The Incredible Shrinking Union

So the Communications Workers of America are out on strike against Verizon.  The most remarkable thing is not the alleged acts of sabotage against land lines that serve hospitals , or the shocking willingness of an anonymous Verizon manager to threaten retaliation against the more pugnacious strikers when they go back to work (the NLRB rather frowns on that sort of thing).  No, the really remarkable thing is this:  who cares?


Maybe you've noticed if you live or work near a Verizon facility, or if you are the sort of journalist or wonk who follows these issues.  But unless you fall into one of those two categories, chances are you weren't really aware that it was happening.  The workers who are striking are the ones who service land lines.  And land lines are simply no longer central to American lives, or the economy.

Ultimately, that's what's at the heart of this strike.  A lot of the stories on the strike have tended to present the classic management/union he-said-she-said:

Verizon said it was asking for changes to the contract because its wireline business has been declining as people switch to cell phones. Union officials, meanwhile, say the company has been making billions of dollars in profits in the last four years.
The problem is that both of these things are true.  Verizon's margins aren't particularly fat right now, but the company is still making a comfortable profit.  Unfortunately, the landline business--the division that these workers work for--is collapsing.
Screen shot 2011-08-17 at 11.35.20 AM.png
Margins seem to be improving in the wireline business, thanks to FIOS; people will pay much more for a high-speed internet connection than they will for a telephone.  But landline subscriptions continue to fall, and last I heard, the company had decided not to expand its FIOS network into new cities after it finishes the current rollout.  Most of the profits the people on the picket line keep referring to come from the booming wireless business, which is a non-union joint venture.

In other words, while profits have recovered since 2008, the striking workers aren't generating those profits.  In fact, the legacy network of copper wires they service is rapidly turning into a cost center rather than a source of profits.  They're essentially asking that the firm divert money from the wireless business to beef up pay and benefits for the union workers even as the number of subscribers they have to service is falling.  It's not really surprising that management is saying no.

This situation is pretty much unprecedented as far as I can remember.  Usually union workers are found in the core business of a company--when the company's fortunes decline, so do the fortunes of the union.  But in this case, the union workers are becoming less valuable every year, even as Verizon is worth more.  No wonder this strike seems to be getting so ugly.


Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In