Cost of a Strike: Billions with a “B”

Strikes take their toll in many forms, and whether they are short or very long, sometimes the damage is irreparable. With lengthy strikes, jobs can be lost, careers ended, violence can erupt, sometimes even death, property destruction, loss of friendships, including family members, marriages ended, foreclosure, credit ruined, children and spouses without insurance, and birthdays, holidays and even Christmas pass on by month after month, year after year.

All of these things can happen during a strike – and for what exactly? A 3% raise, 5% or even 10%. Do the math, figure out how long it would take to make up the monetary losses of a strike, much less all the non-monetary losses. Most strikers do not realize that even after a short, simple 2-week strike, it would take well over a year recover 2 weeks of lost wages… and that’s with a 3% increase (making $15 an hour).

Take the UPS-Teamsters strike from 1997, it lasted 15 days. In the media, the company blinked and the union won. Or did they? The strike cost the average full-time employee $1,785 in lost wages and an estimated $3,065 in annual profit sharing. Studies show that it would take almost the entire five-year term of the agreement for those employees to recoup it all. You cannot tell me that it was truly worth it to those union members. Beyond the UPS losses, remember that during the strike the UPS competitors made a killing, too. U.S. Postal Service–$450 million increase in revenues. FedEx–a 15% increase in shipping volume for the next several years and maybe to this day.

Or is the strike for dignity and respect, benefits, or job security? What is really worth having a 3rd party decide your fate over? What are you personally willing to risk because a union promises each and every employee everything their heart desires? Look around… do you really think every employee truly has exactly the same needs? Pick anyone at any company anywhere in the world and ask them if they don’t want something–something more than they have now: money, respect, a promotion, a parking space, flex time, better benefits, free benefits, blue M&Ms. EVERYONE wants SOMETHING.

The recent American Axle strike headlines read: “Strike Cost American Axle $370 Million in Sales”; “American Axle Strike cost GM $2.6 billion”; “American Axle Details Layoff Plans”; and “American Axle Strike: Was it Worth It?”

Another headline: “Screenwriter’s strike cost California $2.1 to $2.5Billion”. The Milken Institute goes on to report that the 3 month strike also cost 37,700 jobs in related industries and jobs and pushed California into a recession. Of course, we all know what it did to our television shows and now a strike-vote looms for Hollywood actors.

Bottom Line: please think about unionization before you hurt yourself, the ones you love or the rest of us with a strike that ultimately will not benefit any one–not even the union. I need my kids in schools, my car and its parts and my M-TV… just think about it and do the math, too.

About the author

    Union Proof

    The UnionProof team at Projections believes that every company can be an employer of choice. Over 40 years of experience have taught us that connecting with employees is the clear path to creating successful companies that matter. We give our clients the ability to become an employer of choice by providing resources that are highly effective, simple to use, and that deliver behavioral change at a cultural level.