The lasting impact of US strikes, labor movements in 2023 - Yahoo Finance

Union workers won big in 2023 as the country's labor movement gained momentum. Actors and writers in Hollywood successfully negotiated new contracts while UAW workers reached unprecedented deals with Ford, General Motors and Stellantis,

Yahoo Finance Reporters Alexandra Canal and Pras Subramanian discussed the impact of the strikes on the entertainment and automotive industries as well as the broader economy.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- We are counting down the top 10 stories of 2023 here at Yahoo Finance. And coming in at number four is union strikes.

[DRUM PLAYING]

SHAWN FAIN: We're not asking to be millionaires. We're not asking to join the billionaire class. We're asking for our fair share of the fruits of our labor.

- Well, the prolonged actors and writers strike continues to shake up the box office.

KEVIN KLOWDEN: It was affecting restaurants and catering companies, it was affecting trucking companies, it was affecting welders, it was affecting construction people, it was affecting dry cleaners.

- Members of the United Auto Workers overwhelmingly voted to authorize possible strikes against the nation's three major auto manufacturers.

- You're looking at the UAW president right now essentially wearing black and white camo.

- This sounds like a UAW president that is in his own type of wartime mode.

- From the writers and actors in Hollywood to the factory workers in Detroit, union members across the country taking to the picket lines to advocate for higher pay and better benefits. Here to break it all down, the impact and the outcomes of these strikes are our very own Alexandra Canal and Pras Subramanian, the two perfect people to talk about the union strikes and what we have seen play out over the last 12 months.

But Ali, let me start with you. When it comes to the Hollywood strikes that started with the Writers Guild of America back in May, obviously lasted for longer than maybe some had initially anticipated, what was the outcome and what did we see?

ALEXANDRA CANAL: Well, this was a historic strike considering we saw the actors join writers on the picket lines in July. And although these are two different guilds with two different ones, the thread line was similar in terms of what they were fighting for. Better protections surrounding the role of artificial intelligence. Better pay, streaming residuals as more TV shows and movies go from cable to those streaming platforms.

And these strikes, they come after the contracts have expired. And every three years, you get a new contract. What was three years ago? It was 2020, it was the pandemic. Hollywood was just trying to keep the lights on. So there was this expectation that the guilds were going to really come into 2023 ready to fight with these studios.

In terms of what they were able to get, the writers strike lasted 118 days. They were able to secure increased regulations surrounding AI. Minimum staffing requirements, this was a big one. They wanted a certain number of writers in the room, especially as streaming has allowed for more content. And they also saw viewership-based streaming bonuses and more data transparency, which I think is something that we're going to see across the industry.

And then for the actors, their contract was valued at over $1 billion. Also included above pattern minimum wage increases. For AI members we will see quote, "informed consent and fair compensation for the creation and use of digital replicas of members." And then for the first time, there will be a roughly $40 million per year streaming residual bonus. So these were pretty sizable wins here when you think about these guilds and what they were ultimately fighting for here.

- And Pras, I mean, we also tracked this UAW strike. Shawn Fain essentially became a household name. I expected him to be a TikTok influencer after a while.

- There were rap videos.

- There were rap videos kicking off these press conferences. Wasn't even a press conferences, it was really just a briefing of what was going on. Did we encapsulate it well enough?

PRAS SUBRAMANIAN: So Brad, the thing was six months ago, no one knew who he was. He was the X factor in my opinion. People were saying, this guy came out of nowhere. He was the long time member but he was never in leadership really. He won by a razor slim margin. And all of a sudden, I heard rumblings in the summer. Car companies or execs were kind of worried. They didn't know what to expect. |

And they had every right to be afraid because what we saw was these unprecedented strategy of stand up strikes starting in mid-September, right? Caught everyone off guard. Instead of just striking one auto plant and then or one automaker then making a pattern agreement and going to other guys, they struck all three. So there was a little bit of shock there.

