United Parcel Service and the Teamsters union were able to reach a tentative labor deal, averting a strike that could have had widespread economic impact. However, Hollywood actors and writers are still striking after being unable to reach a deal with studios and the UAW is threatening to strike if its unable to reach a deal with automakers. Art Wheaton, Director of Labor Relations at Cornell University ILR School, tells Yahoo Finance Live that there are several factors motivating the strikes. "It's always a combination of different factors," Wheaton says, highlighting the tight labor market, high inflation, and a union-friendly President as issues driving some of the activity.
Video Transcript
- Well, the UPS tentative deal preventing 340,000 people from hitting the picket line, but it's been a busy summer of strikes. According to Bloomberg Law, 322,000 workers have gone on strike this year, including the writers and actors associations in their unions. So we could see more as the UAW contract expires in September.
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Joining us now is Art Wheaton, who is the Director of Labor Relations at Cornell School of Industrial Labor Relations. Great to have you here with us today. Perhaps we can start with the deal that just got made between UPS and the Teamsters here. I would love to get your instant reaction to it and what this signals about the broader state of union negotiations.
ART WHEATON: I think it's fantastic. I'm delighted that we don't have a disruption in service. I think that the Teamsters were able to win quite a bit at the collective bargaining table, but I also think UPS did a fine job as well.
So the strike was averted. They have a few days left to go before the contract actually expires. And the process works.
- Well, we have heard from other unions, not specifically on UPS, but just the strikes that are happening is that there is a lot of unity among labor unions, whether it is in Hollywood, whether it is in Detroit, where we're having a UAW negotiation right now. I mean, can you talk to me about where you think the workers' leverage lies? We've been talking the last year about how workers have the leverage because of a tight labor market. Is that what's driving a lot of these strikes that we've been seeing play out?
ART WHEATON: It's always a combination of different factors. Number one, you do have a tight labor market, so unemployment rates are the lowest they've been in decades. You also had a history of high inflation. So everybody is looking at the bargaining table as a way to make up for all of the costs and the increased cost of living. So that's also a factor.
You had-- it's been a huge COVID and logistical nightmare for our supply chain for the last few years, and this is the first opportunity to negotiate a contract post-COVID emergency. So that's part of it. And you have very, very high positive union approval or the feelings about unions, the highest it's been since about 1965.
So you have very high approval ratings. You have a president in the United States trying to claim he's the most union-friendly president ever. And unfortunately for us, depending on who the president is can have an impact on the National Labor Relations Board and how things are managed. So currently, we have a more union-friendly president, and that means the labor law tends to be a little bit more friendly towards the NLRB. All of those factors come into play.
- All right, I imagine the answer is different for every different union negotiation and as it plays out to the consumer related here. And I'm bringing that up because consumers might be thinking, OK, so who eats that cost? Is it me who's paying for a service, or is it the company that may have seen their profits be able to be buoyed or even ballooned over years, or corporate executives that have seen their own kind of bottom line or compensation balloon over years between the negotiations of different contracts? You know, is it as simple as saying that the corporations need to eat more of this or where the consumers should expect or can expect some of that cost for, you know, labor costs to be factored or sent through to them?
ART WHEATON: I think the consumer is very well aware that there's been inflation and some costs go up, and people think everyone deserves a decent wage. So of course, there are to be some cost sharing. But the part of it that you haven't mentioned is the increased revenue or increased productivity.
So by having the labor deal done, you're not losing all of those customers. So you're gaining that back. And also, if you keep your workforce around longer, they will usually be more productive and know their jobs better, and how they're doing it, you can increase on the productivity side as well.
So it's not all pure cost. You do get gains by having a stable work environment. And you're not trying to desperately find new employees that don't know how to do the job as well.
- Wages and benefits certainly, you know, are sort of top of mind in so many of these negotiations. But there's also, it appears, a common thread when you think about what's happening with, for example, the UAW negotiations, what's happening out in Hollywood with SAG-AFTRA and WGA. And it is about a change that is happening, a technological change.
In the case of the car makers, it is about electric vehicles and what that means for job stability, what that means for future skills. Same thing in Hollywood. When you think about those particular issues, how strong is the hand of labor unions right now?
ART WHEATON: It's strong in the hands of labor unions, at least on the part of the UAW, a little bit less so for Hollywood and for the writers and for the actors. But technology has been an issue for generations. It's not a new phenomenon. The last time the actors went out on strike, it was also technology-driven, and it was whether it was VHS tapes or trying to get those recordings, and you did have the cable programs doing it. So technology continues to be an issue.
For the auto industry, the problem the UAW is facing is that the transition to electric vehicles and the batteries that are the biggest cost for those electric vehicles are being made in joint ventures. So the UAW can't have a strike against the battery manufacturing component of it because it's not owned by General Motors or Ford. They are joint ventures. So by the nature of it being a joint venture makes it a more difficult time to bargain against the battery components. But there is a lot of strength for stopping the building of trucks and SUVs, which are in pretty short supply at the moment.
- Great insight and context there, Art Wheaton. I also haven't had to think about VHS videotapes in quite some time. So thanks for the trip down memory lane. Appreciate it here this afternoon. Thanks.