At the start of the pandemic, American workers were thrown to millions of jobs. When it ends, they could be in their strongest position in decades.
Union leaders and labor economists warn that the great battles have yet to be won – but they see conditions for workers to reclaim some of the soil lost during the US economy’s long slide into inequality. Since the 1980s, wages have lagged as corporate profits and stock markets skyrocketed.
Now there’s a president who sounds more work-friendly than his recent predecessors, a Federal Reserve that seems poised to let wages run hot, and a public more appreciative of low-paid service workers.
Jobs lost to Covid are returning – often with better salaries than before. The August employment report released on Friday is expected to add more than 700,000 new employees to the payroll, and corporate giants from Amazon.com Inc. to McDonald’s Corp. have increased wages.
In the rush to reopen, the bosses had to hire like never before, and that gives the workers some bargaining power. Many have also re-examined work and life after the Covid-19 trauma – and discovered that they have options. There are a record number of job vacancies and enhanced benefits have given workers a financial cushion so they can wait a little longer for the right opportunity.
However, there is something fragile about all of these wins. The additional $ 300 per week unemployment benefit ends right on Labor Day this month. It is not clear how long the momentum for higher wages will last. And the long-term trends are not encouraging. On the eve of the pandemic, the hourly wages of most workers – adjusted for inflation – were still below their 1973 high. The share of the unions in the labor force is less than half of what it was then.
“The power people are talking about is really un-channeled, unfocused – and will be fleeting if we don’t organize,” said Sara Nelson, president of the Association of Flight Attendants-CWA, one of America’s most prominent union leaders.
Labor hopes President Joe Biden’s administration will help make this happen.
Biden, a long-time union ally, signaled in a CNN town hall earlier this year that his government could take a more worker-friendly approach. When a restaurant owner complained that higher unemployment benefits were preventing people from applying for jobs, the president told him the industry should simply pay more.
“The power of workers right now is unique,” said Biden’s Secretary of Labor Marty Walsh, the first union member to hold the post in half a century. “There are so many companies that are really trying to get people back to work.”
But some of the government’s plans have stalled. An attempt to raise the national minimum wage to $ 15 an hour was against congressional rules. The Freedom of Association Protection Act, the workforce’s top legislative priority, would make it easier to form unions, strengthen the right to strike, and convert many independent contractors into workers with full job protection – but it gets stuck in the Senate, it probably won’t get on a filibuster.
Without such action, there is a risk that profits will be wiped out if the business cycle slows down. Labor suffered defeat when Amazon warehouse workers in Alabama voted against union formation despite a legal challenge pending, and the spread of so-called “gig work” has also made organizing difficult.
Anna Stansbury, an economist at MIT who researched the dwindling influence of US workers, says workers’ power works through two channels: tight labor markets and formal structures like legislation and unions. “You need both,” she says.
New thinking at the Fed should help at first glance. Wages had started to rise before the pandemic when the central bank cut rates to avert a slowdown even if unemployment was below 4%. Since then, that less restrictive approach has been anchored in a new framework that will keep interest rates low to support post-pandemic job and wage recovery.
Still, Stansbury said, it will take “a whole range of different measures and a long period of tight labor markets” to restore the clout that workers have lost over four decades or so.
Historically, better employment contracts have not come about simply because presidents, lawmakers, or Fed officials decided they were appropriate. They were fought for. And there were plenty of those even during the pandemic.
While government officials counted only eight “major work stoppages” in all of 2020 – those with 1,000 or more workers and one or more shifts – there has been a wave of minor strikes and work stoppages that have continued into this year.
Researchers at Cornell University’s School of Industrial and Labor Relations, who built a database to track work actions since late last year, identified 50 strikes and 167 “workers protests” in the first quarter of 2021 alone. In addition to better wages and health insurance benefits, occupational safety was one of the most common triggers during the pandemic.
Larry Cohen, a former president of the Communications Workers of America, says organized action and the protection of politicians are always essential to moving the cause of the workers forward. Business cycle fluctuations, such as those driving wages up, can sometimes help workers – but they cannot count on lasting progress.
“The markets never bothered about the working people. Ever. Everywhere, ”says Cohen. “You have to build a floor. It has to be done by workers and the government. Otherwise most people will be ripped off. “