What Could Go Wrong?

So, the railroad strike was averted the day before the walkout, but what would a strike have meant? Freight railroads transport approximately 40% of long-haul cargo and 125,000 railroad workers. The strike would have crippled the country’s supply chain on many levels. Since trains are thought to be most important to retail and food supply chains, why would it have mattered to the electronics industry?

• The Association of American Railroads estimated a shutdown to cost the economy approximately $2 billion a day, further fueling rampant inflation.
• Trains haul cargo containers from major seaports, including industrial chemicals from China.
• Rail moves approximately two-fifths of long-distance U.S. freight and one-third of exports.
• Freight trains haul coal that fuels approximately 22% of the power in the U.S., threatening power grid reliability. It also brings crude oil from Canada into the United States. It handles the export of American gasoline and diesel to Mexico, and the Northwest depends heavily on rail to bring oil from North Dakota. A strike could push up gas prices again.
• Approximately 75% of automobiles are built in the U.S., and parts that move between suppliers and assembly plants also move by rail, affecting an already hamstrung industry. (See Continued Pressure on Automotive Supply Chains)—the day before the strike was averted, Norfolk Southern started to refuse to transport new vehicles.

Another Potential Strike Threat

An increase in union strikes will likely worsen the supply chain crisis as unions try to leverage ongoing worker shortages. The railroad strike is not alone in creating potential havoc. Teamsters are already threatening strikes by United Parcel Service regarding contract negotiations that must reach an agreement by August 1, 2023. Teamster president Sean O’Brien promises they won’t extend negotiations by one day before they walk.

UPS not only handles a large percentage of home deliveries but also delivers many of the goods found in stores, factories, and offices. Approximately 6% of the nation’s GDP is moved in UPS trucks annually. The explosive growth of online retail has made drivers more crucial than ever to the nation’s struggling supply chain. If the teamsters do strike, it will be the most significant strike against a single business in U.S. history—and so far, expectations are that the strike will take place.

Increased Union Presence in High Tech

For the most part, technology employees are well compensated and don’t need a union to advocate for them. If they do unionize, it’s likely not to be tied to wages but to discrimination of women and people of color and employees having their voices heard regarding issues including corporate political donations and selling their products to the military and law enforcement. Technology companies are, however, seeing an increase in labor organizations, especially in retail and warehousing segments. A handful of recent unionization attempts include:

• Apple store workers in New York’s Grand Central Station store are trying to form a Union, and the Communications Workers of America are now helping the 270+ employees to organize
• Alphabet staff created a minority union to negotiate with its Google parent. A small group of Google employees secretly organized, and the Communication Workers of America is bargaining for Alphabet Workers Union. Although members pay dues and the union has an elected board and paid staff, it won’t have the right to bargain with Alphabet because since it is not certified by the NLRB.
• While Amazon pursues a legal challenge to a union win on Staten Island, federal labor officials approved the election at the warehouse in Albany, where 400 workers will vote in mid-October on whether to join the upstart Amazon Labor Union that unionized more than 8,000 at the massive Staten Island warehouse.
• Unionization efforts are also taking place outside of the U.S. According to a February 2022 Korea Herold article: Samsung Electronics may face first labor strike over collapsed wage talks after 15 rounds of negotiations failed. Union activities began to take hold in Korea’s technology segment after Samsung’s Lee Jae-Yong declared an end to its controversial “no union” policy in 2020. It took until August 2022 to reach an agreement, settling for a 5% salary increase for the year, a 4% increase for excellent performance, and an additional paid holiday annually.

Even if unionization efforts don’t take hold among the majority of tech workers, the fact that the conversation is happening marks a fundamental change of attitude. Establishing how much power workers have to influence decisions at their companies, who gets fired or hired, and whether the use of contractors should continue—that debate isn’t yet over.

Where employees are organizing, there is a greater likelihood of potential strikes. No matter the reason, be it wages, social or environmental in nature, if unions are growing in the industry, it will be interesting to see how this plays out and, ultimately, what the impact will be on supply chains.