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The Retired Investor: Labor Unions Could Be Key to Elections
By Bill Schmick, iBerkshires columnist
04:08PM / Thursday, August 08, 2024

Over the past few years, labor unions have experienced a renaissance in interest and activity. As a result, unions have begun to flex their muscles, and their influence may extend beyond economics into this year's turbulent election politics.
 
In several columns over the past two years, I have explained how unions have made headway in various U.S. economic sectors from autos to Amazon. The UAW's strikes against the Big Three auto companies are what most readers may remember. It ended in victory for the workers and sparked further union outreach to manufacturers in the notoriously anti-union South.
 
In addition, unions in other areas have begun to organize at Amazon Starbucks, and a host of different companies with some success. And yet, all union membership in the United States is still just about 10 percent, which is half the rate in 1983. If you add in workers who have no union affiliation, but whose jobs are covered by a union contract, that percentage jumps to 11.2 percent.
 
In total, we are talking about no more than 16.2 million workers in a total American labor force of 167.58 million people. How could such a paltry number of voters impact who wins the presidency?
 
My father was a machinist, working two jobs in Philadelphia when I grew up. His union job was with SKF, a Swedish ball-bearing company, while his side job was at a non-union shop with higher pay but no benefits. He voted in every election his union bosses dictated and he also worked in his spare time to get out the vote.
 
Back in the day, Democrats took his participation, and the union vote for granted. This Democrat voting bloc carried on through the decades until at least  2012.  During the Barack Obama election, 66 percent of union voters backed him, while only 53 percent of nonunion workers voted Democratic. And then came Donald Trump four years later.
 
In 2016, only 53 percent of union members voted for Hilary Clinton, as an increasing number of working-class Americans, dissatisfied with both their political and economic share of the American pie voted for Trump and populism. That precipitated a great deal of soul-searching among the Democrats. As a result, Democrats over the last two national election cycles are no longer taking the union vote for granted.
 
They have made some headway in regaining their marginal edge with union voters. Joe Biden captured 60 percent of union votes in 2020, which was an improvement over the Clinton numbers, but still below Obama's turnout by 6 points. In the 2022 midterm elections, 63 percent of union members voted for Democrat members of Congress.
 
However, in this age of gathering populism, the union vote can go either way this time around. In the past, union members are more likely to vote than nonunion workers. And while they are only 10 percent of the workforce, in three swing states — Michigan, Nevada, and Pennsylvania — union membership is much higher than the country overall. More than 12 percent of workers in each state belong to a union.
 
Given this backdrop, it is not surprising that for the first time in history, an American president walked the UAW picket line, while Donald Trump countered that move by addressing striking workers as well. It was also no accident that the Teamsters President Sean O'Brien addressed the Republican National Convention, which was an unprecedented action by a union representative.
 
It is no accident that Vice President Kamala Harris and her pick for vice president, Tim Walz, governor of Minnesota,  as well as Donald Trump's running mate, J.D. Vance, made sure to visit Michigan (both a swing as well as a labor state) on Wednesday. Against heavy odds, Vice President Harris selected Governor Walz over Pennsylvania's Gov. Josh Shapiro. Pundits believe that one reason Shapiro did not make the grade was his support for private-school vouchers, which put him at odds with teachers' unions.
 
Both the Democrat and the Republican teams have floated several pro-unions, pro-worker, policy initiatives. Workers have been receptive to this kind of populist rhetoric but countering that has been the nation's weak labor laws.
 
In addition, several red states' recent legislative attempts to stop further union organizing in the southern part of the country are not playing well among the membership. The conservative Supreme Court rulings in favor of business over unions are another stumbling block for many workers as well.
 
All indications are that if the election is as tight as the polls indicate, a handful of swing states could make a big difference in who wins. In three of those five states, unions may end up holding the key to who wins. Both sides know this, so expect a lot more attention to be paid to this crucial voting bloc. 
 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.

 

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