The Biggest Strike in America Is About How Much Bosses Can Gut Your Healthcare

Originally published in VICE on September 18, 2019.
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When about 48,000 workers went on strike Monday against General Motors, they launched the largest American labor stoppage against any business since the financial crisis. The striking union—the United Auto Workers—is confronting vicious headwinds in the form of always-cheaper foreign labor, reduced car sales, and pressure to invest in electric and self-driving vehicles at a time of impending climate catastrophe.

On top of all that, workers formed picket lines because GM is trying to effectively cut their hard-fought healthcare benefits. According to the Center for Automotive Research, a Michigan-based think tank that receives some funding from auto companies, the average UAW worker pays about 3 percent of their health care tab, compared to 28 percent paid by the average American worker. Crain’s Detroit Business reported on Monday that GM’s initial contract offer asked workers to start paying 15 percent of their healthcare costs.

While such a move by an employer may seem fairly ordinary by contemporary standards, it wasn’t that long ago that Americans would have viewed this request as a huge scandal. In fact, experts said, that a once-mighty labor union is fighting tooth and nail to save generous health plans speaks to the economic precarity most Americans have grown to numbly accept.

“Having to pay large amounts of your health-care, that is still a fairly recent phenomenon,” said Erik Loomis, a labor historian at the University of Rhode Island and author of A History of America in Ten Strikes.

Loomis pointed to a 1983 labor stoppage where thousands of copper miners and mill workers went on strike for almost three years against the Arizona-based Phelps Dodge Corporation. “One of the key issues of that strike was that workers were so outraged by the request that they pay part of their health care,” he explained. “It was unprecedented, and yet today it’s become so normalized. Everyone complains about it, but employers just slowly force more and more of their costs onto their workers.”

Rather than ask why UAW workers pay so little in healthcare costs relative to others, Loomis said, the conversation should be framed around “workers defending what they have, and not letting companies cede more and more of their responsibility.”

Employer-based health insurance was actually something of a historical accident in the United States, led partly by labor unions that were barred from negotiating over wages during World War II. That led unions to begin focusing on other types of permissible fringe benefits, including employer-sponsored insurance. Many non-union companies followed suit, facing pressure to compete with unionized firms. Subsequent changes to the federal tax code made offering health insurance even more attractive for employers, so much so that 70 percent of the population was covered by private health insurance in the 1960s, up from nine percent in 1940.

Today, of course, when “job hopping” is common and the so-called gig economy means many workers are not full-time employees, it’s become painfully evident that tying health insurance to work is less than ideal.

Shaun Richman, who directs a labor studies center at SUNY Empire State College, said there is a strong case for “getting the boss out of the doctor’s office” altogether. Employer-based health insurance, he argued, “is plainly outmoded and is absolutely killing unions.” His thinking is partly strategic: Every time a union starts a round of contract negotiations, they almost invariably begin by fighting back against proposed healthcare cuts. “There’s simply no round of bargaining that employers won’t put healthcare on the table, and it’s been devastating,” Richman said.

Indeed, the fight over healthcare benefits is central to understanding the last few decades of labor disputes in the United States.

“The major issue we saw during labor walkouts in the 1990s and 2000s had to do with the restructuring of healthcare plans,” said Jake Rosenfeld, a sociologist at Washington University in St. Louis and author of What Unions No Longer Do. “Wages were really the secondary concern.”

Whether the auto workers can make their fight for affordable healthcare resonate with the broader public may be key to the UAW sustaining support for the strike in general. Alexander Hertel-Fernandez, a political scientist at Columbia’s School of International and Public Affairs, said auto workers might struggle to engender the same level of enthusiasm that striking teachers have across the country beginning last year. In fact, they might not even reach the same level of support as workers at other recent service-sector strikes like those at Stop & Shop grocery stores and Marriott hotels.

“My research and the work of others suggests that it may be easier for workers to build solidarity with their broader communities when they have daily interactions and are in the same social networks as the public,” Hertel-Fernandez said.

Still, as Rosenfeld pointed out, one thing working in the UAW’s favor is the clear profit margins enjoyed recently by U.S. auto companies. “GM is highly profitable now, and was bleeding money during the last 2007 walkout,” he said.

While the last UAW strike in 2007 ended after just two days, at least one union leader suggested Monday this labor stoppage could go on for much longer. On Tuesday, the White House reportedly began trying to broker a deal to end the strike, but GM also announced that it would be cutting off its share of strikers’ health benefits, shifting the burden to unions and telling workers they could apply for COBRA. On top of this financial blow, the average full-time UAW will be paid just $250-per-week while the strike stretches on—assuming the union’s strike fund holds up.

“They’re in a war for their lives, and the company is basically putting a gun to the unions’ head,” said Richman. “They’re saying we’ll reopen one of these factories if you agree to all these other concessions. I don’t think the UAW has much choice but to stand and fight, but this is not public education—schools can’t be shipped overseas. These jobs very much can be shipped overseas and have been. That threat is very real.”

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Labor Reawakens

Originally published in the Baltimore Sun on April 26, 2013.

This week, hundreds of Chicago workers organized a major labor strike, demanding a wage floor of $15 an hour and the right to unionize. Their protests come on the heels of the largest strike in the fast food industry’s history, which took place in December in New York City, and a nation-wide Walmart strike to protest what workers felt were unfair wages and treatment. Here in Baltimore, workers have also begun organizing around the idea of “fair development” — calling for higher wages and other benefits.

Chicago’s strike represents just how contagious this type of unrest has become. Led by the Workers Organizing Committee of Chicago, in collaboration with other local worker groups and unions, they are leading the “Fight for 15” campaign to raise the minimum wage.

Who can blame them? Minimum wage in Chicago, at $8.25, is already $1 more than the federal requirement. Yet if one works 40 hours a week, for 52 weeks a year, the resulting salary is $17,160 before taxes, well below the poverty level for a family of three. In November, the Census Bureau announced that more than 16 percent of the population lived in poverty, including almost 20 percent of American children. This figure had risen from 14.3 percent in 2009 and was at its highest level since 1993.

The National Employment Law Project found last year that low-wage positions made up just 21 percent of the jobs lost during the recession, but they accounted for 58 percent of jobs “recovered.” Additionally, researchers found that food service, retail and employment services represented 43 percent of employment growth over the past two years.

The workers organizing strikes and protests face tough odds, as unionism is widely perceived to be on the wane, even in the public sector. But something has to give. A mere 88,000 jobs were created in March, and labor-force participation is at its lowest since 1979, as millions have decided that the work world offers insufficient opportunities. If we can’t figure out a way to incentivize stable employment through livable wages, then we could be in for years of economic stagnation or worse.

The protesting workers doubtless have decided they need to take matters into their own hands because Washington has done little to help.

To be sure, President Barack Obama has talked extensively about the need to revive the middle class and about the ill effects of a system in which the rich get richer and the rest fall behind. He has endorsed increasing the minimum wage and included a proposal to do so in his budget package.

But he has managed to accomplish little. Even talking about the problem inevitably leads to Republican cries of “class warfare” that drown out and end the conversation. But it’s a conversation we need to have. Real annual median household income has dropped to $45,018, from $51,144 in 2010. Virtually all the gains from the economic recovery continue to go to the richest people in the United States.

The increasing polarization of our wealth is stunting economic growth, and that’s bad for the poor and rich alike. But it is not inevitable. We’re glad to see workers in Baltimore, New York, Chicago and elsewhere speak up and demand change. Washington needs to brave up and confront this too. An increase in the federal minimum wage won’t solve the problem, but it would surely be a step in the right direction.