To strike or not to strike? That is the question organized labor asks itself when it has exhausted all other options to address disputes with management. But according to the U.S. Bureau of Labor Statistics, only about 10% of wage and salaried workers belonged to unions, half what it was 40 years earlier.
Except for the public sector, which has seen impressive growth during that time, the vast majority of workers do not have the ability to bargain collectively for higher wages. There are five major labor unions that are currently on strike, according to Nerdwallet, which keeps track of these things so I don’t have to, and a couple of others, including the Association of Professional Flight Attendants, that are currently pondering work stoppages.
The three that have gotten the most attention – and for good reason – are the United Auto Workers, the Screen Actors Guild and the Writer’s Guild of America (which I will collectively call SAG). And the contextual differences between the actions of the UAW and the writers and actors guilds are immense. More on that later.
As I wrote on Substack, SAG, which went on strike in May, is mostly fighting a losing battle. The unions are rightly concerned about the use of artificial intelligence. Actors and writers whose likenesses or words are used by AI in production should be compensated. That’s a matter of fundamental fairness. But negotiations to limit the use of technology in order to protect jobs, as the union is reportedly engaged in, is a fool’s errand. If that logic had prevailed 120 years ago, the assembly line would never have been invented.
The union also wants to preserve the so-called residuals model. When a successful show ended and went into syndication, it would air on an over-the-air or cable channel that would typically pay royalties back to the creative community, with the amount increasing each time it’s shown and every time a new channel picked up the series or film. But that kind of syndication is becoming less common as cable television dies a slow death and is replaced by corporate streaming platforms. By contrast, streaming payments are static and based largely on the number of subscribers. That means less money for the writers and actors – and also less money for the corporate content providers.
Media mogul Barry Diller, the former chairman and chief executive of Paramount Pictures, told CBS in July that a “perfect storm” is brewing and that “the strikes could potentially cause an ‘absolute collapse’ of the industry if a settlement is not reached before September.” That sounds a bit melodramatic, but the 81-year-old Diller knows the industry as well as anyone.
Cracks are already developing. HBO’s Bill Maher recently announced that he would resume production of his show, without the writers, because other staff members of his talk show, Real Time, who weren’t on strike hadn’t worked since May and were struggling to pay their bills. Some commenters on Maher’s social media posts branded him a “scab.” Maher subsequently reversed course because, he claimed, labor and management had agreed to return to the bargaining table. Drew Barrymore and Jennifer Hudson made similar announcements about resuming their daytime talk shows and, like Maher, they quickly backtracked under tremendous pressure.
The auto workers strike is another matter. They argue that they deserve better pay and benefits, in part because the industry has seen record profits, even as sales have dropped. But as the New York Times observed (free link), it seems that the battle is really over electric vehicles (EVs) more than anything else.
Under pressure from the federal government and consumers, automakers are investing billions in the development of EVs, while still deriving most of their revenues from gasoline- and diesel-powered vehicles. At the same time, the Big Three are facing stiff competition from nonunion EV makers such as Tesla.
The UAW’s current demands are ludicrous: a 40% rise in wages over four years (GM has offered 20%); a new 35-hour work week whose pay reflects the old 40-hour week; and a return to the defined-benefit pensions that helped sink the industry in the 1970s, adding greatly to the legacy costs of retirees, while doing nothing to address the drops in profits during the downturns the industry is famous for. To combat the shift of auto manufacturing to union-unfriendly states in the South, the UAW wants workers in these new nonunion factories to be covered by the new UAW national contract.
But EVs clearly have caused concern among union members. Compared to gasoline-powered vehicles, EVs have fewer parts and would surely render obsolete some of those union jobs. There are no fuel injectors, exhaust systems, or catalytic converters in EVs, for example.
The future is uncertain for both the entertainment and auto industries but, as New York University marketing professor Scott Galloway explains below (at 3:20), the UAW stands a better chance of getting more of what it wants because the auto industry’s market position, despite its inherent uncertainties, is much stronger than the entertainment sector’s.
“Disney [stock] is at a 10-year low, Viacom is off 75% and households with cable have gone from 87% to 47%,” Galloway said. “So they struck at absolutely the wrong time.”
It’s really a tale of two strikes in an era of shrinking union activity. Like the UPS drivers, the auto workers will likely see a favorable settlement, despite the UAW’s utterly fanciful demands.
As for the actors and writers, revenues are down in the industry. As I wrote in a column in August on the SAG strike in Connecticut, it’s hard to find a solid estimate of the unemployment rate for actors, and I haven’t found any for screen and television writers. I’ve seen out-of-work numbers for actors that range from 33% to 85%.
That’s not exactly a position of strength.