The Year of the Strikes: The Inherent Rights, Broadening Unemployment Benefits, and Wage Increases for Workers Demanding Change in Their Industries

in Employment/Entertainment/Labor Law/Volume VI

By Sophie Zarkesh

Introduction

Over the past year, the U.S. has been hit with a vast amount of workforce strikes from a plethora of industries, ranging from Hollywood to fast-food and hospitality.  Within these industries, low-pay and deeply flawed working conditions are the driving force of the strikes as actors, writers, production assistants, automotive workers, hotel managers, and healthcare workers have been affected.  As strikes maintain their steadfast approach to promote change within these industries, employees are often left with no means of income and businesses have struggled to remain open.  In a direct response to the “hot labor summer”, many states have adjusted their legislation in favor of worker’s rights, specifically focused on unemployment benefits. 

This article will discuss 2023’s past and ongoing strikes, detailing the reasons why workers have opted to strike and lose out on their incomes in the process, or months at a time.  Further, this article will analyze multiple state approaches to the strikes with specific attention on California’s introduction of unemployment benefits for striking workers, which was notably unavailable prior to the 2023 Hollywood strike.  Moreover, this article will examine the benefits that workers have achieved throughout their strikes as well as the tremendous business loss that has loomed over many industries as a direct consequence of striking employees.  Finally, this article will analyze whether the workers and their respective industries can coexist with good pay and fair labor.

In sum, this article will evaluate the past year’s strikes while examining legislative approaches to unemployment benefits and businesses affected throughout.  

Workers Right to Strike

To begin, it is imperative to recognize that workers in the United States have the right to strike.  This right to strike is granted in Section 7 of the National Labor Relations Act (“NLRB” or the “Act”), which states that employees have the right to participate in concerted activities for purposes such as collective bargaining or other protection.[1]  Strikes are among the “concerted activities” that employees may engage in.  In the Act, Section 13 also discusses the right to strike by stating that “nothing shall be construed to interfere with or impede in any way that very right.”[2]  While the right to strike is clearly available to workers, there are also limitations placed on this right, including the situations in which a strike may be deemed unlawful.[3]  It is crucial that the freedom and legal protection to strike is given to American workers, as strikes are a forceful tool that offer workers a bargaining chip for better working conditions and fair pay.  

The NLRB classifies two different kinds of lawful strikers: (1) workers who are protesting their economic conditions, and (2) workers who are fighting unfair labor practices.[4]  Those whose goal for the strike is to gain from their employer higher wages, shorter hours, or better conditions are economic strikers, and can be permanently replaced by their employer.  For economic strikers, being permanently replaced mimics being fired from their perspective.  On the other hand, unfair labor practice strikers cannot be discharged or permanently replaced by their employer.  However, their right to reinstatement can take a long time and people often move on to other jobs.  It is of utmost importance that there are labor laws that can effectively protect workers who have chosen to withhold their labor.  

Current Strikes

An extraordinary 362,000 workers have gone on strike so far in 2023, an 889% increase from 2021. There is clear evidence of their increasing disappointment with work conditions and income inequality due to inflation.[5]  This past summer, the Writers Guild of America (“WGA”), with more than 11,000 members, and the Screen Actors Guild – American Federation of Television and Radio Artists (“SAG-AFTRA”), who represent 160,000 entertainment workers, began their strike against Hollywood studios.[6]  The strikes were propelled by streaming platforms not providing adequate residuals to actors, production companies offering little to no residuals , and other massive changes within the industry.  Furthermore, new technologies like digital recreation and artificial intelligence (“AI”) have ousted writers and actors from jobs they financially depended on.  The strike brought filming and production to a halt as writers, actors, directors, and other workers withheld labor until their demands were met.  After 146 days of labor stoppage, the WGA and the Alliance of Motion Picture and Television Producers (“AMPTP”) announced that an agreement had been reached.[7]  The SAG-AFTRA reached a tentative agreement with studios on November 8th, 118 days after they began their strike.

