Another Strike from Unionized Employees in a Declining Industry

“You can deal with the name calling, you can deal with the picket lines, but it’s crazy when they’re an inch from your face screaming that they’re going to kill you and your family.”

Verizon manager, who refused to provide his name in fear of retaliation

According to Megan McArdle at the Atlantic Monthly, some 45,000 members of the Communications Workers of America (CWA) are striking against Verizon. So far, the CWA has allegedly engaged in behavior that would be the envy of a third world revolutionary. The FBI is currently investigating some 90 allegations of sabotage on Verizon landlines since the strike began on August 7, 2011. Two of these lines served a hospital and a police station.

One Verizon manager believes demonstrators intentionally dented his pickup truck. Several non-union employees “allege they have been tailed by bands of protestors and run off the road.” When another manager attempted to deliver union members their last paychecks, they swarmed his vehicle screaming profanities and insults.

What is odd about this whole business is why the union is choosing now to strike. The catalyst was clearly the inability of both sides to come to an agreement on a union contract. In typical “class warrior” fashion, union thugs are screaming foul (and cutting life critical landlines) in response to Verizon’s fat profit margins.

While it is true that Verizon has a very profitable business, the company generates the lion’s share of its profits from the wireless segment, which is staffed by non-union employees. The landline portion of the business is in secular decline as households switch from landline phone service to cell phones. As an example, my family has not had regular phone service since 2003.

Thus, while the company’s profits “have improved since 2008, the striking workers aren’t generating those profits.” In essence, Verizon’s wireline business is a cost center.

According to Richard A. Epstein at Stanford’s Hoover Institution, the 7 percent of the labor force that is unionized “generates 95 percent of the social disruption to labor markets.”

What’s worse, these particular demonstrators appear to be especially tone-deaf: 1) unemployment is at 9.1%, 2) Verizon’s landline business is unprofitable, and 3) the union is using tactics reminiscent of the Al-Mahdi Army.

The bottom line is that Verizon’s union workers are simply not worth the price they are demanding.

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About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, Finance and Economics, Media, Policy, Politics, Socialism, Unions and tagged , , , , , , , , , , . Bookmark the permalink.

16 Responses to Another Strike from Unionized Employees in a Declining Industry

  1. Scott Erb says:

    In principle am a union supporter, but this case reminds me of P9 striking against Hormel back in the 80s. When “worker rage” overtakes rationality, it leads to self-defeating behaviors. My model would be unions in Scandinavia and Germany that see their relationship with employers as a partnership — no rational union would want to undercut their business or see management as an enemy. No rational union would embrace class warfare. Arguably American businesses play the game more roughly — they see unions as bad and want to defeat them. If the game gets played that way, employers win because they ultimately have the power. Therefore it’s in the interest of unions to reject that kind of game and work towards partnership. At least at Verizon, they’re not doing that.

    • We did a case at business school on that Hormel strike. I was “fortunate” enough to represent management. At some point, I started yelling at a classmate representing the unions because I caught him in a lie. Let’s just say, I am not the most “cordial” negotiator. 😉

      I agree, though, that modern unions need to recalibrate their thinking and tactics in an era of austerity.

  2. This is one where I agree with you. I don’t particularly like Verizon, but their union members anre idiots who don’t understand how great they’ve got it compared with lots of other workers (and people not working.)

  3. Tj says:

    You’re an idiot! To write an article using nothing but rhetoric and one-sided information is socially unresponsible. After reading several of your articles, i have come to the conclusion that you tend to take one side and proceed to talk in circles. Also, if someone has an opinion not in line with yours, you trash them. It would better serve you and your career, if accurate, up-to-date information was used from both sides of the fence. Give the general populous the chance to decipher, understand, and make an educated decision for themselves. That is the problem with people like you, it’s your way – or no way. Yv
    Have a nice day!

    • Aside from rambling ad hominem, what is your point? You make an assertion, yet fail to back it up with evidence to support your point. What am I missing here?

    • Rick the Right-Winger says:

      TJ is obviously a thug who supports union thugs and their union thug tactics. Heck, he’s probably a goose-stepping Unionista himself (I don’t know – is Chuck E. Cheese unionized?) Didn’t we just see you on video at the Raiders-49’ers game, too?

