June 2022

Fed Up?

Between October 2021 and March 2022, there were more than 1,000 petitions seeking union representation, which was up over 50% from the prior year. One important grassroots case involved Amazon’s Staten Island warehouse, home to over 8,000 employees, which won the right to unionize. Amazon employs over 1 million workers, and additional Amazon facilities are now considering whether they should follow suit. Employees at other large tech firms such as Google and Apple are organizing, with Google workers having formed the first large tech union in January 2021. Outside of tech, Starbucks has more than 200 locations seeking to unionize, several of them successfully. To combat the inroads of the labor movement, Starbucks announced the suspension of buybacks in order to reinvest in its labor force and stores.

Union activity has increased, with strikes winning significantly higher concessions from employers than has occurred in the recent past. For example, Deere union members initially rejected a 10% wage increase for an eventual 20% with signing bonuses. Kellogg’s employees went on strike and negotiated a 15% wage increase that was initially proposed at 3%.

Could these be harbingers of a societal shift in the leverage workers have to dictate the terms of their employment? So far, companies have been able to combat higher wages and commodities inflation by raising prices; but if labor costs continue to climb greater than expected, profit margins of companies and industries may start to be impacted across the board.

Rosa Y.C. Chen

Director of Research & Portfolio Manager

Our Team