Over 11 Million Working Days Lost in 2023 Due To Strikes - Worth $9.2 Billion in GDP

While strikes are synonymous with European countries such as France and Finland, with the latter losing 433.8 days to strikes between 2020-2022, industrial action in the United States is often perceived to be something of a rarity. Or at least that was the case before the Screen Actors Guild and Writers Guild America suspended filming on some of our favourite shows, such as Saturday Night Live and Euphoria, thrusting their cause into the spotlight. The WGA strikes ended in September, but the SAG strikes are, at the time of writing, still ongoing after negotiations between SAG and the Alliance of Motion Picture and Television Producers collapsed in October.

96 days have been lost to the SAG strike action so far, although this number is just the tip of the iceberg with 4.1 million days lost to stoppages in the United States in August alone.

We at Moneyzine investigate the impact that strike days and stoppages are having on the US economy:

Working Days and GDP Lost to Strikes in 2023

According to the latest data from the OECD, the current GDP per hour worked in the United States is $104. If we multiply that figure by 8 (i.e. the average working day) and examine the number of working days lost each month in 2023 due to industrial action, we can begin to gauge the true impact on the country’s GDP:

Source: OECD I bls.gov

August Brought Los Angeles to a Standstill

August was by far the biggest month for strikes, with the Wall Street Journal reporting that 4.1 million days had been lost to strikes that month alone, at a cost to the US economy of a staggering $3.4 billion. One of the largest strikes that month was the Los Angeles City Workers stoppage, which took place on August 8th, where sanitation workers, airport staff, lifeguards and traffic workers walked off the job, demanding higher wages and alleging unfair labor practices. Many of the 11,000 workers said that they could simply no longer afford to live near their places of employment, and with the Writers Guild and Screen Actors Guild also based around the Los Angeles region, America’s second largest city found itself grinding to a standstill. The same month also saw 20,000 workers from the Los Angeles and Orange County Hotel group walk off the job over healthcare proposals.

Strikes Backed by Unions

The Los Angeles and Orange County Hotel group strikes were backed by the Unite Union, just as the Los Angeles City Workers were backed by the Service Employees International Union.

Unions often have a positive impact on workers’ lives, promoting economic equality and empowering employees to negotiate important aspects of their conditions on a collective basis. On average, union members can expect to earn 10.2% more than non-union workers, and that figure is substantially higher for women and BAME individuals.

Unions are usually able to provide their members with more and better benefits than non-union members, with 85% of unionized workers having the benefit of retirement plans, compared to 51% of non-unionized members. It is perhaps for this reason that searches for jobs at Starbucks and Amazon increased once their unions were formed. A Starbucks in Buffalo became the first to unionize in December 2021, and since then another 360 stores have followed suit. On April 1st 2022, Apple also joined the club, with its 8,300 employee warehouse in Staten Island becoming the first unionized facility in the country.

Labor unions are now more popular in the United States than they ever have been, and public attitudes are changing. 71% of Americans say that they are in favour of labor unions, up markedly on 64% in 2021. The number is the highest that Gallup recorded since 1965.

Union membership in the United States is most popular amongst front-line and production workers, with one in five belonging to a union. Workers in managerial roles, however, are least likely to belong to a union, with membership sitting at just 6%.

40% of union members believe that belonging to a union is extremely important, with 65% of those citing better pay and benefits as their top reason for joining a union. The second most common reason given was employee representation, at 57%, while 42% cited job security as a top-three reason for joining. It is clear that financial self-interest leads here, with only 5% of members pointing to the positive effect that strikes might have on the country as a whole, and only 9% giving health and safety as the motivation for joining a union.

The Largest Strike in the USA Affected Half a Million Workers

The largest strike in US history was The Steel Strike of 1959, which lasted 119 days from July to November. The strike involved half a million workers and was due to a dispute over both wages and changes to workplace rules. In the long term, the strike devastated the American steel industry, shutting down 85% of all production and leading to American industries importing steel from Japan and Korea, which was found to be less costly than the domestic product, even once import costs were factored in.

The United Mine Workers of America Strike in 1946, the Textile Workers’ Strike of 1934 and the Railroad Shop Workers Strike of 1922 each affected some 400,000 employees. Almost a century on, history almost repeated itself with the Railway Union’s Dispute of 2022. While a tentative deal was reached in September 2022 granting workers a 24% pay increase over five years and $5,000 in bonuses, the offer failed to provide workers with paid sick leave, and was rejected by four of the 12 unions. A railway strike of this magnitude would have frozen nearly 30% of cargo and freight, and would have cost the US economy a staggering $2 billion per day. Given the severity of the threat, President Joe Biden invoked his powers to intervene – allowing Congress to impose the September 2022 agreement on union employees, as there is no federal legal requirement for paid sick leave in the US.

Despite his intervention, President Joe Biden is no stranger to a picket line; in September 2023 he brought attention to the UAW strike against General Motors, Ford and Stellantis, urging workers to push for better contracts.

Even without the support of a sitting President, strikes are having their moment and much of this can be attributed to the cost of living crisis, with workers fighting for wage increases against the backdrop of high inflation. The situation is similar to that seen in the 1930s, when America tried to rebuild itself after the Great Depression, when the disparity between the wealthy and working class became intolerable.

While labor unions appear to be flourishing, Jonathan Merry, CEO of Moneyzine, believes that it is important to exercise caution:

It’s certainly true that unions currently have their highest approval rating in almost 60 years, but this paints a rather misleading picture because the reality is that trade union membership is at an all-time-low, with just 10.1% of Americans belonging to a union. If this trend continues, unions may play less of a role in the future labor market, and this has both its good and its bad. Many would welcome the end to strike action, but equally is important to ensure that workers are treated fairly, and collective bargaining is an important tool in this dynamic.

Jonathan Merry, CEO of Moneyzine