Session 5
— Economic Analysis of Unions
Case Study 5.5e_01 "Factors That Determine a Strike's Success or Failure"
Directions: Complete the following case study and record your answers on a separate sheet of paper.
Topic: How government, media and public opinion determine a strike's success or failure.
Objective: To examine how unions use strikes to achieve their goals and to understand how a successful strike must be supported by the government, media and public opinion.
Unions use strikes to change the labor policies within businesses. When a strike occurs, the union workers walk off their jobs, effectively shutting down the business. Without workers the business cannot function, and the management is forced to negotiate a settlement with the striking workers. In the past, workers would strike to gain basic rights. Early unions went on strike to gain better wages or to end unfair business policies. The number of labor laws in the United States can be attributed to early union activism.
Some strikes are successful, while others are "broken," or fail. When a strike is "broken," the workers' demands are not met. They must either return to work or else lose their jobs. What makes one strike a success and another a failure? This question can be answered by comparing two strikes: the air traffic controllers' strike in 1981 and the UPS strike of 1998.
CS Question 1: How does a strike force a business owner to negotiate with his or her workers?
On August 17, 1981, over 85 percent of 17,500 air traffic controllers went on strike. They wanted improved working conditions and better wages. President Ronald Reagan immediately ordered the air traffic controllers back to work. He quoted a 1947 law that prohibited government employees from striking. President Reagan argued that the strike was illegal and a violation of the oath that air traffic controllers, as federal employees, had signed when they were hired. He stated that if the air traffic controllers did not return to work, the government would assume that they had quit. By the end of that week, over 5,000 members of the striking Professional Air Traffic Controllers Organization (PATCO) received dismissal notices from the Federal Aviation Administration (FAA).
CS Question 2: Why was it illegal for the air traffic controllers to strike?
The strike caused a massive disruption of the air traffic system. However, the government was able to keep control of the skies. Supervisors filled the positions of striking workers, and military controllers assisted the supervisors. Union authorities referred to these temporary workers as scab workers. Surprisingly, the temporary workers were able to handle most of the workload left behind by those on strike. Their success in covering the work played a large part in breaking the strike. Union actions also contributed to the strike's failure. The PATCO leaders were unable to properly explain their goals and reasons for the strike to the public. The public simply did not understand the issues that the union felt were important. Additionally, President Reagan held many press conferences and was able to shift public sentiment away from the air traffic controllers. The strike failed to gain support. No other unions joined the strike, and no national government offices offered support. In the end, PATCO members were unable to defend themselves against the government, the courts, law enforcement and, most importantly, the public.
CS Question 3: What were the reasons that PATCO's strike failed?
In 1997, the workers at United Parcel Service (UPS) went on strike. They were members of the Teamsters Union, a powerful union in many industries. The workers were very vocal about their demands. They wanted UPS to change policies regarding part-time workers, pensions and work being subcontracted to nonunion workers. The strike paralyzed UPS for weeks, almost bringing it to a complete standstill. Since competing businesses like Federal Express were able to take on some of the delivery load, UPS suffered. Small mail-order businesses had depended heavily on UPS to deliver their goods to consumers. UPS management felt the pressure as customers started turning to other delivery businesses. As the strike continued, UPS lost more market share to its competitors. The government did not intervene in the conflict, and the courts deemed the strike to be lawful. Public sentiment was against UPS management. In general, the public believed that UPS was neglecting its full-time employees. It became apparent that UPS had to settle with the workers or shut down operations permanently. Even after the strike, UPS suffered a loss of business since many customers continued to use the service of the competitors.
CS Question 4: What were the reasons that the UPS strike succeeded?
Further Thought: