Update 709 — Summer of Labor Discontent: What’s at Stake for Workers in the Strikes?

Update 709 — Summer of Labor Discontent:
What’s at Stake for Workers in the Strikes?

The U.S. labor market finds itself catching up at last — for the first time since early in the pandemic, workers’ wage gains are now exceeding the rate of inflation. Unemployment is close to a 50-year low. Bargaining power is now being tested in sectors from trucking (300,000 drivers) to Hollywood (160,000 actors), with major strikes underway or imminent. 

What has given rise to this season of labor discontent? What is at stake, what are workers seeking and what is the likely outcome of the strikes this summer, for them, for firms, and for the economy? We review today’s hot, if not boiling, labor market conditions. 




It’s shaping up to be another summer of high-profile strikes, detailed below. First up, members of the Screen Actors Guild and American Federation of Television and Radio Artists (SAG-AFTRA) have joined the Writers Guild of America (WGA) on strike for the first joint strike since 1960. The unions are in conflict with the Alliance of Motion Picture and Television Producers (AMPTP) over the terms of new contracts. During the strike, SAG-AFTRA members will not be participating in work under the union’s TV and theatrical contracts, which cover most scripted film and television work, but other work, including independent films and unscripted television may continue if granted waivers by the union.

The SAG and WGA Strikes Explained

Why are SAG-AFTRA and the WGA on strike? As streaming services have displaced traditional business models in the industry, it’s become increasingly difficult for writers and performers to make a living. Streamers tend to make fewer episodes than traditional network TV, with 8-10 episodes per season compared to 22-24 for the networks, resulting in far less work for writers and actors. Additionally, residuals from streaming just don’t pay the bills the way that TV did, especially when services cancel their original, popular shows after only two seasons– right before they would have to start paying significant residuals.

As making a living becomes borderline impossible for background and supporting actors – just 12.7 percent of SAG-AFTRA members earn the $26,470 annually required to qualify for the union’s health insurance – the unions are calling for wage increases that keep pace with inflation, revenue sharing and concrete success metrics for determining residuals on streaming services. SAG also seeks policy changes that would compensate performers working multiple jobs on a set, raise caps on health and retirement contributions to account for inflation and allow principal performers to work while on hiatus, among other reasonable demands for workers.

The studios have not only rejected these proposals from SAG-AFTRA, but have been brutal in their tactics with the WGA, refusing to come back to the negotiating table months after negotiations broke off on May 1. Some studio executives have been quoted as saying that AMPTP is intentionally dragging the strike out until writers “start losing their apartments and losing their houses” which they called a “cruel but necessary evil.”

Bob Iger, CEO of Disney, called the striking actors and writers’ demands “unrealistic” and “disturbing,” hypocritical given the studios’ own demands, particularly around the use of AI. AMPTP reportedly proposed paying background actors for one day, then scanning them, and owning their image in perpetuity to use in other projects without the actors’ additional payment or consent. AMPTP has denied these claims, saying that their proposal would only allow studios uncompensated use of an actor’s image for the rest of the project, which would still be a massive financial blow to the performers.

AI has also been a point of contention for writers, who the studios have said they can replace with AI. AI is of course not an actual substitute for human thought and creativity, so the studios have proposed using AI to generate a script and having writers fix the scripts at a much lower pay rate.

Prior to this strike, AMPTP and the studios have been engaging in blatant exploitation of the writers and performers who make them millions of dollars. Yet, they want the public to believe that it is the workers who are being greedy and unreasonable, a story familiar to workers across industries.

Beyond Hollywood

Unionized UPS workers represented by the Teamsters may also be headed for a strike if the union cannot reach a fair contract agreement with UPS. After hard-fought wins on a two-tiered wage system, air-conditioning in workers’ trucks – a serious safety concern for drivers as we face potentially the hottest summer on record – and a paid holiday off for Martin Luther King day, the main conflict remaining is over wage increases for part-time workers. The Teamsters have said that UPS’s offer on that front amounts to “crumbs.”

The International Brotherhood of Teamsters is the largest union in the U.S. and one of the most well-organized. SAG-AFTRA is also a well-established union with over 160,000 members. But, as union favorability surges among American workers, more and more previously non-unionized workers and industries are getting in on the action.

Source: Gallup

Workers at Starbucks and Amazon have broken new ground over the last two years in organizing and forming new unions without support from the large national unions. At the same time, those same companies have broken new ground in union busting – A federal labor judge found that Starbucks violated workers’ rights “hundreds of times.” 

This summer’s strikes have kept labor at the forefront of Americans’ minds.With inflation eating away at real wages, it’s more important than ever that workers stand in solidarity to demand fair compensation and working conditions.

The Federal Government’s Role

While workers fight for fair pay and working conditions, it’s important that members of Congress support the right to organize. The PRO Act, for example, a top legislative priority of the AFL-CIO and other unions, would be an important step in protecting workers’ rights. 

House Republicans’ appropriations bill would cut funding for the National Labor Relations Board by a third. Last year, the NLRB received its first budget increase in a decade, one that was desperately needed but was insufficient to compensate for the losses suffered by the agency in recent years. A budget cut of this size would be devastating to the NLRB, but it’s also important to remember that with inflation, even flat funding is a cut.

Funding at the NLRB has been effectively cut by 25 percent since 2010. Between 2006 and 2019, the NLRB’s staffing levels fell by almost 31 percent, while the number of covered workers per staff member increased by 50 percent. Staffing at field offices, which are responsible for handling union elections and unfair labor practice charges, has fallen by 50 percent since 2002. At the same time, the agency’s workload has grown. NLRB petitions increased by over 50 percent in Fiscal Year 2022 compared to Fiscal Year 2021, and unfair labor practice charges rose 19 percent, putting even more pressure on remaining staff to take on corporations running well-funded union busting campaigns.

The delays caused by this workload disproportionately benefit employers who are able to wait out union organizers, especially in high-turnover industries like food service or retail. Meanwhile, workers who have been illegally fired or punished must sometimes wait years for their cases to be resolved.

Last year’s $25 million funding increase was desperately needed, but still mostly served to keep the lights on. The NLRB needs access to more staff and resources if it is going to protect workers’ rights. If lawmakers instead continue to starve the NLRB of resources, the federal government will be unable to meet the moment and support workers as they fight for fair pay and safe working conditions.

Additionally, of particular relevance to the current WGA and SAG strikes is the federal government’s abdication of its responsibility to prevent large corporations such as Disney, Comcast, Amazon, Apple, and others making vertically integrated mergers and acquisitions that make it almost impossible for their workers to exercise their collective bargaining rights. Apple’s core business, tech hardware and software, is such an outsized part of Apple’s revenue stream – movies and streaming are a small part – that Apple can weather a complete shutdown of its entertainment division with marginal impact on the company’s overall profitability. This creates extreme power imbalances for unions like SAG-AFTRA, the WGA, and others as they attempt to remedy their workplace problems either through contract bargaining or a strike. The FCC and the FTC need to return to their congressionally mandated roles to prevent the concentration that hurts American workers, consumers, and the economy.

A new draft of updated merger guidelines released by the FTC and DOJ this morning is a tentative step in the right direction. The draft outlines 13 principles that bring guidelines on merger approval in line with the modern economy and emphasize the importance of preventing vertical mergers from creating market structures that foreclose competition. The draft comes after President Biden’s 2021 executive order on competition and reflects the administration’s whole-of-government approach to targeting consolidation and the negative consequences for labor and consumers that come with it.