When Union ‘Successes’ Lead To Job Losses, Big Labor Shrugs Its Shoulders And Points Fingers

by | Apr 3, 2024 | IBT, Labor Relations Ink, Labor Relations Insight, Leadership, SEIU, UAW, Union Leaders, Unionized Company, Unions

We recently explored how unions cannot protect workers from layoffs but deflect responsibility and claim that “corporate greed” is to blame. That finger-pointing doesn’t stop when job losses result from two types of union activity: (1) Organized lobbying for minimum wage boosts and (2) High-profile contract negotiations.

Let’s recap the recent union responses to both.

SEIU and California’s fast-food raises

On April 1, the state’s fast-food minimum wage soared from $16 to $20 per hour for up to 500,000 workers after extensive lobbying by the SEIU, resulting in AB 1228. Months ago, businesses braced for increased labor costs, with Pizza Hut laying off 1,200 drivers. Several other companies still plan to adjust by freezing hiring, cutting hours, and axing hundreds of jobs.

The union response: SEIU is denying the simple existence of math. The union insists that the wage boost should not hurt employment because they believe large brands can easily absorb these raises. Yet businesses must make ends meet, and the SEIU’s reasoning also fails to acknowledge that smaller franchisees will shoulder much of the burden for this new law. Those franchisees are now gearing up for political action of their own.

Will there be exemptions? That depends. Gov. Gavin Newsom insisted that zero exemptions would exist, although Panera Bread franchisee Greg Flynn reportedly attempted to qualify for an in-house bakery exclusion. Newsom pushed back, and Panera raised their minimum wage to $20.

A twist: The UNITE-HERE union, which pointed to higher wages for these workers, recommended that an exemption for stadiums and airports be granted.

Now for a contract fallout roundup:

UAW vs. Auto Manufacturers

Stellantis announced layoffs of 400 salaried workers due to “unprecedented uncertainties” and the EV transition, although increased labor costs from the Big Three contract negotiations are also to blame.

The union response: Shawn Fain declared that these layoffs “won’t work.” He continued his dream-reality speech: “They don’t have to lay off a single employee. In fact, they could double every autoworker’s pay, not raise car prices, and still rake in billions of dollars.”

Teamsters vs. UPS

The Teamsters claimed a “historic” contract that actually wasn’t a win on several negotiating points. Still, the new contract boosted full-time UPS drivers’ average total pay and benefits up to $170,000. Five months later, UPS announced 12,000 job cuts. Although reports claimed that layoffs would focus mainly on corporate and administrative jobs, warehouses are cutting entire shifts in Pennsylvania, California, and New York, with whispers that driver cuts are coming in the latter state.

The union response: Workers who have challenged Teamsters brass were told that UPS “has a right” to lay off workers due to falling demand for shipping services in addition to higher labor costs. The Teamsters are also lauding a new agreement with USPS that could bring back some UPS jobs in Louisville, but that won’t be enough to staunch the bleeding.

WGA vs. Studios

The fallout of the Hollywood strikes is a different beast to nail down. 17% of industry workers reportedly lost jobs during the strikes. Yet the full effects of the new WGA contract’s pay boosts will take time to develop.

Conclusion

Unions primarily care about their own survival, and when their members are laid off due to rising labor costs, workers pay the ultimate price.

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