If you thought 2021 could be called “the year of the employee strike,” 2022 might make you reconsider. A total of 265 work stoppages involving 140,000 workers on strike took place in 2021 according to Cornell University’s School of Industrial and Labor Relations. Yet 2022 is on track to exceed that, with 148 strikes already recorded in the first four months. Workers are demanding higher wages, better benefits, and improved working conditions.
This industrial action comes amid the backdrop of the “Great Resignation” with a record-high 4.5 million American workers quitting their jobs in March alone, creating instability across many industries now unable to meet demands. This raises questions for investors as to the direction their money should flow. It also offers opportunities for them to make an impact on areas of corporate governance at a time when the issues are especially ripe.
Why Workers Are Striking
Joseph McCartin, a professor of history and the director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University, told National Public Radio: “One [reason] is that workers have just come through the pandemic, and the economy is just beginning to improve. And usually, after a big crisis and when things begin to improve, workers can become more militant.”
He added: “People see now that they have an administration in power that’s really openly siding with workers and even taking positions in support of strikes. It’s very unusual for cabinet members to visit strike picket lines,” as when US Labor Secretary Marty Walsh visited a strike picket line of Kellogg’s workers in Lancaster, Pennsylvania on October 27.
The rapid growth of the jobs market—with 199,000 more created in December and a fall in the unemployment rate to 3.9%, according to the BLS—is giving workers greater confidence to make demands. The White House has picked up on this shift. “The strength of our recovery is helping us flip the script. Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers,” President Biden noted in June.
Economics aside, the pandemic has had another effect that is helping to drive worker demands. Speaking to the Guardian newspaper, Liz Shuler, president of the AFL-CIO, notes that many workers have been told how essential their jobs were and how much the nation valued them during lockdown. In turn, some workers feel a sense of ingratitude and injustice when what they see as reasonable demands are rejected by companies that have clearly been profitable.
How Corporations Can Thrive
Other grievances are more long-standing. For instance, the demand for higher wages continues to be a major factor. But more recently, this has been driven by increased perceptions of inequality. As of October 2021, there were 745 billionaires in the US, with a combined net worth of around $5 trillion, more than that of the lowest 50% all of US citizens.
However, a trend that might be seen as a crisis for companies and employers also provides an opportunity. Research published last year by NYU’s Center for Sustainable Business indicates that companies seeking to create “quality jobs” with security, viability, equity, and flexibility (SVEF) at their hearts may be best positioned to enjoy strong financial performance.
As the trend of the employee strike continues, those companies that embrace a flexible, holistic stakeholder capitalism approach may provide better returns for investors. Furthermore, by recognizing employees as ESG stakeholders and supporting them as such, investors can further maximize their impact. That benefits society as a whole.