10.3%—were union members in 2021, according to data from the Bureau of Labor Statistics, amounting to approximately 4.2 million workers.

advertisement

So, while workers are striking and unionizing in higher numbers than they were a year ago, and potentially earning themselves higher wages, consumers may be wondering what, if any, effect strikes and unionization may have on prices for goods and services, particularly during a time of high inflation.

It’s difficult to say for sure, but price increases may very well follow at unionized shops. BLS data shows that the employer costs for a union worker in private industries add up to more than $50 per hour (including wages, benefits, and more), whereas they are less than $40 for nonunion workers. With that in mind, additional costs to employers are all but assuredly going to trickle down to consumers in the form of price hikes.

Even so, higher prices may not turn consumers off completely, as many are sympathetic to workers’ aspirations to unionize. A poll from February found that 67% of the more than 2,500 respondents supported the unionization efforts of Starbucks employees. Whether that support still holds true after several more months of sky-high inflation rates remains to be seen.

advertisement
advertisement