Hollywood is not the only industry faced with workers who demand change.  The United Automobile Workers (“UAW”) union began striking against Ford, General Motors, and Stellantis in mid-September 2023 for higher pay and benefits.  The UAW has asked for massive wage increases for their workers and better cost-of-living adjustments.  Further, the strike has rattled the automotive industry as the three automakers employ about 150,000 UAW members.  The UAW union announced that it will pay its striking workers $500 a week out of its $825 million strike fund, a luxury that non-union workers are not provided.[8]  

The work stoppages of 2023 have hit many other industries for similar reasons: workers want better pay, conditions, and benefits.  Unionized hotel workers in multiple California cities have chosen to strike for these very reasons this past summer.[9]  Thousands of hospitality workers have protested their poor treatment and demand a change in the massive contrast between their wages and the hotels’ profits.[10]  In October, more than 75,000 Kaiser Permanente employees walked off the job to initiate the largest healthcare strike in U.S. history.[11]  Healthcare workers are protesting the lack of concern for short-staffing and wage increases.  Furthermore, as industries are hit with the lasting repercussions of the COVID-19 pandemic and recent inflation, employees face no other choice than to forfeit their labor to strike.  Laws that protect these strikers and provide support during their stoppage are crucial to protect American values.

Proposed Bill in California

In response to the vast number of California workers who have been affected by the 2023 strikes, in particular the WGA/SAG-AFTRA strike, labor-supporting legislators have pushed to change the law so that striking workers can receive unemployment checks while they protest.[12]  The SB-799 bill, introduced in late August 2023, would allow California workers who have been on strike for at least two weeks to receive unemployment benefits as they advocate for better pay and working conditions.  The bill aids strikers facing immense poverty, potential homelessness, and food insecurity.[13]  Furthermore, to many of these protestors, unemployment checks would be a saving grace during a time where there is little certainty about their employment.  Labor unions argue that if the government does not reach out to help workers receive these unemployment benefits, then they are tipping the scale in favor of their employers.[14]

However, California is faced with a major issue—it does not have the money to keep striking workers afloat by making them eligible for unemployment benefits.  Most states run out of money to pay unemployment checks during times of high unemployment, like during the COVID-19 pandemic or a recession.  Although the state has hit three years of record job growth, California estimates that their benefit payments will exceed tax collections by $1.1 billion.[15]  On top of this, California already owes the federal government over $18 billion in borrowed unemployment benefits for their residents during the pandemic.[16]  The massive debt incurred by the state will likely take over a decade to repay and some argue that adding more fuel to the fire by expanding eligibility for unemployment is detrimental to the state’s economy.  

At the end of September, Governor Gavin Newsom vetoed the bill, effectively deciding that California would not be providing unemployment checks to workers on strike.[17]  Newsom argued that while he supports striking workers, California’s Unemployment Insurance Trust Fund will be nearly $20 billion in debt by the end of the year.  The Newsom administration says that money that goes into the fund comes from businesses who pay unemployment taxes up to $7,000 in wages for each worker, a figure which is the lowest allowed by federal law and has not been changed since 1984.[18]  According to Governor Newsom, the state cannot afford the expansion of unemployment benefits.  

Other State Legislation Regarding Unemployment Benefits

Workers who go on strike generally do not qualify for unemployment benefits, however,  two states—New York and New Jersey—are an exception to this norm.  In New York, unemployment benefits have been given to strikers well before unemployment insurance was even written into federal law.[19]  The New York State Department of Labor (“NYSDL”) maintains that it “remains committed to helping to ensure that impacted workers have access to the resources they are entitled to during trying times, including labor strikes.”[20]  According to the NYSDL, striking workers can file for unemployment insurance once the strike lasts two weeks, a massive reduction in time compared to the seven weeks allowed just prior to 2020.[21]  Once they begin collecting, workers can continue to collect benefits for as long as 26 weeks.[22]  Although New York closely follows California for states with the most debt, New York maintains that they prioritize laborers advocating for a change. 

New Jersey follows New York law closely as the state also recently amended its eligibility waiting period from 30 to 14 days, for up to 26 weeks.[23]  New Jersey Governor Murphy said that unemployment insurance benefits should be a “universal right” for those who are involved in a labor dispute.[24]  The state recognizes that workers are the backbone of its economy and have legislated to push for its workers’ rights, especially when they are fighting for better wages.    

While most workers picketing in the WGA/SAG-AFTRA strike are based in California, questions about other states’ legislative approaches to unemployment benefits continue to be raised as this year’s strikes expand across the country.  About 13,000 autoworkers in the UAW strike walked off the job at assembly plants in Michigan, Missouri, and Ohio.[25]  Another 5,600 workers moved to strike at distribution centers in 20 other states.[26]  Thus far, no other state has passed a bill to provide employees on strike with unemployment benefits.  As strikers remain steadfast in their effort to confront employers, lack of financial support from state legislatures could weaken their demands for change.  