      Your problem isn’t the “your way” people, Your problem is that your diaper is full. Get your mom to change it, put the pacifier back in your mouth, and shut the hell up while the adults are talking, idiot.

      • Tj says:

        Just for the record…… i look at both sides. If the union is wrong, i tell them…. if the corporation is wrong, i tell them! Very simple concept to understand. And yes, there is still a need for unions in this world. Why, because of corporate greed. Unions were formed out of this, and will continue to be needed as long as it remains present. As for the “thugs” comment, if you don’t think that both sides “play the game”, you’re sadly mistaken. Grow Up!

        • Rick the Right-Winger says:

          “If the union is wrong, i tell them…. if the corporation is wrong, i tell them!”
          So you’re the authority on right/wrong, are ya? Without any data to back it up? 1. How do you manage that, and 2. who actually listens to you – since you obviously don’t think?

          And as for the thugs comment, thanks for proving my point by not denying that you support it, and now show me where Verizon execs or any corporate execs are standing there physically threatening their employees.Show me where they’re screaming in employees’ faces, or where they’re out there cutting lines to hospitals, or worse, actually harming fellow employees like your other pals do in the name of “anti corporate greed”.

          And what’s with that excuse, anyways? “Corporate Greed!” “They do it, too!”? That’s your defense of thug activity? That’s not only a childish defense, but also a dumbass reason to sympathize and support a bunch of losers. Be sure to let me know how far that attitude gets you along your lifelong road to nowhere, idiot.

  4. Xerik says:

    Unions used to be a great thing and were something that was for the safety and benefit of the employee and helped a employee keep their job and in most cases make it better and safer for both sides.

    That was during my grandfathers time. He told me now when he looks at modern unions all he sees is greed and corruption where a union while go on strike at the most vulnerable time.

    I have a friend whom is union. Great pay and benefits heck if they go on strike he still gets paid for being on strike. To me that isn’t protecting any body but yourself at that time. Also I have never seen any reason why I have to pay some one to keep my job and to work for some one??? That to me had never made sense.

  5. Tj says:

    Well it looks like, and correct me if I’m wrong, that none of the responders have ever been a member of a union, nor worked for a multibillion dollar company that treats you like a number! I’ve worked as a manager and a worker, both union and non-union.

    Read: “Third World America” by Arianna Huffington… it may just give you a little insight to what is happening to the middle class. When you’re done, let’s have this discussion again.

    I love to debate!!!!!

    • Arrgh!! I thought Third World America was an article I could read in about 5 minutes. I will add it to my reading queue. Thanks for the recommendation!

      You are probably right, I haven’t seen many union folks visiting this site (at least none who’ve admitted it until now). My father visits the site from time to time, and he was in a teacher’s union. That said, his views are similar to mine on that account.

      Anyway, I look forward to continuing the discussion (and debate ;-))

      • Tj says:

        Another heads up….. Here’s another example that is about to happen, showing corporate greed! The contract for the International Operating Engineers Union, specifically dealing with the H.O. Penn Corp, is coming to and end soon. The corp., recently increased the billing labor rate 5%, and is now looking to for the workers to give back 8% of their pay. With the givebacks combined together, it comes to more like 18%. Also, the company is looking to take away 3 holidays.
        There’s more on top of that!

        This is todays todays business trend! Kick the little guy on the bottom while he’s down. Sad, so sad……

        This is just another example of how corporate greed is spiraling out of control. And this is the trend

        • TJ,

          It all depends on the health of the company. For instance, if the company normally issues 10 contracts a year for $100 a contract, but it could only win 5 contracts this year at $105 a contract, the company would still need to fill a $375 hole, even after increasing its labor rate by 5%. therefore it would have to cut more costs just to break even – hence the union concessions.

          Therefore, I imagine there is something more to the story. If corporations cannot be profitable, they cannot survive. I wouldn’t be surprised if this was what is happening at that company. No one has any interest in kicking a man when he is down.

        • cougar says:

          We (h.o.penn) have been out for 6 weeks now, no end in sight. Where is our News coverage?

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