The ongoing strike by nearly 40,000 Verizon workers—the largest work stoppage in the United States in recent years—is a bold fight against the kind of strategies that big corporations have used for decades to maximize profits at the expense of workers.
In the case of Verizon, the tactics the company has already used, and is pushing to intensify in its new contract, include offshoring good jobs to countries such as the Philippines, India and Mexico; outsourcing work domestically to low-wage, non-union contractors; forcibly transferring workers away from their families; and fiercely combating employees trying to organize in the company’s almost entirely non-union wireless side.
For years, it has seemed U.S. workers could do little to contest such treatment, but the Verizon strike suggests that the United States may have reached a turning point.
Like the Verizon strikers, the low-wage workers in the “Fight for $15” movement have also been striking to stand up to assaults from big corporate employers, and they just won historic minimum wage increases in both California and New York.
It appears workers are finally finding a way to counter the corporate strategies that have defined—and held back—the U.S. economy in recent decades.
Corporate strategies that avoid sound investments in their workforce have led to an increasing divergence between the economic experiences and life chances of employers and workers—a divergence that’s become stark at Verizon.
Even as the company has made record profits—$39 billion over the past three years—its workers have had their benefits slashed and seen their numbers fall. And this doesn’t just hurt families; the declining number of skilled technicians could be a contributing factor in the company’s inability to keep the commitments to expanding its profitable FiOS business.
The company’s claims that market forces are necessitating these changes are simply unfounded and are arguably misguided business decisions.
The growing gap between company profits and employee compensation reflects the shifting balance of power in employment relations. In the 30 years after World War II, when unions had a significant presence in the workplace, productivity and wages grew in tandem, creating a strong middle class in the United States.
But four decades ago, that employment relationship began to be restructured. It was prompted by a confluence of events, including globalization and technological change. And those forces were exacerbated by political decisions that led to the deregulation of markets, the growing financialization of the economy and employer assaults on unions, especially in the private sector.
In the contentious negotiations that led up to the strike, Verizon executives justified their actions, saying they reflect the inexorable outcomes of technological change (in this case, from landlines toward wireless cellphones) and of market forces over which they have little control.
But their claims run counter to the considerable evidence that companies using similar technologies and operating in similar markets have considerable latitude in how they organize work.
For instance, Verizon’s union workers install the company’s state-of-the-art FiOS high-speed broadband service. But instead of investing fully in that new technology, Verizon has been remarkably slow to roll it out. Entire cities, including Baltimore, have been bypassed, and even in New York City and Philadelphia many residents still have no access to the service.
Meanwhile, there is a management bias against unions in Verizon’s wireless side that has blocked workers from organizing. Currently, the average customer service representative on the wireline side makes $69,000 a year, while a wireless representative doing much the same work makes $45,000 a year.
In 2014, workers in Verizon Wireless retail stores in New York and Massachusetts sought to close that gap and voted to form a union. But two years later the company still refuses to reach a fair first contract. That is one of the key disputes in this strike.
The actions by the Verizon workers show that it is possible to fight back against the power of employers to dictate the terms of the employment relationship. They remind us that the supremacy of big corporations, like technological changes and market forces, are not inevitable but reflect political and managerial choices.
A shift in the balance of power between employers and workers has occurred before in U.S. history, most notably when the reactions to the first Gilded Age helped to create the conditions that led eventually to the New Deal and the restoration of greater equality in the three decades after World War II.
These events taught us about the potential of concerted political action to change course. Then, as now, political will—coupled with worker action—offers the promise of a middle-class revival that this country needs.
Arne L. Kalleberg is the Kenan distinguished professor of sociology at the University of North Carolina at Chapel Hill. He is editor of Social Forces: An International Journal of Social Research.