Companies are getting more proactive about staving off unions in light of high-profile campaigns, like the one by Amazon workers in Staten Island, New York.
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Rian Wathen is in the business of helping companies avoid unionization. He’s getting plenty of calls lately.
This month’s vote to start a union by Amazon warehouse workers in Staten Island, New York, sent a jolt through employers across the country. They’re nervous that if Amazon, worth $1.5 trillion, couldn’t prevent workers from organizing despite spending $4.3 million on anti-union efforts last year, what chance do they have?
“It woke them up,” Wathen said. “I think people realized no one is safe anymore.”
Approximately 2,600 Amazon employees voting pro-union in New York is causing ripples that may affect millions of workers and their bosses across the country. Some companies are taking no chances, even if their employees have shown zero interest in unionizing. Consultants like Wathen are advising them to educate workers on labor law and the process of collective bargaining, noting that it can take years to negotiate a contract and there’s no guarantee that pay and benefits will improve. They’re urging companies to speak to their employees about concerns such as bad bosses and lack of pay raises and act quickly to address them.
“Workers will generally not unionize unless there are issues,” said Peter List, CEO of Kulture, a labor relations consultancy. “If a company wants to stay union-free, they have to stay issue-free.”
Union membership has been in decline for decades — falling to 10.3% of the American workforce in 2021, down from about twice that in 1983 — but there’s been increased momentum during the pandemic. Petitions to form a labor union shot up 57% in the last six months, according to the National Labor Relations Board, with campaigns at Amazon, Starbucks, John Deere, Kellogg’s and REI among the highest-profile. Labor unions are also enjoying the most public support since 1965, with two-thirds of Americans saying they approve of them, according to Gallup.
“Winning is contagious,” said Janice R. Fine, a labor studies professor at Rutgers University. “Workers are seeing what’s possible.”
Keeping the unions out is a knee-jerk reaction by businesses concerned that collective bargaining will usher in higher costs and lower profitability, plus give them less control over their organizations. Employers pay one-third more for union workers versus non-union workers, according to data from the Bureau of Labor Statistics. Those higher costs might force the company to raise prices, hire fewer workers or invest less in the business, in turn making them less competitive in the marketplace.
Investors also don’t like when profits are squeezed. Publicly traded companies where employees voted to form a union proceeded to lose 10% or more of their market value in the following months, according to a 2009 report from the National Bureau of Economic Research.
The changes brought by unionization could also have an impact on executive pay. Median CEO compensation rose 20% last year from 2020, to $14.3 million, while median employee compensation is down 8.3% from 2020, to $61,396, according to Equilar data. The ratio between CEO pay and worker pay in 2021 was 245:1, representing a 28% increase from 2020 and a 35% increase from pre-pandemic 2018.
Employees, however, have more leverage in a tight labor market, with many companies struggling to hire and keep workers. The labor shortage has prompted companies like Target, Amazon and Walmart to raise wages and offer new benefits, like free college tuition.
While workers are often after higher pay and better benefits when they decide to form a union, other requests may include better work-life balance and more input on company decisions. At Amazon, employees were critical of high productivity quotas and constant surveillance by technology they said made them feel like cogs in a machine.
“People will work for money, but they will die for respect,” said Jason Greer, president of Greer Consulting. “You might have employees saying they want a union, but what they are really saying is I want executives to recognize I’m a human being and not someone who shows up to make you all richer.”
Workers also have the support of the most pro-union administration in recent history, with President Joe Biden going so far as to say “Amazon, here we come” at a trade-union conference this month, expressing his support for workers seeking to organize.
Faced with this gathering momentum, the nations’ legion of union-avoidance consultants will stay plenty busy. A wider range of organizations, like tech companies, non-profits and food and beverage companies, have been reaching out to Greer to enlist his services. These types of organizations previously hadn’t worried much about unionization attempts, he said.
“I’ve been impressed that more companies have been willing to listen to me,” said Greer, who calls himself the “employee whisperer” because he speaks with thousands of employees a year to understand the good, the bad and the ugly of their jobs and communicate that back to management in the hopes of quashing any need for a union.
Companies that have distributed workforces — either because employees are working from home, or are spread out across many locations — are also expressing fresh concerns they may not have a good pulse on employee happiness and may be left more vulnerable to union attempts, said consultant Rian Wathen.
“Some ask for a silver bullet, but there isn’t one,” he said. “My advice for clients is the same: Are you listening to employees and are you acting on their concerns? I think [recent events] will motivate people to take the second step.”
