Restoring Labor-Management Balance
Earlier this month President Joe Biden received credit for averting a railway strike that some economists said would have cost the US economy $2 billion. Interestingly, the issue at dispute between the seven companies that dominate the American railway industry and their estimated 150,000 employees was not wages. It was working conditions regarding staffing and time off for such essential matters as doctor’s appointments.
The threaten strike also revealed disturbing trends in US labor-management relations that are undermining broad public confidence in the country’s economic and political systems. Americans still support capitalism with its emphasis on private ownership of the means of production, but evidence of an unfettered willingness by management elites to exploit both blue collar and white collar workers is energizing blowback.
The threaten railway strike illustrates the situation.
With the decline in the use of coal, the railroad industry has sought to haul more grain, shipping containers and other goods, but the industry also has faced greater competition from long distance trucking. This has led to significant consolidation, leaving the US by 2000 with only seven major carriers, employing 88 percent of railway workers. These carriers have divided the US geographically: BNSF and Union Pacific in the West, Norfolk Southern and CSX in the East, Canadian Pacific, Canadian National and Kansas City Southern in the mid-region of the country.
With consolidation has come two major developments that have negatively impacted railway workers. On the one hand, companies have drastically reduced the number of employees. According to the Surface Transportation Board, the independent federal agency charged with the economic regulation of various modes of surface transportation, the number of railway employees has been slashed by nearly one-third. At the same time, the industry has implemented a rigid scheduling system that seriously burdens the remaining workers but that allows railways to do more with fewer employees.
As result, last year the seven major carriers had combined net income of $27 billion, up from $15 billion a decade earlier. Six of those railways that were publicly traded have paid out $146 billion in stock buybacks and dividends since 2012.
CEO compensation has also skyrocketed. Keith Creel, CEO of Canadian Pacific Railway received a 58 percent raise in 2021, pocketing $26 million in compensation. Union Pacific CEO Lance Fritz was paid $14.5 million, 162 times the median employee salary at that company. James Foote, CEO of CSX took home $16.6 million and CEO James Squires was paid $14 million or 140 times the median worker at Norfolk Southern.
For workers who survived the draconian workforce cuts, pay and benefits rose only 26 percent during the same time frame, slightly offsetting inflation. Restrictive policies associated with the rigid scheduling system, however, have severely limited the ability of the remaining employees to pursue normal lives.
During the recent contract negotiation, wage issues were settled relatively easily, an increase of 24 percent over five years, which industry groups indicated would provide an average payout of $11,000 per workers. But the unions were prepared to strike if the burdens of the scheduling system were not relieved so that planning for routine needs, like physician visits or vacations could be possible.
The American railway industry is not unique in the failure of its management to recognize that money is not the only essential concern of workers. Several major corporations are being challenged for their failure to address employee needs in a broader manner. Among them are Starbucks, Amazon, McDonalds and Target.
Starbucks is a notable case since its former CEO and largest individual shareholder Howard Schultz styles the coffee giant as “a different kind of company,” Although he has a reputation for providing some progressive benefits for Starbuck baristas, Schultz also is noted for vigorous opposition to unionization. In a recent interview with New York Times’ columnist Andrew Ross Sorkin, Schultz made his mindset clear:
“If a company is as progressive as Starbucks, that’s done so much…, can be threatened by a third party, than anyone can.”
For the average Starbucks employee the world may look a bit different. During his recent tenure as Starbucks’ CEO, Schultz worked for a $1 per year salary, but while serving in that capacity in 2016, his total compensation was $21.8 million, 1,700:1 versus the company’s median employee.
The median employee’s annual pay at Starbucks in 2022 is better, estimated at $35,423. But working conditions draw considerable complaints despite the “progressive” benefits. One former barista wrote in 2019 “…that working this near-minimum- wage job is so physically, emotionally, psychologically, and financially draining that trying to find another job in your spare time requires far more energy than you have left over at the end of your shift.”
Working conditions are also a major concern for employees at another target for unionization: Amazon, led by billionaire Jeff Bezos. The online shopping giant that has devastated the tax base of hundreds of small towns in America is also accused by employees of maintaining an unsafe working environment.
Data submitted by Amazon to the US Occupational Safety and Health Administration (OSHA) indicates that more than 34,000 serious injuries on the job were sustained by Amazon employees in 2021. That was twice as high as the rate at other warehouse entities and 20 percent higher than in 2020 at Amazon facilities.
American workers are becoming more aggressive in trying to defend their right to both a decent wage and a safe working environment. The Biden administration has indicated its willingness to assist in this quest, but big business with its thousands of lobbyists and billions in campaign dollars is determined to defend the status quo.
They have allies in senators like South Carolina’s Lindsey Graham. At a May hearing of the US Senate Budget Committee Graham objected to Amazon being hauled before the committee to explain its 59 violations of the Service Contract Act. Later, the committee heard from the Director of the Education, Workforce and Income Security branch of the US Government Accounting Office that 622 contractors with violations of the act were still able to get federal contracts worth $35 billion. By contrast, during the early days of the pandemic, Graham harshly criticized the $600 weekly bonus the Coronavirus Aid, Relief, and Economic Security Act (CARES) provided workers left unemployed, including nurses and other critical workers.
Over the past forty years the ability of workers to organize and negotiate for a fair share of America’s productivity has been emasculated by political and judicial decisions. Since 1983 union representation of the nation’s workforce has gone from 20.1 percent to 10.3 percent.
But in the recent past public approval of unions has jumped significantly. The latest Gallup polls indicate that 71 percent of Americans have a favorable view of labor unions compared to only 48 percent in 2010. And a Pew Research Study published in September 2021, found that 56 percent of Americans thought that the decline in union representation had been bad for the country. This change in public sentiment deserves to be respected by our legislative representatives at both the state and national levels
.
https://www.nytimes.com/2022/09/15/business/rail-strike.html
https://www.levernews.com/railroad-ceos-were-paid-over-200-million-as-workers-suffered/
https://thesoc.org/what-we-do/the-injury-machine-how-amazons-production-system-hurts-workers/
https://apwu.org/news/senate-hearing-investigates-union-busting-federal-contractors
https://news.gallup.com/poll/398303/approval-labor-unions-highest-point-1965.aspx