Thousands of workers across the country have been going on strike or are threatening to go on strike this summer—fighting back after decades of declining labor actions and union organizing that fueled rising economic inequality. A new Economic Policy Institute report examines the economic conditions spurring this rise in labor actions, highlights the limitations on workers’ ability to strike, and recommends policy reforms that could strengthen workers’ fundamental right to strike.
The U.S. economy has been churning out radically unequal income growth for decades, with essentially all of this increased inequality stemming from unbalanced bargaining power in the labor market. As unionization rates fell sharply in the U.S. beginning in the late 1970s, the share of income going to the top 10% of households has climbed steadily. If this decline in unionization hadn’t occurred, median wages would have been 8% higher by 2017, which translates into over $3,000 annually in lost wages for a full-time worker. Further, typical workers’ pay has lagged productivity gains. From 1979 to 2020, net productivity rose 64.6% while the hourly pay of typical workers grew just 17.3% (after adjusting for inflation).
“There has never been a sustained period of broadly shared growth in any advanced economy without strong unions. While high and rising inequality is not an inevitable feature of capitalism, it does seem to be inevitable when unions are under assault,” said Josh Bivens, EPI Chief Economist and co-author of the report.
Given this backdrop of high and rising inequality in the labor market, workers are taking collective action to improve their pay and working conditions. In 2022, the National Labor Relations Board saw their highest increase in caseloads (union election petitions and unfair labor practices) since the 1950s. The number of workers involved in major work stoppages grew by nearly 50% in 2022, and preliminary Bureau of Labor Statistics data indicate that the number of workers on strike in 2023 will be even higher.
But after decades of policy attacks on the right to unionize and strike, the number of workers involved in major work stoppages remains significantly lower than levels in the early 1970s. Many categories of workers—like those who work in agriculture—legally lack the right to strike due to long-standing racist occupational carve-outs. In some cases, employers can legally replace striking workers permanently, and striking workers are ineligible to apply for unemployment benefits in most states.
The report argues that strong federal and state policy measures are needed to ensure that all workers have the right to strike. Congress should pass the Protecting the Right to Organize (PRO) Act, which would strengthen workers’ ability to strike by prohibiting employers from permanently replacing striking workers. Congress should also extend a fully protected right to strike to railway, airline, public-sector, agricultural, and domestic workers.
“Strikes are a powerful tool that provides leverage to workers to bargain for better working conditions and fair pay. But going on strike can put workers in a risky position. Federal and state policy reforms are needed to ensure that all workers have the right to form unions and engage in collective actions—including strikes. These measures can help reverse the erosion of workers’ rights and rebuild a prosperous middle class in the United States,” said Celine McNicholas, EPI Director of Policy and Government Affairs/General Counsel and co-author of the report.