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Worker strike strikes workers

Bob Moon Sep 28, 2007

Worker strike strikes workers

Bob Moon Sep 28, 2007


Tess Vigeland: The first nationwide strike against General Motors in 37 years came and went during the past week — 73,000 members of the United Auto Workers union walked off the job Monday morning. They were back by Wednesday — but not before they had to go through plenty of stress over how they would pay their bills.

Experts say walkouts are rare, but they do still happen. TV writers, for example, are holding their breath over a possible strike a month from now. So how do workers deal with the financial setback that inevitably comes with solidarity? Marketplace’s Bob Moon has been looking into that:

Singing Strikers: “We are the union / We are the union / The mighty, mighty union / The mighty, might union . . .”

Bob Moon: It turned out they only had to hold out for a couple of days. But early on, some striking GM workers admitted to fears it might be a long strike — even while they were talking tough:

Female Striker: You know, I’ll do what I have to do to have a good contract. You gotta do what you gotta do. And this is what it comes down to, being a UAW member. You know, all of us sticking together.

Although the UAW is not as mighty as it once was, it still stood ready with a $900 million war chest that would have provided workers with $200 a week.

Few unions can offer that kind of support, though, when how mighty they really are comes down to the spending power of their individual members.

Union Official: We are forced back to work, because we no longer can sustain the loss of salary and a looming end to our health care coverage.

A few weeks ago, clerical workers at the University of Minnesota went on strike for a couple of weeks, costing the average worker around $1,800 in wages. In the end, union leaders accepted the school’s original settlement offer of an extra $300 a year.

Union Official: Our members went into the strike under terrible financial hardship, and we were not prepared to have them endure anymore.

Harley Shaiken: A strike is always difficult for workers, even when they prepare.

Professor Harley Shaiken is an expert in labor issues at the University of California at Berkeley. He says even those workers lucky enough to get a few hundred dollars a week from their union can quickly face financial disaster.

But particularly in communities hit with a major walkout, he says, the limited union support often comes with other lifelines:

Shaiken: It’s meant as the core of larger packages that are often put together with donations — say, of food, or suspensions of payments by local institutions. All of this comes together to try to keep people whole during the strike.

Some unions or employers will keep paying for health coverage. But some don’t. Some states offer unemployment benefits — but most don’t.

It can help to reduce the amount of cash that needs to go out — to pay car loans or credit card bills, for example. Shaiken says lenders can be especially understanding about a strike, if they want to keep your business when you go back to work:

Shaiken: No retailer wants to be known as the person that came out against strikers when they were most vulnerable.

As the UAW strike began, Detroit-area financial planner George Wells heard from clients wondering how to handle a sudden loss of income — some living paycheck to paycheck. He suggests borrowing from credit lines that will be least expensive down the road. That means avoiding the temptation to ring up credit-card debt, but it also means being realistic about your ability to pay:

George Wells: You can tap into your 401k’s and take a loan. You do have to pay yourself back interest. But the problem is if you’re not putting money in and additionally taking money out, you know, you’re really not preparing yourself for the future.

In other words, there’s no easy answer. As Wells sees it, the best solution starts long before a strike.

Wells: People that live right at their means or live beyond their means, you know, these are the times when you kind of get caught or you kind of get in trouble, and you have to really figure out an escape plan in this type of crisis. That if you were saving properly, then you really don’t find yourself in that position, because even if you’re out of income for five or six months, you’re still in the position where you’re able to weather that type of storm.

In Los Angeles, I’m Bob Moon for Marketplace Money.

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