Financial Impact of Strikes on Businesses

While workers on strike most certainly feel the negative financial impact by refusing to work, other businesses who rely on them also suffer the similar consequences of industry disruption.  While top production companies have been hurt by the Hollywood strikes, smaller businesses that rely on the entertainment industry for their profits have been rocked hard as well.  These businesses have been suffering for a number of years since production shutdowns began at the beginning of the COVID-19 pandemic.[27]  As the pandemic era has come to a close, various businesses have opened their doors, like Valentino’s Costume Group, that were finally getting back on their feet until the screenwriter and actor’s strike left them scrambling to pay their rent through a GoFundMe page.[28]  Further, costume designers, studio rentals, and set construction companies have felt the pains of a quiet Hollywood.  Moreover, the impact spreads beyond those who work on movie sets to restaurants, cafes, and nail salons that surround major studios and are nearly empty.[29]  While COVID-19 relief and assistance was available for small businesses during the pandemic, the government is not handing out financial assistance to businesses affected by strikes.[30]

Similarly, the UAW union strike cost General Motors $200 million after only two weeks of the strike.[31]  While Ford and Stellantis have not disclosed the amount of losses they have endured due to the strike, the number is certainly high.  Moreover, California’s economy is heavily reliant on tourism and the hospitality strike placed immense pressure on hotel employers who need their employees to come into work.[32]  Similarly, the healthcare worker strike raises more concerns for the hospitals who employ these doctors, nurses, and other healthcare staff who patients rely on.  While strikes are a beneficial way for employees to be heard by executives in their respective industries, it is prudent to understand that there are many businesses that have taken a tremendous hit because of them.  

Negative Impacts of Strikes

The recent strikes are an example of workers’ rights to demand change within their industries.  However, strikes may also have a negative effect by raising the possibility that an industry may have to lay off their workers to level the profit losses they experienced during the work stoppages.  The financial toll businesses take to withstand a strike is reflected back onto their workers, who end up paying an even bigger price for their demands.  The U.S. Bureau of Labor Statistics estimates that employment in the entertainment industry has declined by 45,000 since May.[33]  Although the strike ended once the SAG-AFTRA reached a deal with studios and streamers, business activities will take time to normalize as productions and theatrical releases as backed up.[34]  Similarly, automobile manufacturers like General Motors (“GM”) and Ford have laid off over 2,000 employees just weeks after the UAW strike began.[35]  In a statement, GM stated that “nobody wins in a strike” and massive job losses amid the work stoppages are evidence of this.[36]  As employees and unions across various industries continue or prepare to strike for better wages and conditions, it is imperative to realize the cost that may come with stepping up, especially without government assistance.  

Conclusion

Although labor stoppages skyrocketed across all industries in 2023, little law has been changed to reflect the importance of aiding those who choose to exercise their right to strike.  The economic tension boiling since the pandemic and recent inflation has fueled workers’ demand for change.  Legislators across all states have raised their concerns for those choosing to forgo their work, yet unemployment eligibility remains narrow.  While a small number of states have chosen to back their laborers, most states will not expand unemployment benefit eligibility to help striking workers in their time of need.  However, there is no winner here.  Hundreds of thousands of employees across the U.S. participated in a strike without pay and businesses have lost out on profits—some in the millions.  Actors, writers, doctors, autoworkers, and hospitality workers demand change within their industries and may be forced to accept terms not reflective of their work if the government chooses to not support their mission.  Contracts are renegotiated on a consistent basis and workers will inevitably demand change in the future.  Americans are granted the right to strike, but without unemployment benefits, their efforts are burdensome to themselves and their families.  In sum, the strikes of the past year and their effects on American workers are evidence that states must prioritize workers by passing strike unemployment benefits legislation before the next year of strikes.


[1] NLRB National Labor Relations Board, The Right to Strike, NLRB, https://www.nlrb.gov/strikes#:~:text=Section%207%20of%20the%20National,for%20employees%20by%20this%20section (last visited September 21, 2023).

[2] Id.

[3] Id.

[4] Id.

[5] Annie Nova, UAW Strikes Could Make 2023 the Biggest Year for Labor Activity in Nearly Four Decades, CNBC, https://www.cnbc.com/2023/09/22/uaw-strikes-could-make-2023-biggest-year-for-labor-activity-in-decades.html (2023).

[6] Chris Isidore, America Is On Strike.  Here’s the Progress Unions Have Made, CNN Business, https://www.cnn.com/2023/09/30/business/us-labor-unions-strike-surge/index.html (2023).

[7] Id.

[8] Neal E. Boudette, U.A.W. Expands Strikes at Ford and G.M., The New York Times, https://www.nytimes.com/2023/09/29/business/economy/uaw-strike.html (2023).

