We're entering the second week of the largest strike in recent U.S. history. More than 40,000 Verizon employees walked off the job last Thursday, joined by thousands of low-wage workers from other companies. After contract negotiations between Verizon and their labor union stalled, these workers took to the streets for assurances that their jobs will not be outsourced or automated in the near future.
The dispute was a long time coming. In the 1960's, nearly one third of U.S. workers belonged to a union. Now it's one tenth. This decreasing union membership is partly caused by anti-union political campaigns and resulting right-to-work laws, which ensure workers reap the benefits of union negotiations without becoming a member. Unions are also affected by the decline in traditionally unionized industries like manufacturing.
At the same time, the trend towards automating and outsourcing jobs is becoming a greater concern for low wage workers. Though experts disagree on the long-term effects of automation technologies, employees in surprisingly varied industries are finding themselves vulnerable—from retail workers to anesthesiologists.
Verizon, for example, has not only demanded a series of cuts in traditional employee benefits like healthcare and pension plans; it has also called for work concessions that would permit it to move jobs to Mexico and the Philippines, transfer workers away from home for lengthy periods, and close call centers.
Why is it important?
The stakes are high. Many are calling this strike a fight for labor-union survival in advanced, technology-driven industries.
With labor unions losing influence, automation on the rise, and wages remaining stagnant since 2007, many workers are worried about the future and disenchanted with the status quo. Meanwhile, technological advances create pressure on companies to change the way they do business in order to stay competitive, and the changes often mean fewer jobs and less work, even for traditionally higher-wage workers. The issue has become a prominent political debate, with prominent Senators like Elizabeth Warren supporting the union and a public back-and-forth between Bernie Sanders and Verizon's CEO.
Should Verizon—and companies in similar situations—be free to automate and outsource jobs?
In the face of an evolving economy, companies need to be held accountable for treating their workers fairly in contract negotiations. Verizon, similar businesses, and the American workforce will all be better for it.
The Verizon strike will set precedent for future union-company negotiations. It will establish rules for companies trying to cut job security, wages, benefits and pensions. As union leader Dennis Trainor said, "if a hugely profitable corporation like Verizon can destroy the good jobs of highly skilled workers, then no worker in America will be safe from this corporate race to the bottom.”
This strike can make Verizon see the disadvantages of making workers bear the brunt of cutbacks. Verizon now has 40% fewer workers than it had 10 years ago, and is failing to fulfill agreements because of lack of adequate personnel. Indeed, many believe Verizon is failing to expand FiOs service into lower-income areas precisely because doing so would require it to maintain a larger unionized workforce.
Companies should expect—and even welcome—pushback when cutting their most important asset: the people who work for them.
Many industries are changing quickly; companies have to be able and willing to change as well, even if that means automating, outsourcing, or consolidating jobs.
Verizon is faced with a rapidly evolving industry with new demands. Unfortunately, many of these workers jobs (at least as they exist now) are tied to parts of the industry that are disappearing. Landline phone service is now 30% of Verizon's revenue, down from 60% since 2000, and only 7% of operating income. To stay competitive, the company is investing in Internet and video services—and that shift away from landline service requires a different workforce with different skills and will mean increased automation, outsourcing, and job consolidation.
Verizon CEO Lowell McAdam put it, "nostalgia for the rotary phone era won’t save American jobs." Companies and their employees need to be realistic about what jobs are valuable and why. McAdam says, "we’re asking our employees to look at the facts and engage in an honest conversation about what needs to be done" in order to stay profitable and continue to provide jobs (not to mention phone service) in the first place.