For all intents and purposes, the union movement began in the United States back in the early 20th century with a host of strikes leading up to the start of the “Roaring Twenties.”
Strikes in the coal industry mostly lead the way at that time with the mines being shut down due to labor unrest in 1900-1902, then in 1913 (the Coalfield Wars in Colorado) and then again with the Coal Strike of 1919. In each of these instances – and in the countless other labor disputes that continued until the start of World War II – workers protested conditions around health, safety, and wages—which were meager by any standard of the day. Against that backdrop, workers banded together and rebelled against their employers, often being penalized by the courts for these “illegal actions.” But class divisions, exacerbated by the industrial revolution, made unions a viable – and favored – vehicle for change. Many other industries unionized as a result.
In those days, the employer class owned approximately 85 percent of the nation’s wealth, while 40 percent of the working class owned no wealth at all. It was a reality that needed to be addressed and, over the next 50 years, organized labor addressed those needs—largely winning the support of the American public.
Today however, we see a different phenomenon playing out. As a result of the National Labor Relations Act, the Fair Labor Standards Act and so many other laws at both the federal and state level, workplaces are safer and employees enjoy mandated minimum wages, paid sick leave, vacation and overtime pay. To ensure these standards are met, the federal government and every individual state has a department of labor which enforces these dictates on employers. Suffice it to say, the “sweat shops” of the early 20th century that served as a catalyst for early union organizing no longer exist.
Although still viewed through a generally favorable lens by the American public, only 6.1 percent of private sector employees belonged to a union in 2021, compared to 34 percent of public sector workers.
That said, President Biden promised he would be the most union-friendly president to ever sit in the Oval Office and that is one promise he is absolutely keeping. With the President’s thumb on the scale, workers in a number of historically low-wage (and low-skill) occupations have taken the unionization effort to new levels. Case in point: Starbucks.
Under former CEO Kevin Johnson, Starbucks management seemingly took the threat of unionization too lightly and, once focused on it, they were overzealous in their efforts to squash the union in its infancy. Responding as the 21st century equivalent of the railroad robber barons of the 1800s and the coal mine owners of the early 1900s, they lost sight of what keeps employees happy and loyal and instead sought to lord over the employees with a “we know best” approach to employee relations. In response, as I write this article, over 225 individual Starbucks stores have petitioned for union representation.
Trying to put the genie back in that bottle, founder and interim CEO Howard Schultz (who returned from the sidelines to deal with this major issue) has sweetened the pot for Starbucks’ baristas in non-union stores by allotting up to $1 billion in new employee perks—promising a national minimum wage for workers of $15 an hour, plus training and educational benefits, as well as technology upgrades aimed at benefiting workers.
It is too early to know whether Schultz’s efforts will make any difference. Let’s remember that unions have organized just a tiny fraction of Starbucks more than 15,000 U.S. stores—not exactly a giant blip on the radar screen. But the drama that is playing out at Starbucks highlights a teachable moment for Dunkin’ franchise owners: It is critical that you keep your employees happy and loyal to your company.
It is widely believed that organizing individual franchised businesses, rather than corporately- owned outlets, would be an exceedingly difficult challenge for any union, but with an aggressive National Labor Relations Board following the lead of the “most union-friendly president to ever sit in the Oval Office,” stranger things have happened.
The labor shortage has greatly empowered employees across the economic spectrum, and has been especially obvious in the restaurant and hospitality industries. That underscores the importance of maintaining good relations with your workers, providing them a way to have their voices heard, and demonstrating a willingness to implement change if it is in your business’ best interest. Retaining your employees and fostering a sense of loyalty is not just a winning strategy, it is a cost-saver. Turnover is expensive.
With inflation at a 40-year high – and growing – an ounce of prevention may cost a lot more than it used to, but it’s still far less expensive than that pound of cure.