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For many corporate leaders, even mentioning the word “union” can spark a negative reaction. But it may be time for that to change. The recent rise of labor organizing across a wide range of industries speaks to a number of trends that aren’t slowing down.
COVID-19 shifted some power away from companies. Office workers are no longer constrained by location and therefore open to new opportunities nationally and maybe even globally in the job market. This seems to have increased competition for employers while making job hunting slightly easier for people due to the decreased friction of job switching.
“The Great Resignation” has also taken hold in hourly jobs, including those in warehouses, factories, retail, or healthcare that require an in-person presence. These workers are a big part of the organized labor movement, and always have been.
Labor historians told Fortune that pro-union sentiment has ticked up steadily since the 2007 market crash before another push resulting from the pandemic.
Since the end of World War II, decades of regression of worker rights, combined with declining wage growth and rising inequality, exponential growth of executive pay and corporate corruption has led to this movement. Gallup says support for unions is at its highest since 1965, with 68% approval in its most recent poll.
It doesn’t look like this upward trajectory is going away. Of those aged 18 to 34 in the Gallup poll, 77% expressed support for unions. Gen-Z workers are at the forefront of organizing efforts at Starbucks, for example, and three-quarters of people who joined a labor union in 2017 were under the age of 35, according to the most recently available data from the Bureau of Labor Statistics.
But it’s not just younger generations that support this movement. Many prominent historical figures were pro-labor, including the civil rights activist that this nation celebrated on Monday.
That’s right, Martin Luther King Jr. supported unions. He delivered a 1961 keynote at the AFL-CIO and spoke out against “right to work” laws which were a response to organized labor. In fact, he was in Memphis supporting a sanitation workers strike before his assassination in 1968.
I wonder why Starbucks, Google, or Amazon, and the many other companies that embrace union suppression tactics, failed to mention this in their MLK Day tweets!
Amazon’s Alexa suggested we ask it to recite a quote from Dr. King. Prime Video offered us a list of content to learn about civil rights history.
Google also suggested using its product to learn about Dr. King.
Starbucks said it was “inspired by MLK” to launch a fundraising initiative for a group of nonprofits.
While all of these companies tried to leverage King’s legacy to promote their brands and products, their actions against labor promote the structural inequality he was fighting against.
In the history of labor in the United States, race has often been used as a wedge to sow division among workers. During Richard Nixon’s presidency, his administration weakened the National Labor Relations Board while using anti-union rhetoric to stoke these racial divisions. Unions represented a threat because of their power to create multiracial progressive coalitions. Since then, presidents on both sides of the aisle have seemingly favored corporate interests over labor, for the most part.
Today, Joe Biden’s NLRB seems to be trying to change that.
So public sentiment is changing and the regulatory environment is evolving. But business leaders still abhor labor unions, using outdated rhetoric to imply that they are worse for workers, worse for the economy, and, depending on your news source, an assault on democracy or a socialist destruction of free market enterprise. They also hire consulting firms that specialize in bending the law without breaking it as they seek to suppress union activity.
In reality, unions are as American as apple pie and the Super Bowl (NFL players are unionized, by the way). There is nothing more capitalist than a group of people banding together to improve their pay and benefits, or as one labor organizer put it, “nothing more intrinsic to capitalism than the right of contract—to link their members to the fortunes of the companies they contract with.”
Isn’t that what corporate boards and leadership teams do every day? What about venture capital and private equity firms—are they not organized to act collectively in their own financial interests? Why don’t workers deserve that same opportunity? More importantly, why do you feel compelled to fight that right if it exists?
If your workers start to organize, don’t use the playbook you would have used in 1995, 2005, or 2015. Support for unions is support for racial justice and equality. A seat at the table is the only way for certain people to assure some form of security in their lives. At the rate people are leaving companies, leaders need to do everything they can to create a better working environment. Unions can easily be part of a healthy solution for this unprecedented retention dilemma.
The business case for suppressing unions is getting worse, and we can expect the public backlash for doing so to only get stronger. It’s time to move on.
In his annual letter to CEOs, BlackRock’s Larry Fink released another treatise on social responsibility, sustainability and how they fit in with today’s definition of capitalism. Fink emphasized that stakeholder capitalism isn’t “woke” politics, but simply good business. As Fortune’s CEO Daily newsletter noted, the approach is currently receiving criticism from both the left and the right. That doesn’t seem like a great place to be.
Business Roundtable Announces 2022 Board of Directors
Chaired by GM’s Mary Barra, the Business Roundtable announced the names of its 25 board members. Barra is joined by the CEOs of Kaiser Permanente, Honeywell, Best Buy, Apple, JP Morgan Chase, Walmart, and others to “promote a thriving U.S. economy and expanded opportunity for all Americans through sound public policy."
What could the McDonald’s board have done differently with Easterbrook?
Harvard Business School professor emeritus James Heskett asks, “did the board act appropriately in firing Steve Easterbrook without cause in the first place?”
Firing Easterbrook with cause for having a consensual relationship with an employee allowed him to walk away with $105 million in stock and options, before it was discovered that he had had numerous inappropriate relationships with employees. The company had the protracted legal battle it was hoping to avoid anyway.
“Executives fired for cause rarely go quietly,” Heskett wrote. “They usually sue to keep the money they received—and they often win. Situations in which a board changes its decision from firing “without cause” to “with cause” are relatively rare. The odds of winning such a case are uncertain. And it would guarantee that the McDonald’s name would be dragged through the media and the court of public opinion again.”
Companies that are following through on DEI promises
Colgate-Palmolive, Lowe’s, Cintas, PVH Corp., Herman Miller, Adobe, and Levi Strauss were among the companies named by consultants from PwC and Randstad for having strong follow-through on diversity, equity, and inclusion.
Disney CEO Bob Chapek on his strategy for 2022
Chapek discusses movie theaters, the metaverse, the streaming wars, and more in what is a very interesting time for his company.
Microsoft-Activision deal could face antitrust scrutiny
David Meyer of Fortune discusses the implications for the gaming and tech markets of the business world’s most recent major acquisition, adding that regulatory scrutiny could be a factor preventing this deal from realizing its potential value.
MORE FROM THE MODERN BOARD
The Modern Board is not just a newsletter, it’s a section of the Fortune site that is producing regular coverage of corporate leadership. Here is some of our latest:
The immense and increasing value of diverse engineering and product teams
How and why workplace tech is becoming more inclusive
Shake Shack’s CEO-chair relationship is a big reason why it survived COVID-19
CMO of Airtable on bringing the customer voice to the board
How to find and hire the best tech talent in 2022
Tech leaders continue to grow their presence on corporate boards
Numbers that matter
People who feel cared for at work are 3.7 times more likely to recommend working at their company, according to the latest data from LinkedIn’s Global Talent Index. The report also found that employees who are happy with their flexibility at work are 2.1 times more likely to recommend working at their company.
In an opinion piece for Fortune, LinkedIn’s chief people officer Teuila Hanson wrote that this underlines the importance of company culture, and emphasizing flexibility and well-being.
“To gain an edge, companies need to abandon outdated workplace constructs and reimagine where, when, and how work gets done, with a focus on people first,” Hanson wrote.
“Culture is not static, and organizations that adjust now will be in a stronger position for what’s next.”
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