And, the workers of the world are uniting again!

For decades, workers made do with a smaller share of the spoils of capitalism, and the labour unions who represented them shed members and influence. Now employees are finding their collective voice again, and not before time.
Tight job markets and the soaring cost of living are fuelling demands for higher pay and better working conditions on both sides of the Atlantic. Petitions to elect a union and enquiries about joining one are increasing, albeit from historically low levels. Britain may face a summer of labour unrest due to strikes by railway and postal workers, teachers, aviation staff and nurses. In the US, a wave of industrial action at companies such as Deere & Co and Kellogg last year has been followed by grassroots efforts to organise employees at Apple, Amazon.com and Starbucks. Meanwhile, a union representing millions of German manufacturing workers is calling for an up to 8% pay hike, the highest in 13 years.
Although still modest compared with the worker activism of the 1970s, this incipient labour resurgence may worry central bankers as higher pay could cause consumer prices to rise even more. But urging employees to moderate pay demands, as Bank of England Governor Andrew Bailey did in February, is both unfair and unrealistic.
Companies haven’t hesitated to mark up prices to protect their profit margins, which last year reached their highest level since the 1950s. Why should workers — especially those at the lower-end of the income scale — make concessions now they finally have some leverage?
Globalisation is in retreat and the pandemic has slowed international migration, with Brexit throwing up a further barrier. Workers are opting out of exhausting or mind-numbing manual work such as airport baggage handling, which has contributed to the travel chaos we’ve seen.
Barring a deep recession that causes high unemployment and renewed job insecurity, higher wage pressure and tighter corporate profit margins may be here to stay. While tackling excessive inflation will inevitably require sacrifices from better-off workers, a more collaborative approach to labour relations and a more equal division of the profits of capitalism will be necessary too.
Until recently, central banks of the richest countries appeared to have all-but-abolished high inflation: Unemployment was low, corporate profits and the stock market boomed, and consumer prices remained in check. However, our monetary guardians may have overestimated their own brilliance and underplayed the impact of diminished worker bargaining power.
Manufacturing’s decline and outsourcing to low-wage countries, the rise of corporate monopolies and labor-replacing automation all made it harder for workers to win higher pay in recent decades. But shrinking labor union membership, looser worker protections (including inadequate minimum wages) and shareholder pressure to cut labor costs were perhaps even more harmful for workers, as economists Anna Stansbury and Larry Summers have argued.
Today, only 10% of the US workforce belongs to a union — around half the level of four decades ago. In the private sector, the figure is just 6%. In the UK, the proportion of union members has declined to 23%, the lowest on record.
No wonder labour’s share of national income has only recently begun to recover in the US, having fallen sharply since the early 1980s. Many British workers experienced an income squeeze in real terms in the years following the 2008 crisis, including those in the public sector.
And yet Boris Johnson’s Conservative government and the mostly right-wing British tabloid media
are aghast that Margaret Thatcher’s anti-union legacy is being so brazenly challenged. Attempts to characterise striking workers as Marxist dinosaurs holding the British economy to ransom underestimate the level of public sympathy for those on picket lines. The pandemic revealed just how reliant we are on key workers, who often didn’t have the luxury of working at home.
The plainspoken head of the National Union of Rail, Maritime and Transport Workers, Mick Lynch, has proven a particularly effective foil of hapless ministers and television interlocutors. His withering putdowns are widely shared on social media, which must be a first for a union boss.
In the US, public approval of trade unions is the highest since 1965, notwithstanding the recent jailing of former United Auto Workers union leaders for embezzlement.
US president Joe Biden is the most pro-union occupant of the White House in decades and has used appointments and executive orders to advance a labour-friendly agenda, despite Congressional opposition to his Protecting the Right to Organize Act.
Of course, renewing the labour movement won’t happen quickly, and it’s unlikely unions will ever regain the sway they once had over business. More than 40% of UK union members are over the age of 50 and a majority work in the public sector.
But instead of resisting worker efforts to organise, businesses and governments should foster the kind of relations that exists in places like Germany. Though here, too, union membership has declined, worker representatives sit on company boards, giving them a better idea of the competitive and cost pressures that employers face. Chancellor Olaf Scholz will meet next week with labour unions and business leaders to discuss how to avoid a wage-price spiral.
French president Emmanuel Macron hopes to head off perennial worker unrest and “rebuild the social contract between labor and capital” via employee profit-participation plans. Even the most hard-nosed US capitalists have realised they must change: Because KKR & Co granted equity to employees at one of its portfolio companies, they received six-digit payouts when the business was acquired last month.

—Bloomberg

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a
reporter for the Financial Times