United States of Labor: Industrial policy is the talk of the town
Hi, Radu Stochita here! I wrote a couple of pieces for Cross-Border Talks, but recently decided to move everything into a newsletter format where I take you through the latest news in the labor world across the ocean.
This newsletter will come regularly apart from the standard Cross-Border Newsletter when the most interesting publications of Cross-Border Talks are summed up.
Recently Macron unveiled his plans for an overhaul of the current pension system, pointing out that unless changes occur, the burden will fall on the shoulders of the youth. His plan brought millions of people in the streets, as you can read in Cross-Border Talks’ report written from Lille in Northern France. Through my French friends Instagram stories I understood that the disappointment is grave and people are not willing to back down. In every video there were union flags which people held up in the air sending the clear message “unions are here to stay”.
While labor unions have grown in popularity over the past years, in the United States, the level decreased the lowest on record, 10.1% of the entire workplace from 10.3% in 2021. Overall, union membership increased by 245.000 workers which is due in par to the successful campaigns launched at Amazon, Starbucks, Microsoft.
Aside from the increase in union membership, voluntary recognition of labor unions has increased, which allows organized labor to circumvent the lengthy process of NLRB elections. Microsoft made the headlines early this year when it decided to voluntarily recognize its union of video games testers (CWA), instead of trying to discredit people’s desire to join a union until a NLRB decision forces them to bargain.
After multiple challenges to the election at Amazon JFK8 warehouse, NLRB ordered Amazon to recognize the union (Amazon Labor Union) and to bargain. The company can still deny, but then the union can file with NLRB and force the company to the bargaining table. Starbucks was in a similar situation last year when it was forced to negotiate with the newly-formed union in Seattle.
While big companies made headlines, Biden has hoped to assert his position as the most pro-union president. While the NLRB has been majorly in favor of labor, the Biden administration disappointed the workers when it forcefully intervened in the railway strike, prioritizing payments to Wall Street stakeholders instead of listening to the laborers. The freight workers asked for paid sick leave and got none.
The rail workers’ battle did not stop, but rather they are regrouping their powers, organizing for paid sick leave and safe staffing. Simultaneously 350.000 UPS workers are ready to go on strike this summer if they do not get the contracts they want. By looking into the future, union talk and activity will increase, as the money from CHIPS Act and Inflation Reduction Act starts coming.
To sum it up, USA decided to curb its dependence on China for clean energy technology and microchips, and decided to invest money into the economy. While both US and Europe had 80% of the global microchip production, and Asia 20%, while now the figure is reversed. Taiwan Semiconductor Manufacturing Company (TSMC) already started investing $40 billions in a microchip plant in Arizona.
Biden’s plan to put money into the economy, subsidizing industries or outrightly building them from the bottom up to compete with China, Europe is signaling the alarm that it should slow down. At Davos, this week, where billionaires, investors and heads of state met, the talk of the town was the involvement in the economy and Europe can ensure that its firms will not fly over the ocean.
Lobbyists had gone to Washington to pressure Biden, yet they came empty-handed, telling the leaders on the continent that they must do something soon. Olaf Scholz is already urging the European union to create new joint financing instruments to help member states compete against increased US subsidies for green tech. Macron is also preparing a bill to push towards the re-industrialization of the country that will act just like the American one, pushing money into industries to try to get them to innovate and to compete with China.
If Biden will keep attempting at being the most pro-union President, he will promote the creation of union jobs, as well as the European counterparts should. New unionization drives in the emerging industries will hit the news and employers faced with the possibility of work stoppages, I wonder if they will give in and accept organized labor.
The prospective of blocking a company for weeks means harsher competition with China and a tougher way to catch up. This, or they might go down the Rishi Sunak’ path of trying to limit the possibilities of striking, which I deem unlikely given.
Some other news
The 7000 nurses in New York City that went on strike were brought back to work after the union and their employers reached a tentative agreement. Nurses at the eleven public hospitals in New York City took rode the wave and started rallying in order to jumpstart their contract talks.
Just as California university workers finished their strike, the graduate student workers at Yale University voted to unionize.
Credit Suisse might slash its bonus pool for 2022 by about half. Morgan Stanley also fired 1600 people and 5000 are on the black list to be let go. Not a great year for bankers, they claim, yet the number of them who earned more than one million EUR in 2021 was the highest on record.