MONEY

New Reality: Business Could Face Largest Labor Movement Surge In 75 Years

In today’s economy, frozen by the COVID-19 crisis, it is essential that you mind your business --...

Unemployment Rate Compares To Great Depression: 22 Million Out Of Work

Wiping out a decade of employment gains, more than 22 million Americans have filed for...

In today’s economy, frozen by the COVID-19 crisis, it is essential that you mind your business -- literally. If you take care of your employees, hopefully, they will ultimately take care of you.


Twelve months following Japan's surrender in World War II in August 1945, roughly 6 million workers engaged in rolling strikes throughout the U.S. They hit almost every sector of industry: meat packers, steelworkers, telephone installers, telegraph operators, railroad, and auto assemblers to name a few. Many workers demanded higher pay, better working conditions, and reasonable working hours (i.e., the 40-hour work week), while some went on strike due to massive layoffs.


Fast forward to 2020, and you will find employees protesting for face masks, hand sanitizers, better protective gear, and possibly, paid sick days.


With the coronavirus sweeping the economy from under our feet and with 22 million Americans filing for unemployment, could we be heading into “witnessing the biggest labor movement seen in decades?


Related: Unemployment Rate Compares To Great Depression: 22 Million Out Of Work


Now that we are here, we are faced with the possibility of what will happen next once we beat the coronavirus. “Do companies face a future of vocal workers aiming to rebuild lost decades of wage increases and regrained influence in boardrooms and the halls of power?”


Steve LeVine of Medium addresses these concerns, as some of the country’s top CEOs are nervous -- and they might have good reason to be.


(via Medium): For now at least, some of the country’s most powerful CEOs are clearly nervous. Late last month, Apple, faced with reporters asking about a company decision to furlough hundreds of contract workers without pay, did a quick about-face. Those employees, Apple now said, would receive their hourly wages. A few weeks earlier, after Amazon warehouse workers demanded better benefits during the virus pandemic, that company also reversed course, offering paid sick days and unlimited unpaid time off.


Eventually, the economy will be fully back and operational, but it is uncertain which businesses will be able to survive the economic downturn, and if they do, in what form and capacity.


“I like to believe people will say, ‘We treat these people as disposable, but they are pretty indispensable. Maybe we should do what we can to recognize their contribution,’” says David Autor, a labor economist at MIT and co-director of the school’s Work of the Future Task Force.


Because of public scrutiny, companies tended to try to avoid large-scale layoffs, “because they violated a red line of publicly accepted practice and also could finger the company to blame,” LeVine says.


When it comes to work activism, the current revival of strikes is showing up in unfamiliar places. In 2018, West Virginia teachers went on strike demanding higher pay. On April 6, employees of a Los Angeles McDonald’s walked out of work due to a co-worker being diagnosed positive for the coronavirus. On Staten Island, 26 workers came down with the coronavirus at an Amazon plant and also went on strike. And outside of Chicago, employees of two plants walked out because management failed to notify them immediately that their co-workers had contracted Covid-19.


Hilton Hotels, on the other hand, are trying to stay ahead of employee relations. When the effects of the coronavirus passed through the hospitality industry, Hilton Hotels’ global occupancy fell between “10% and 15%, with 6,100 managed and franchised properties closing doors.”


However, the company stepped up and attempted to take care of its 260,000 displaced employees, not wanting to lose a trained workforce. On March 24, the company loaned them out to businesses that could use the help.


Staff in Hilton’s human relations unit contacted counterparts at Amazon, Albertson’s, CVS, and Walgreens, says Nigel Glennie, vice president of corporate communications at Hilton. An expedited hiring portal was set up, connecting Hilton’s workforce with 28 retailers that were keeping the economy going while others were in a state of limbo.


Instead of massive layoffs and job cuts, Hilton decided to furlough its workers, thus allowing them to collect unemployment checks or work elsewhere. And once the crisis has ended, they can return to Hilton.


“We have a commercial interest in this decision. We know we have well-trained people who we want back,” Glennie says. “We wanted to make sure they were looked after. We want to do the right thing by our people.”


Jeff Lackey, vice president of talent acquisition for CVS Health, says his company was “seeking 50,000 new employees at the time. Albertson’s says it was hiring 30,000. Though neither knows exactly how many of Hilton’s workforce is now working for their respective companies, Lackey says the hiring process was being completed in as little as a single day. “I understand what it’s like to live paycheck to paycheck,” he says.


Then there are some companies that are breaking an unwritten rule of corporate behavior. Take Sephora, the retail beauty chain whose doors are closed, promised to keep everyone, but on March 31, they broke that promise by laying off part-time staff. The news of the release was announced on social media by the employees themselves, causing the beauty chain to receive ugly backlash.


Dan Davenport, president of recruiter Randstad RiseSmart, says, “If you’re making a statement that you’re not going to be laying anyone off, you better be right about that.”


Businesses may not know how they will recover from the setback of the pandemic. As a way of saving their bottom lines, layoffs may be inevitable.


This is now the new norm. As jarring as it is, companies, CEOs, and boards need to prepare for a new post-COVID-19 reality check where the power may well rest in the hands of the employees.