[9] Kim Kelly, Los Angeles Hotel Workers are Striking – Here’s What You Need to Know, Fast Company, https://www.fastcompany.com/90949109/los-angeles-hotel-workers-strike-what-you-need-to-know#:~:text=The%20workers%2C%20who%20are%20represented,a%20pension%2C%20and%20safer%20workloads (2023).

[10] Id.

[11] Michael Sainato, Over 75,000 Workers Posed for Largest Healthcare Strike in US History, The Guardian, https://www.theguardian.com/us-news/2023/oct/03/kaiser-permanente-healthcare-strike-hospital-union-california-washington-dc (2023).

[12] Adam Beam, California May Pay Unemployment to Striking Workers.  But the Fund to Cover It Is Already Insolvent, Associated Press, https://apnews.com/article/california-unemployment-workers-strike-231c27a95c7e19ed439530904af7e6c5 (2023).

[13] California Legislative Information, SB-799 Unemployment Insurance: Trade Disputes: Eligibility for Benefits, California Legislature, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB799 (2023).

[14] Id.

[15] Id.

[16] Id.

[17] The Associated Press, California’s Governor Rejects a Bill to Give Unemployment Checks to Striking Workers, NPR, https://www.npr.org/2023/09/30/1202875436/california-governor-rejects-bill-unemployment-checks-striking-workers (2023).

[18] Sarah Al-Arshani, California Gov. Gavin Newsom Vetoes Bill That Would Give Striking Workers Unemployment Pay, USA Today, https://www.usatoday.com/story/news/nation/2023/10/01/california-strike-unemployment-benefits-gavin-newsom/71026817007/ (2023).

[19] Annie Nova, These 2 States Offer Unemployment Benefits to Workers on Strike, CNBC, https://www.cnbc.com/2023/08/09/where-workers-on-strike-can-qualify-for-unemployment-benefits.html (2023).

[20] Id.

[21] New York State Department of Labor, Unemployment Insurance and Strikes, chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://dol.ny.gov/system/files/documents/2023/09/p835-ui-and-strikes-9-23.pdf (Last visited October 5).

[22] Id.

[23]  New Jersey Government, Governor Murphy Signs Pro-Worker Unemployment Insurance Benefits Bill, Official Site of the State of New Jersey, https://www.nj.gov/governor/news/news/562023/approved/20230424a.shtml (2023).

[24] Id.

[25] Khristopher J. Brooks, Big Three Automakers Idle Thousands of Workers as UAW Strike Rages On, CBS News, https://www.cbsnews.com/news/uaw-strike-update-furlough-workers-ford-gm-stellantis/ (2023). 

[26] Id.

[27] Stacy Perman, Hollywood Production Has Shut Down. Why Thousands of Workers Are Feeling the Pain, Los Angeles Times, https://www.latimes.com/entertainment-arts/business/story/2020-03-17/hollywood-production-has-shut-down-what-that-means-for-thousands-of-workers (2020).

[28] Krysta Fauria, When it Comes to the Hollywood Strikes, It’s Not Just the Entertainment Industry That’s Being Hurt, Associated Press, https://apnews.com/article/hollywood-strikes-ripple-effects-77d2ab962784c68032c3a456cfac7e81 (2023).

[29] Id.

[30] U.S. Department of the Treasury, Assistance for Small Businesses, https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses (last visited September 21, 2023).

[31] Chris Isidore, UAW Strike Cost GM $200 Million in its First Two Weeks, CNN Business, https://www.cnn.com/2023/10/04/business/gm-auto-workers-strike-cost/index.html (2023).

[32] Nate Perez, Hotel Strike Explained, LAist, https://laist.com/brief/news/a-closer-look-at-the-strategy-behind-as-socal-hotel-workers-waves-of-strikes (2023).

[33] Alex Weprin, Film and TV Business Has Lost 45K Jobs Since Labor Strikes Began, U.S. Labor Report Says, The Hollywood Reporter, https://www.hollywoodreporter.com/business/business-news/wga-sag-strikes-film-tv-business-job-losses-september-1235610968/ (2023).

[34] Robert Hum, The Hollywood Actors’ Strike is Over, But the Impact Will Linger for Some Big Companies, CNBC, https://www.cnbc.com/2023/11/09/sag-aftra-strike-impact.html (2023).

[35] Chris Isidore, GM and Ford Lay Off Almost 900 More Workers, Blaming Strike, CNN Business, https://www.cnn.com/2023/10/03/business/auto-workers-layoffs-strike-cost/index.html (2023).

[36] Id.