With ongoing strikes picking up in industries and locations all over the U.S. lately, it can be hard to keep up with the hundreds of thousands of workers petitioning for more pay and better working conditions. Indeed, everyone from Hollywood writers and actors to autoworkers is protesting the often blatantly stagnant wage conditions present in these industries for decades.
So, what’s behind the recent surge in strikes across the country?
Well, in the midst of still-elevated inflation, interest rates, and perpetually rising property costs, it should come as little surprise that some workers are demanding better compensation.
Since early 2021, inflation has far outpaced the growth of wages nearly every month, save for a few fleeting exceptions. Looking even further into the past, the 2023 federal minimum wage is around 40% lower than it was in the 1970s after accounting for inflation. This has served to perpetuate income inequality in the country.
According to Stanford economist John Pencavel, the recent slew of strikes in the country is the result of suppressed wages in worker-dominated labor markets and notably low unemployment. These conditions grant workers a unique leverage over their employers that enables effective strikes:
“Strikes tend to be more frequent and longer when workers have opportunities for (possibly temporary) work. When the unemployment rate is low, firms are seeking employees; that’s a good time for some workers to put pressure on their employers to raise pay.”
With rent and housing costs on the rise, strikes are an almost organic way to balance the playing field.
4 Ongoing Strikes in the U.S. Right Now
- Just this morning, the United Auto Workers (UAW) announced it was considering the launch of a major strike against U.S. car makers. Detroit automakers have until midnight Thursday to negotiate new contracts, including a general 46% pay increase, for its nearly 150,000 union members before the workers officially declare a strike on major car makers General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (NYSE:STLA), collectively referred to as the Detroit automakers or D-3. Should the D-3 hesitate, each week of the strike could mean a 4% to 5% loss in adjusted earnings at Ford, 3% to 4% at GM, and 1.5% to 2% at Stellantis.
- Perhaps the most well-known labor protest is the Hollywood strike. Indeed, striking Hollywood screenwriters and actors have put dozens of entertainment projects on hold. The Writers Guild of America and Actors Guild, SAG-AFTRA are protesting the Alliance of Motion Picture and Television Producers (AMPTP) for protections against artificial intelligence ( ), larger royalties for their work, higher base salaries and better working conditions. It’s currently unclear just how long the strikes will last. Just last week, WGA claimed there has only been one proposal offered to the organization, despite WGA’s counterproposals. The strikes have hit certain businesses very hard, including Warner Bros. Discovery (NASDAQ:WBD), whose profit outlook for the year has been cut by as much as $500 million as a result of the strikes.
- Meanwhile, the country’s largest locomotive maker and its striking union workers have recently come to a potential agreement that would end its two-month strike. Pittsburgh-based Wabtec (NYSE:WAB), announced a tentative deal with Local 506 of the United Electrical, Radio and Machine Workers of America ( ) in late August that resulted in increased wages, an improved grievance process, and several other undisclosed benefits.
- Parcel delivery services, including UPS (NYSE:UPS) and FedEx (NYSE:FDX), have also undergone worker strikes this summer. UPS workers recently passed a new five-year agreement that would raise pay, end an unfair wage system for drivers, provide an additional holiday, and end forced overtime. Unfortunately, FedEx pilots rejected a potential deal back in July amid concerns about low wages and legacy pensions. It’s expected negotiations will soon restart.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.