by Greg Valliere, AGF Management Ltd.
AFTER YEARS OF LOSING CLOUT — AND MEMBERS — organized labor is flexing its muscles. The worker shortage has given unions some clout, and the result is a looming wave of strikes that could give pro-labor President Joe Biden another headache, as still another inflationary hot spot emerges.
WORKERS SOON MAY HIT THE PICKET LINES at John Deere, Kaiser Permanente, and even on Hollywood film lots. According to a piece this morning in The Hill.com, thousands are already on strike, including 2,000 New York hospital workers, 700 Massachusetts nurses and 1,400 Kellogg plant workers in Michigan, Nebraska, Pennsylvania and Tennessee.
THE POTENTIAL STRIKE TO WATCH is at Kaiser Permanente, where 38,000 workers, mostly overworked nurses, are demanding 4% annual pay increases; the company is offering 1%. A similar gap is plaguing John Deere, where workers want an immediate 5% to 6% wage hike. And TV shows and movies may be shut down as 60,000 crew workers threaten to go on strike early next week.
WORKERS HAVE LEVERAGE, knowing that if there are walkouts, employers will struggle to find replacements because of the nationwide labor shortage, The Hill concludes. The U.S. had 10.4 million unfilled job openings as of August; as we noted yesterday in our piece on workers who are quitting.
IN A RECENT INTERVIEW with The Hill, AFL-CIO President Liz Shuler said workers are “fed up” with harsh working conditions and stagnant pay amid a pandemic that has worsened income inequality, leading them to demand better contracts.
THE LABOR RALLYING CRY: “This is the capitalist system that has driven us to the brink,” she added. “Inequality is just getting worse and worse.” Prepare to hear more rhetoric like this; organized labor, down to nearly 10% of the workforce, has a rallying cry.
EVERYONE WANTS THEIRS: The scramble for better compensation and more federal benefits is likely to increase, as workers grapple with higher energy and food prices; real hourly earnings have decreased in recent months. We have consistently warned that the most serious inflation threat is rising labor costs, which are not “transitory.”
THE FEDERAL RESERVE SHOULD BAN THE WORD “TRANSITORY” — it certainly doesn’t apply to labor, because salary hikes and sign-up bonuses will not be reversed. Maybe lumber or copper or gasoline prices can be reversed, but wage hikes will not be lowered; they’re on the rise, as the looming strikes will show.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.