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  • Writer's pictureThe San Juan Daily Star

Amid strikes, one question: Are employers miscalculating?

Sean O’Brien, right, President of the International Brotherhood of Teamsters, with attendees at a UPS Teamsters rally in Los Angeles, on July 19, 2023. O’Brien and the union publicly attacked UPS over what the union referred to as “part-time poverty” jobs.

By Noam Scheiber

The list of gains that the Hollywood writers secured to end a nearly five-month strike with studios once seemed ludicrously ambitious: not just wage increases, but also minimum staffing levels for shows, new royalties on successful series and restrictions on outsourcing writing duties to artificial intelligence.

Yet far from an anomaly, the writers’ deal was the latest high-profile labor standoff that seemed to produce substantial gains for workers, and to suggest that they have more leverage than in the past.

United Parcel Service employees won large pay increases for part-timers by pushing the company to the brink of a strike, while the lowest-paid academic student employees at the University of California won salary increases of more than 50% after a monthlong strike affected thousands of students.

Given the unions’ apparent bargaining power and the economic costs to a prolonged work stoppage, the question arises: Why wouldn’t management make its eventual concessions more quickly?

The answer, many union and management experts say, is that employers are increasingly miscalculating — acting from a template that applied in previous decades, when employees had little leverage, and underestimating the frustration and resolve in the post-pandemic workforce.

“Psychologically, it’s a big shift: They’ve been in control. They have been able to tell their representatives to go and get concessions on X and Y, to make sure the wage increase is modest,” said Thomas Kochan, an emeritus management professor at the Massachusetts Institute of Technology, referring to corporate executives.

“Now, they have to change their expectations internally,” Kochan added. “They have a lot of work to do.”

In example after example, executives appear to have been taken aback by unions’ new, more assertive leaders and their success at rallying members and the public, as well as the ineffectiveness of the employers’ traditional bargaining approach.

In Hollywood, the Alliance of Motion Picture and Television Producers, which represents entertainment companies in negotiations with writers, directors and actors, has frequently tried to forge a deal with one of the three guilds, then push the other two to accept similar terms.

That appeared to be the group’s strategy this year as well: After the writers went on strike in May, the alliance reached a deal with directors the next month. But any hope that the writers would be isolated collapsed when SAG-AFTRA, the union representing more than 150,000 actors, went on strike in July.

“The playbook was clearly outdated,” said Peter Newman, a longtime independent producer who heads a dual-degree master’s program in business and fine arts at New York University’s Tisch School of the Arts.

Still, Newman said, the strikes saved the studios hundreds of millions of dollars on shows in the short term as Wall Street was pressuring them to cut costs.

The producers’ alliance declined to comment for this article.

In Detroit, the three major U.S. automakers had grown accustomed to closed-door negotiations with the United Automobile Workers union, in which the parties did not disclose the potential terms until they reached an overall agreement.

But in the run-up to this year’s mid-September strike deadline, the union’s new president, Shawn Fain, appeared to wrong-foot executives at Ford Motor Co., General Motors and Stellantis — which makes the Chrysler and Jeep brands — by disclosing and deriding the companies’ offers. In one case, he literally threw a Stellantis proposal in the garbage.

The companies’ responses — a Stellantis executive sent employees a letter saying “theatrics and personal insults will not help,” while Ford and GM have also expressed impatience — may have further galvanized members and built public support. Polls have found that the public supports the autoworkers over the companies by large margins, and that the margins increased after the UAW began a limited strike.

“It doesn’t seem like they were prepared for the direction he was headed with his public comments,” David Pryzbylski, a labor lawyer who represents employers at Barnes & Thornburg, said of the reaction to Fain. “The way they have responded may have escalated it further versus letting it die out.”

Stellantis declined to comment. Auto industry executives argue that they have made historically generous offers, and that they haven’t been put off by Fain’s outspokenness so much as what they say are the showmanship and the unrealistic expectations he has created.

But in many cases, what has changed is not so much the bluster from union leaders as their willingness to follow through — a potentially disruptive shift after years of often empty threats.

When Teamsters President Sean O’Brien ran to succeed his longtime predecessor, James P. Hoffa, in 2021, he promised to raise wages for part-time workers at UPS, many of whom had long felt shortchanged.

And yet, according to two people close to the negotiations, the company seemed caught off guard when talks broke down over the issue on July 5 — O’Brien’s initial deadline.

O’Brien and the union spent the next few weeks publicly attacking UPS over what the union referred to as “part-time poverty” jobs before the company agreed to hourly wage increases for part-timers of more than $7.50 over the life of the new five-year contract.

Shortly after a tentative deal was reached in late July, the UPS chief executive, Carol Tomé, said the company had expected the negotiations “to be late and loud, and they were.” The company declined to comment for this article.

Part of the challenge for employers is public opinion: Confidence in big business is at its lowest point in decades, according to Gallup, while approval of labor unions is close to its highest. Fain and O’Brien appear to have devised their public campaigns to press this advantage.

Unions also appear to have benefited from new methods of keeping members focused on shared goals — as when writers erupted on social media over the news that the talk show hosted by Drew Barrymore would return before the strike ended. (Barrymore soon reversed course.)

And rank-and-file members appear to have become more committed to their leaders’ negotiating strategy as unions have become more democratic and involved members more in the push for a contract, said Jane McAlevey, a longtime labor organizer and scholar.

But perhaps most important, employers seem to be underestimating the determination of workers, who believe they have little to lose from striking amid rising prices and fundamental shifts in their industry that have sometimes made their jobs more precarious.

A few weeks after the writers walked off the job this spring, Mae Smith, a strike captain and former writer on the Showtime series “Billions,” predicted in an interview that the economic pain of a protracted strike against the studios would not discourage the writers because “unfortunately they’ve been training us to live off very few months of work for a long time.”

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