I think one of the biggest things we have the timeline here is when Biden walked the line about two weeks into the strike. That was a huge turning point. A few weeks later, we had Ford to put out an actual real offer that the union entertained. Shortly thereafter, you had a preliminary agreement, and then you had the different, all the big three getting their workers to agree to the deal. But there was a hiccup with GM, of course, because of the fact that there was older workers that weren't necessarily happy with that deal. And the end of the day, it all went through. And now we have a deal, and workers are back.

- Pras, what do you think, though this tells us about some of this momentum carrying over? Because this could almost just be the start when we take a look at the auto sector here. But the fact that they were so successful, the impact that is going to have on these companies and what it means for maybe some of those other automakers that have yet to be or have not yet been the target of the unions.

PRAS SUBRAMANIAN: I mean, within a few weeks of that deal being ratified by the membership you had Toyota, Honda, I believe Hyundai, all giving raises to their US workers who are all non-union. I spoke to labor strategists about that and it's called the union substitution effect where they're like hey, we'll pay you enough to just not unionize. Just take it. But they wouldn't have necessarily gotten those hikes if not for what happened in the summer with the UAW.

- So what economic impact did these strikes have on their industries as well as the broader economy here?

ALEXANDRA CANAL: We found out from the October jobs report that all in all this year, the UAW strikes, the Hollywood strikes led to a loss of 75,000 jobs. Now, we saw that tick up again in the November jobs report. And then if you think about specifically to Hollywood, the cost of the LA economy, that estimate has been around $5 billion primarily due to lost wages. And then you also had studios reshuffling their release schedules for the box office. The "Dune" sequel, that was a big movie that was supposed to debut in November, pushed into 2024.

Luckily, with "Barbenheimer" and some of the other momentum, with the Taylor Swift movie we got this summer, I think that helped lift those box office dollars a little bit. But it certainly wasn't an easy thing. Hollywood was completely shut down. You heard from all these studio executives how it was going to hit their bottom line the longer it continued.

On a positive, you saw free cash flow go up. So I think coming next year, you're going to see those comps be pretty tough because no one was spending money on creating new shows. Now, I think you're going to slowly see production ramp back up again.

- Absolutely. Alexandra Canal, Pras Subramanian, thanks so much for tracking all of these strikes as you've written about them at length over the course of the year and then helping encapsulate it here on the desk. We appreciate it.

ALEXANDRA CANAL: Thank you.

PRAS SUBRAMANIAN: Thank you.

- Well, it wasn't just Hollywood and Detroit who were on strike this year. We saw UPS employees, airline staff, health care workers all at the negotiating table. And while some of those deals are shored up, there are lingering disputes on the table as well as new ones on the horizon for 2024.

For one, Starbucks in a reversal says it will restart bargaining with its union and reach an agreement next year. And then we have the UAW perhaps, perhaps turning it's sights to Tesla. That's not all. Contracts are up in 2024 for the US postal workers, Hollywood crew members, and then East Coast dock workers. So still a lot of collective bargaining, labor negotiations that could perspire in 2024.

- Yeah, and I think a lot of this also ties back to the administration, what we've seen from the White House. Like Pras just mentioned, the fact that when President Biden came and made a few comments there kind of changed the tide to really gain some of that momentum here for the union workers. The Biden administration has been referred to as one of the friendliest presidents to the union here in quite some time. So we are seeing this momentum pick up.

It has certainly been one of the biggest stories within business news over the last year, has touched a number of industries when you take into account the airlines, retail, consumer discretionary, autos, entertainment. And you've got to think that some of this momentum is going to carry over into 2024, especially as we look ahead to the election year, what exactly that means for some of these types of movements.

So a number of companies are still going to be dealing with what many of these workers say they have the upper hand with now when it comes to pay, when it comes to better benefits. And they're more confident in getting those demands because of how exactly the autoworkers strike played out and the strike that we saw at Hollywood and Hollywood.

- And it's a question, to what extent does some of that negotiation also lead to or result in a pass through of some of those costs to consumers? Which is a larger thing to continue to track going forward.

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