With Corporate Profits Soaring, AFL-CIO Unions Say “It’s Our Turn”

Unemployment is dropping, and a tight labor market boosts union bargaining. The Federal Reserve Board, whose decisions on interest rates greatly influence hiring trends, has resisted conservative calls to put on the brakes to avoid inflation. 

Indeed, rather than rely primarily on unemployment rates to set policy, the Fed may decide to target wage growth, a policy favored by many union and progressive economists. Under such a strategy, Fed chair Janet Yellen could propose that interest rates not be raised until wage growth reaches 3.5 to 4 percent, according to Economic Policy Institute president Larry Mishel. That figure reflects the roughly 2 percent growth in the productivity of the economy combined with the Fed’s current view that a 2 percent inflation rate is desirable.

But union leaders also are approaching negotiations in a way designed to win maximum support from both other unions and the general public. Bargaining, especially when it breaks into open conflict with strikes or lockouts, typically involves both the economic power of each side (such as the ability to inflict injurious costs on the opponent) and the balance of political power, including public opinion.

Union leaders are, first, making the case that workers have gone without increases — and have often suffered losses — in wages and benefits for many years: real wages have been flat for the bottom 70 percent of workers since the late 1970s. But corporate profits and stock prices have been rising rapidly.

“Our message is that ​‘it’s our turn,’” said Communications Workers president Larry Cohen, whose union will be negotiating major contracts with Verizon, ATT, American Airlines, United Airlines, GE and other companies and public employers. ​“It’s great that profits of private companies have soared. But now it’s our turn.”

Yet many unions, including CWA, are also adopting an approach to negotiations that emphasizes ​“bargaining for the common good.” 

For example, American Federation of Teachers president Randi Weingarten emphasizes how the union fights for improvement of teaching, health care and other services that union members provide. The union is bargaining, she says, ​“to reclaim the promise of public education and to reclaim the promise of America.” Bargaining for a contract is an opportunity to solve problems as well as to make economic gains, she says.

American Postal Workers Union president Mark Dimondstein is pushing for improving postal service quality and expanding its mission to help average Americans, especially low-income people with few available banking services, by creating a postal bank or financial service center.

Even straightforward economic gains of workers are most often in the public interest as well, unions insist, since they contribute to increased consumer demand, which is a leading driver of economic activity. 

Also, as American Federation of State, County and Municipal Employees (AFSCME) president Lee Saunders says, ​“When unions represented 35 percent of public and private sector workers, inequality was at a lower level. Unions built the middle class in this country, and there’s a direct relation between decline of unions and devastation of the middle class.” Recent research estimates that the decline of unions accounts for one-fifth to one-third of the increase in inequality from 1973 to 2007.

While these arguments are designed in part to win public support and legitimate wage demands, a third strategy is aimed at increasing mutual support and solidarity among unions as they press their proposals for higher wages.

“We will fight together,” Cohen says. ​“We’re not here just for ourselves but for the common good.” Many unions, including CWA, and non-union allies, for example, joined in an alliance to support the APWU postal proposal at the beginning of contract talks earlier this month.

Many of these strategies have come together in the United Steelworkers’ (USW) strike of 6,550 workers at 15 major oil refineries around the country, representing about one-fourth of the facilities under the national contract (which covers 70 percent of refinery workers in the U.S.). As a gesture of support, other unions have ​“adopted” each of the escalating number of plants on strike, union officials say, most of which are highly automated and continue to run with staff drawn from managers, engineers and outside maintenance personnel.

Overwork and fatigue of refinery workers and the health and safety of both workers and the surrounding community are the main issues, as they have been for many years (although this is the first national refinery strike in roughly 40 years, according to USW president Leo Gerard). In some cases, the union says, workers have put in more than 12 hours a day for a month or more, despite previous agreements on reducing fatigue and limiting hours. Paying overtime is cheaper.

Likewise, hiring outside maintenance crews for periodic repairs or even massive overhauls is cheaper than keeping an adequate, full-time maintenance staff, even though the union says such a maintenance crew would know the plant better and be more likely to maintain it safely.

Despite the small numbers of workers in many refineries, accidents can kill up to a couple dozen workers and spread toxic chemicals over wide swaths of nearby communities, endangering up to tens of thousands of neighbors.

Consequently, Gerard says, ​“Our fight is not just a fight for our members but a fight for the communities.”

But the lead negotiator for the industry, Shell, is ​“one of the worst offenders,” according to Gerard. If workers had more control over the running of the plants, ​“we’ll keep them as safe as possible,” he says.

Even though safety and fatigue are the paramount issues, ​“the economics are still an issue.” With crude oil prices low, refineries are even more profitable. But the companies reject union proposals across the board with ​“a breathtaking level of arrogance,” Gerard says. 

With nearly a month’s supply inventory after more than three weeks of workers striking, the companies may not yet experience much financial pressure, but community and political pressure could boost the union’s clout. Meanwhile, despite managers enticing a few workers to cross picket lines, possibly including some probationary workers who feared loss of their jobs, according to Gerard, union members have maintained their resolve. Outside support from the community and other unions reinforces their sense that their strike is a moral mission — even if it is also an act of enlightened self-interest.