Economic Update with Richard D. Wolff

Episode: Unions and Strikes are the People's Power

Date: September 20, 2023

Episode Overview

In this episode, Richard D. Wolff explores the renewed momentum of unions and strikes across the United States and internationally, highlighting their essential role in advocating for workers’ rights. He also delves into the broader debate between reform and revolution, questioning whether mere incremental changes can ever address the systemic problems rooted in capitalism. Through stories of union actions at prestigious universities, international settlements, and sectors like logistics and hospitality, Wolff spotlights the growing worker unrest and what it signals for the American economy and society.

Key Discussion Points & Insights

1. The Resurgence of Unions and Worker Organizing (00:47–17:48)

• Graduate Student Workers Unionizing (01:38–06:00)

  • Stanford University:
    • Overwhelming vote to unionize (94% in favor, 1,639 to 108)
    • Joined the United Electrical Workers Union
    • Reflects broader trend at other elite universities such as the University of Chicago, USC, Yale, and MIT over the prior two years
    • Significance: This shows highly educated young people recognize themselves as workers and are demanding collective power.
    • Quote: "These students are not afraid or shy of understanding that, yes, they are students, but above all, they are workers. And that's how Stanford treats them." — Richard Wolff (03:51)
    • As more young people join unions, they may transform union politics, pushing it “in a direction very different from the right wing politics that gets so much attention.” (06:00)

• UPS Workers Striking for Fair Share of Profits (06:00–09:21)

  • Nearly 350,000 UPS employees voted 97% in favor of striking if demands for wage increases were unmet.
  • Workers highlighted their role during the pandemic (where profits grew by 70% between 2019–2022), but didn't share in the company’s success.
  • CEO Carol Tomé’s $19 million salary in 2022 contrasted with average workers’ pay: “The CEO at UPS… is paid more in a day than the average UPS worker gets in a year.” (08:12)
  • Key theme: Profits are withheld from workers unless threatened by collective action or strikes.

• German Public Employees’ Successful Strike (09:21–12:28)

  • 2.5 million German public employees, represented by the union Ver.di, secured a favorable contract after a series of strikes.
  • Settlement: €3,500 inflation bonus, €200 ($240) monthly raise, and a 5.5% increase—better than most U.S. public sector contracts.
  • Public employees in Germany have the legal right to strike—unlike their U.S. counterparts, enabling real leverage.
  • Quote: “Without that, this kind of a settlement would never have been available to the 2 1/2 million German public employees…” (12:21)

• Hotel Workers’ Strike in Los Angeles (12:28–16:28)

  • LA/Long Beach hotel workers, already unionized (UNITE HERE), struck for a major pay increase.
  • Current average wage: $20–$28/hour, far below what’s needed to live locally (est. $40/hour for a two-bedroom apartment).
  • Many commute long distances due to unaffordable housing, incurring extra costs and time.
  • Workers demand a $5/hour immediate increase plus additional $3/hour raises over coming years.
  • Despite claims hotels can't afford it, LA’s largest hotel (Westin Bonaventure) already agreed.
  • Quote: “Working people have had it. They have been abused. They have been unfairly treated. They have been denied a participation in the growing productivity of labor…They got awards, they got words, but they didn’t get the money that they need.” (16:06)
  • Broader context: Only 6% of private sector American workers are unionized. “The way you get the American dream is to learn that you need a union if you’re working. And without one, you are not going to make it if your goal is to live the kind of life you, your family and your community deserve.” (17:35)

2. Examining the Myth of Free Markets (18:05–28:15)

• Markets as a Supposed Magic Solution (18:20–18:45)
  • Wolff critiques the notion that markets offer win-win outcomes, arguing it was “never true.”
• Historical Example – Rationing During WWII (18:44–23:15)
  • In the 1940s, FDR set aside markets for essential goods to prevent the rich from pricing out everyone else. Goods like milk were distributed by ration cards, not market exchange, to ensure social cohesion during war.
  • Quote: “Markets favor rich people over poor and middle income people. And to have the society split that way would be very bad for the war effort.” (21:08)
• Modern Example – Housing and Market Failures (23:15–28:12)
  • Allowing markets to set housing prices leads to gentrification, exclusion, and economic segregation.
  • Rich people bid up prices wherever they move, pushing out middle and low-income residents. This process is self-perpetuating and creates neighborhoods stratified by wealth, often reflected in race and age disparities.
  • Quote: “The market allocates whatever is scarce to those with the most money... Letting the market do its work produces a very bad outcome when it comes to housing.” (25:34)
  • Wolff calls for rethinking housing allocation and greater egalitarianism to avoid these socially destructive effects.

3. The Reform vs. Revolution Debate (28:15–32:05)

• Defining Reform and Revolution (28:24–29:00)
  • Reform: Modifying a system via laws, new regulations, leadership changes—without changing the system’s core.
  • Revolution: Overhauling the system itself, fundamentally altering power and organizational structures.
• Shortcomings of Reform (29:00–30:50)
  • Past reforms in the 1930s (Bank Act, Social Security, unemployment insurance) helped, but didn’t change the core employer-employee power dynamic.
  • Those with power and profits can undo past reforms (as seen in post-1930s America).
• Call for Systemic Change (30:50–32:05)
  • To truly solve economic problems, Wolff advocates democratizing enterprises and altering the underlying structure of capitalism, not just making cosmetic reforms.
  • Quote: “If you only fix it, but you leave it that way, you create the incentive for the people at the top...to undo the reforms.” (30:13)
  • Closing Call: “Are we going to make reforms again, or are we going to finally recognize we have to do something about that basic core of the system, the employer employee relationship? That's got to change. We've got to democratize the enterprise, because otherwise, we're not going to fix the system that ails us.” (31:28)

Memorable Quotes (with Timestamps)

• “These students are not afraid or shy of understanding that, yes, they are students, but above all, they are workers.” (03:51) — Richard Wolff
• “The CEO at UPS… is paid more in a day than the average UPS worker gets in a year.” (08:12)
• “Without [the strike], this kind of a settlement would never have been available to the 2 1/2 million German public employees...” (12:21)
• “Working people have had it. They have been abused. They have been unfairly treated. They have been denied a participation in the growing productivity of labor… They got awards, they got words, but they didn’t get the money that they need.” (16:06)
• “Markets favor rich people over poor and middle income people. And to have the society split that way would be very bad for the war effort.” (21:08)
• “The market allocates whatever is scarce to those with the most money... Letting the market do its work produces a very bad outcome when it comes to housing.” (25:34)
• “If you only fix it, but you leave it that way, you create the incentive for the people at the top...to undo the reforms.” (30:13)
• “We’ve got to democratize the enterprise, because otherwise, we’re not going to fix the system that ails us.” (31:36)

Timestamps for Important Segments

• 00:47–17:48 – Union resurgence: graduate students, UPS, German public workers, and LA hotel strikes
• 18:05–28:12 – The myth of free markets: WWII rationing and housing today
• 28:15–32:05 – Reform vs. revolution: historic reforms and the case for deeper change

Summary Takeaways

Richard D. Wolff’s episode makes a compelling case that workers’ renewed embrace of unions and collective action signals a groundswell of discontent with the status quo, driven by inequality, wage stagnation, and exclusion from the fruits of economic growth. Strikes in the U.S. and abroad are not only justified but necessary. He also critiques the myth of the market as inherently positive, showing how, whether in wartime rationing or the crisis in housing, markets by themselves deepen inequality. Ultimately, Wolff challenges listeners to think beyond piecemeal reform, questioning whether only systemic transformation—democratizing workplaces and fundamentally restructuring the economy—can address the root causes of our society’s recurring problems.