Weekend News & Commentary — February 23-24, 2019


Published February 24th, 2019 - 02.24.1910


Employee pay and benefits comprise a declining percentage (52.7%) of the gross domestic income, even as unemployment rates remain low and demand for workers high.  According to the Bureau of Economic Analysis, the percentage figure for labor income fell again in 2018’s third quarter, for the fourth straight quarter.  To translate the effects of this decline, the Wall Street Journal explains that “[i]f workers were commanding as much of domestic income as they did in 2011, they’d have nearly $800 billion more in their pockets, or $5,100 per employed American.”  The downward trend is relatively new, following nearly half a century of stable figures (around 56.4%).  Economists ascribe to this decline that union power has eroded while employer power has consolidated.   The rise of massively scaled, “winner-take-all firms” (e.g., Amazon, Google, Walmart) with lower labor shares and high profits tilts the numbers.  Moreover, contracts increasingly restrict employee’s negotiation power through non-compete and no-poaching clauses.  Globalization – providing employers with access to cheaper labor markets – also plays a role.  Down the road, the ascent of AI and robotics may further carve away workers’ share of the pie.

As the red carpet is rolled out for the 91st Academy Awards, David P. White, national executive director of Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) pushes back against narratives that a) link the success of local economies to gig companies; and, b) link the success of gig companies to unprotected, disempowered contract-only labor.  SAG-AFTRA provides the template to rewrite the script.  In the Los Angeles Times, White recognizes the “small concessions” that workers have won recently from gig companies.  But, post-Dynamex, gig companies who lobby to shield their labor force from employee classification continue to promote a flawed logic: firms cannot embrace flexibility and lower cost-operating models if they must also accord to workers robust rights and protections.  On the contrary, SAG-AFTRA, representing those who “may well have been” “the first gig workers” (entertainers), has demonstrated that “companies can prosper” and an industry can thrive even when workers enjoy “guaranteed wage rates, health benefits, pensions, protections against harassment, and, perhaps most important, the ability to bargain collectively.”

In Northwestern Pennsylvania, United Electrical, Radio, and Machine Workers of America Locals 506 and 618 voted to authorize a strike against their new employer.  Westinghouse Airbrakes Technologies Corp. (“Wabtec”) has acquired General Electric Transportation, and will take ownership formally on Monday.  This transfer dissolves the workers’ four-year contract; union leaders have called the proposed replacement a “non-starter.”  Of particular concern is a tiered wage scheme, which would protect current workers’ hourly rates but lower significantly the rates for any newly hired workers.  Local 618 president Karleen Torrance says it’s “not right” and “it doesn’t work” to “be working beside someone who’s doing the same job but making half the pay.”  Senator Bernie Sanders (I-VT), presidential candidate, has publicly supported the union, urging that “the Wabtec/GE merger should not be used to take away the hard-fought gains UE has achieved over the past several decades.”  Wall Street analysts project that Wabtec’s operating income per share will jump 17% on Monday, and that the stock value may double in the next four years.  Go Erie describes in detail the economic and social impact GE has had on Erie (and, Erie on GE), since 1907.

Today in Randolph, Massachusetts, Stop & Shop workers will vote whether to authorize a strike.  United Food & Commercial Workers Local 1445 represents about 10,000 of the grocery market chain’s workers, and is fighting to hold onto time-and-a-half pay for Sundays and holidays, plus to secure better health care and retirements packages.  Massachusetts and Rhode Island have been the only two states with “Blue Laws,” which require the time-and-a-half wage premium on Sundays and holidays.  But Massachusetts is in the process of relaxing and then phasing out the requirements – a result of last summer’s “grand-bargain” bill setting higher minimum wage marks.  As the Boston Business Journal reports, Local 1445’s contract with Stop & Shop expired Saturday at midnight.  Stop & Shop’s net income for the first three quarters of 2018 was $1.45 billion.

Oakland teachers remain on strike, but the San Francisco Chronicle reports that negotiations are set to resume on Sunday.  The Oakland United School District is “very optimistic,” and has signaled that negotiations were proceeding well when they paused Friday evening.  In contrast, Keith Brown, president of the Oakland Education Association, found “little movement” in the bargaining.  Brown is enlivened, however, by the community’s support for the teachers.

CNN’s Zachary B. Wolf observes that “teacher strikes are touching every part of America.”  A number of forces are at work in shaping education’s labor dynamics, and local circumstances may vary.  But common concerns expose persistent underfunding of schools, wages that have lagged upticks in costs of living, the charter movement’s embrace of privatization at the sacrifice of accountability, and fragile attachments to the very value of public institutions.   Wolf also stresses, however, that this is “a story about unions,” for education remains one of the two industries with “extremely strong union representation” (protective service the other).

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