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A Different Kind of Hunger Strike
There are a number of actions workers can take when they don’t feel like their work is paid accordingly. Work slowdowns are a popular method of getting the company’s attention, but going on strike can let the entire world know what’s happening. While big strikes make the news, they aren’t as common as we might presume. There were only 8 major work stoppages that started in 2020, which is the least number of strikes since the BLS started tracking the statistics in 1947. The BLS defines a major work stoppage as one that involves 1,000 or more workers and lasts at least one shift during the workweek. I downloaded the data from the BLS and visualized it below:
This year alone we’ve seen major strikes at Nabisco plants in five states, a Frito-Lay plant in Topeka, Kansas, one of the world’s largest bourbon producers, and now at Kellogg factories in Michigan, Pennsylvania, and Tennessee. The pandemic has hit the entire workforce pretty hard, but most workers aren’t covered under collective bargaining agreements. A lot of the disagreements revolved around long shifts and mandatory overtime that are the result of the pandemic-induced labor shortages. In a stronger labor market, it would be more difficult for workers to just walk out, but the pandemic has given workers and labor unions more power at the bargaining table.
With ongoing labor shortages across the country, it’s difficult for firms to simply hire replacement workers when their own workers go on strike. The sudden spike in demand for cereal left Americans hunting for their favorite brands while workers at the Kellogs and General Mills were left working 75 hour weeks to keep up. That level of work isn’t sustainable, despite the high paychecks many of them were earning. Kelloggs employees are members of the Bakery, Confectionery, Tobacco Workers and Grain Millers' International Union, and last week they decided they have had enough.
The study of labor markets focuses on the input side of markets instead of the output side. About 85% of a principles course focuses on the output side of markets, either on how people go about purchasing products, the ways governments intervene (or don’t) in those transactions, or how markets themselves are arranged on the seller side of the market. Most instructors only teach 1 or 2 chapters on the input side of the market, which is where the study of labor markets would mostly occur. It’s not too surprising then that the “basic economics” of labor markets gets missed.
The easiest way to connect a labor union to economics is to think of a labor union as a single seller of the labor input. This means labor unions would take on the role of a monopoly seller, which is a topic that’s covered in a lot of principles courses. Monopolies are known for reducing output (work) in order to charge higher prices (wages) and increase their own profit (income). The Antitrust Division of the Department of Justice is responsible for limiting anti-competitive behavior, but monopoly power/behavior exists in a lot of different ways. It can show up in smaller markets where there aren’t a lot of competitors (think small-town grocery stores) or the creation of a superior product that others haven’t developed yet (like the iPhone in the mid-2000s). Monopolies may also exist more naturally when the cost of providing a product to a large area can be distributed over a wider set of customers as a single firm than when they have to compete for customers (think electricity companies). Natural monopolies are often heavily regulated to ensure the cost savings are passed on to customers.
Most labor unions don’t really fit into any of those categories. Most union workers aren’t offering a particular skill set that is unique to themselves and their members aren’t often located in small areas with few workers. Labor unions more closely represent the pretty basic definition of a monopoly that is focused on increasing incomes for their members, even if it’s at the expense of higher prices for customers or lower profits for shareholders.
But is that necessarily a bad thing? The majority of Americans don’t seem to think so and actually believe that the decline in union membership is bad for America. It probably doesn’t help that employers are notorious for disrupting the (legally protected) efforts of workers to organize. The question remains whether or not collective bargaining will actually lead to more equitable wage growth.
To get a picture of the frequency of smaller strikes around the world, check out the Strike Hub organized by the Associated Press.
Over the past 20 years, there has been an average of 16 work stoppages per year [Bureau of Labor Statistics]
Based on data from 2020, roughly 10.8% of workers are members of a labor union [Burearu of Labor Statistics]
With many schools closed around the country during 2020, U.S. cereal sales were up 7% compared to 2019 [Associated Press]
The largest labor union in the United States is the Education Association of the United States with an estimated 2,731,419 members [World Atlas]
We’re completed 40 weeks of the year, but I’m still at 58 books for the year. I’m about to wrap up a book I started last week that looks at how slavery is (and isn’t) discussed in major historical sites like Monticello or in Galveston, Texas. So far the book has been incredibly eye-opening. I imagine the last chapter will be just as good. Based on what I’ve read so far, I’d highly recommend checking out How the Word Is Passed.