In the world of labor negotiations today, the writer of a hot TV show has more power than an auto assembly worker with a rivet gun.
It’s all about supply and demand.
Manufacturing jobs easily can be exported to countries outside the United States, but jobs writing shows like “CSI” or “24” are unlikely to be outsourced to places like India or Mexico in the foreseeable future.
As the members of the Writers Guild of America, representing Hollywood TV and film writers, went out on the picket line Monday, they definitely find themselves in a better bargaining position than many lower-skilled workers throughout the country.
Why? Because they hold “knowledge based” jobs.
You can’t just put an ad in a Hollywood trade paper and get 10,000 applicants who can do the job, says Marick Masters, a professor of business administration and director of the Center on Conflict Resolution and Negotiation at the University of Pittsburgh's Joseph M. Katz Graduate School of Business.
“They are in a special situation and can exert considerable leverage given their talent,” he adds.
When you take the talent and the fact that they’re not readily replaceable, these unionized workers have more power at the bargaining table.
There are other jobs and professions that fit this category, Masters points out, including nursing, physicians, aeronautical and construction engineers, patent attorneys and educators, and jobs you might not think of, such as casino dealers.
Unionization among many of these professions has seen gains in recent years, including significant increases among casino workers, Masters says. But, he adds, it’s been hard for traditional unions such as the United Auto Workers and the Teamsters to make significant inroads among these knowledge-based jobs.
Worker bargaining power also comes from being able to make a quick and decisive impact to a company’s bottom line as a result of a job action or threat to strike, especially if the firm is publicly traded. If the workers go on strike, will a company’s stock take a hit? That’s a key question.
In the past few weeks, the UAW held short strikes at both General Motors and Chrysler, but the work stoppages did little to rattle Wall Street. (Workers at both automakers made significant concessions and were promised little in job security. Just last week Chrysler announced it was cutting up to 12,000 jobs.)
It’s the difference between a business that makes money from “intellectual capital” and one that makes money from manufacturing prowess, says Peter Cohan, a management consultant and venture capitalist.
“People will stop watching Jon Stewart if he stops being funny. And the writers come up with the jokes, a form of intellectual capital,” explains Cohan, who is also a management teacher at Babson College. “So I suppose without the writers, Jon Stewart loses his audience, which can only watch so many reruns. With a smaller audience, Viacom can’t charge as much to advertisers.”
By contrast, he continues, “a car company depends on people, to be sure, but I guess there are more people in the world that can make cars if the UAW goes on strike than there are writers who can make Jon Stewart’s audience laugh. I would think it less likely that Viacom could find a lower-paid joke writer in China who could develop timely and funny material for Jon Stewart.”
But even having that kind of specialized talent doesn’t mean workers will have the upper hand forever.
The writers’ situation points to a larger transition in the labor movement.
“We had the industrial revolution, then the technology revolution. Now we’re stepping into the next level,” says Tom Mobley, a professor at Miami University’s Farmer School of Business.
Technology programmers had a lot of power in the 1990s because they could make or break business, but engineers in other countries figured out how to do the work, and now a lot of the jobs have been outsourced to places like India. “They were able to do it a lot cheaper,” Mobley adds.
Even in the case of the Hollywood writers, companies are trying to mitigate their reliance on these workers by turning to reality shows, which require little or no writing.
Of course, one big power drain for all unionized workers is that employers are allowed to replace striking workers, says Josiah Bartlett Lambert, author of "If the Workers Took a Notion" and associate professor of political science at St. Bonaventure University.
“The U.S. is the only advanced industrial democracy that allows employers to hire permanent striker replacement,” Lambert explains. “The current legal framework isn’t real supported and I don’t see labor law reform happening.”
While there are some bright spots for unionization in the United States, union membership is near an all-time low of 8 percent of the work force, compared with 35 percent 50 years ago. Without that strength in numbers, workers' bargaining power will suffer, even for knowledge-based workers, Lambert says.
Will unions ever re-emerge? “The American labor movement’s obituary has been written many times before,” Lambert says. “In the early 1930s, the president of the American Economic Association proclaimed the labor movement was dead. That was just before the creation of the CIO, the UAW, the steel workers union, and a five-fold increase in labor movement membership.”
Lambert believes it won’t be labor law reform that could eventually spark a labor movement renaissance — “it will come from the workers themselves.”
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