Can Verizon hear them now?

People walk by a Verizon store in New York City.

KAI RYSSDAL: This is, I'll admit, pretty far into the program to be talking about a major strike. But a walkout against Verizon has been going on for three days now, and it's been largely overshadowed by, shall we say, other developments in the economy.

Here are the details: 45,000 workers in Verizon's wireline division walked off the job Sunday. Verizon provides traditional telephone lines in the Northeastern part of the country, from Massachusetts down to Virginia. It also delivers high-speed Internet and fiber-optic television services. But therein lies the catch. The non-union -- and much more profitable wireless division -- isn't affected by the strike.

Here's our senior business correspondent Bob Moon.


BOB MOON: Analysts say Verizon's labor unions seem to have missed this call...

VERIZON WIRELESS COMMERCIAL: Can you hear me now? Good! Can you hear me now? Can you hear me now?

While Verizon's wireless business is booming, its landline network has been shrinking about 8 percent a year. The company argues those call-center workers and technicians can't expect to make up to $91,000 a year, with benefits averaging $50,000. The unions say the company wants $20,000 in pension and health care give-backs.

Frank Louthan follows Verizon for Raymond James.

FRANK LOUTHAN: It's just not the profit center that it used to be. It just is not going to be able to sustain the cost structure that it had when they had 30 or 40 percent more customers.

The union points out the company made $3 billion in the first six months of 2011, and the CEO makes tens of millions. But at Recon Analytics, Roger Entner says most of those earnings didn't come from the landline business.

ROGER ENTNER: Should the wireless part, which is only a little bit more than half-owned by Verizon, subsidize the wireline part?

Paul Secunda is a law professor at Marquette University. He counseled Verizon during its last strike in 2000. This time around, he says, the company seems to be arguing that -- given the bad economy -- employees should be happy with what they can get. But he says struggling workers have a compelling case of their own.

PAUL SECUNDA: I think the best argument that the union has is, look, we're fighting for the middle class. If we can't have these jobs, if these types of jobs are not possible, then no one else is going to get these jobs either, and there's going to be increasing income inequality.

Either way, D.A. Davidson analyst Donna Jaegers says the union finds itself in a tough position. Strikers aren't likely to find other work, and the company actually saved money in the early weeks of previous strikes.

I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...