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In 1919, the United States was gripped by two seemingly unrelated trends: a global pandemic (influenza) and a wave of labor unrest. Four million workers, or a fifth of the workforce, went on strike this year.
Fast forward a century and history seems to be repeating itself. In the wake of the COVID-19 pandemic and other complex economic factors, labor strife has rocked a variety of industries: auto workers, nurses in several states, Hollywood writers and actors, and journalists went on strike. All of a sudden, union movements emerged in tech and other non-traditional sectors. Could this all be just a coincidence, or is there something more going on?
Any major shift in the dynamics between labor and management has implications for the present and future of employment in the United States. A deeper understanding of the forces at work could be useful for a variety of companies.
When analyzing the similarities and trends of these recent examples, three lessons emerge:
1. Rewarding work for company success
When business is booming, executives who have a stake in the company are rewarded. Workers lower on the food chain typically do not see a similar increase in their pay. This phenomenon is nothing new; However, many workers were hit disproportionately hard in the 2008-2009 financial crisis and again during the recession resulting from the COVID-19 pandemic. Now that the economy has improved in several sectors, workers are trying to make up for lost profits and get what they believe is their fair share.
Questions like these motivated the United Auto Workers (UAW), which accepted lower wages for new workers after the Great Recession. Auto companies’ business results improved significantly, and the UAW sought to regain lost benefits and increase wages for all groups of workers. Its members, motivated by rising inflation and leveraging their collective power, have successfully navigated significant shifts in compensation and massive increases in benefits. Similarly, Hollywood writers and actors have recently made significant deals to navigate changing business models and protect their livelihoods. The question is: did it have to be so difficult?
The bottom line: Today’s workforce is increasingly aware of their companies’ performance and has significantly more transparency about what their colleagues and bosses are earning. You also have more opportunities to mobilize. Work diligently and proactively to understand and design systems where business success can deliver greater returns to your employees to avoid lengthy negotiations.
Related: 75,000 Kaiser Permanente workers strike, demanding better pay
2. Disenfranchised employees
When HBO’s streaming unit was renamed “MAX” in 2023, writers, directors and producers were no longer listed individually. This struck a nerve within the guild that represents each faction. Fears about the introduction of AI were addressed in the final resolution on the writers’ strike.
The sense of disenfranchisement among workers angry about the direction of their companies or industries was not unique to entertainment strikes. While there may have been more money at stake in Hollywood, many areas of work are at risk of AI intrusion in ways that threaten workers’ livelihoods.
Conclusion: Open communication from management about changes to company policies, practices and instructions is essential. Companies must evolve to stay afloat. The more transparent management can be about this development, the less likely employees are to feel disenfranchised. Engage directly in the process and consider how technological change can help, what concerns there are, and how you can address them together to retain key talent and keep engagement high. With AI in particular, consider what skills are required as business models evolve and how you can adequately support and train your employees along the way so they can use these new tools to help grow your business.
Related: Huge UPS strike could ruin US economy and benefit Amazon
3. Investors and owners can be disconnected from the everyday lives of employees
The rise of venture capital and hedge fund investments in health care and print journalism—to name just two—led to efforts to increase efficiency and profits. This resulted in many employees, many of whom came into this career with an altruistic or public service mindset, feeling that their company was becoming increasingly disconnected from their day-to-day work and, to some extent, their values/motivations for working in Field. Some either gave up their careers or became disillusioned because they felt the incentives were misaligned between the purpose of their work and the processes they were now expected to follow.
Conclusion: The stronger the connection between management and labor, the greater the risk of misaligned incentives between the two parties. The gap must be closed as industries consolidate and efficiency continues to increase. Reduce the knowledge gap between C-suite executives and frontline employees. Understand what motivates employees to do their jobs well and involve them directly in designing more effective and efficient processes – this will lead to better results, engagement and change management as companies evolve.
Related: How your business can stay ahead of the curve by looking back and thinking forward
In summary
How can managers anticipate causes of labor unrest before they become a cause for concern? The following practical considerations may help achieve one or more of the above goals.
- Structure incentives and compensation models so that everyone benefits when business results improve.
- Keep your employees informed about where business models are changing (e.g. streaming, AI, etc.) and proactively think about potential employee concerns and how to address them.
- Involve employees directly in designing more effective and efficient processes and share your goals more transparently. Listen to their concerns and find a way to improve business results, but employee engagement and alignment is an important part of the equation.
- Demonstrate the importance of “walking in the employee’s shoes” – have managers spend time doing day-to-day work better to understand their thoughts, opportunity areas, etc.
- Establish a system of regular pulse checks with the entire organization to catch problems before they become serious.