March 29, workers at the Capitol Square Starbucks location in Madison announced they would pursue union representation. Those workers join two other Starbucks stores in Wisconsin that are actively lobbying the corporate office for union recognition.
This unionization push reflects a broader trend at Starbucks stores across the country. A successful union vote at a Buffalo, New York Starbucks location in December 2021 led more than 100 other Starbucks locations in 20 U.S. states to follow suit.
Similarly, workers at a Colectivo Coffee location in Milwaukee voted to unionize in August 2021. Their efforts included more than 300 employees between Colectivo locations in Chicago and Madison. In March, the National Labor Relations Board made a final decision that confirmed Electrical Workers 194 as the certified bargaining representative for Colectivo employees.
Following the initial Colectivo union vote, its owners released a letter to customers stating that while they were “disappointed,” they would “of course, respect the rules and bargain in good faith,” according to a Wisconsin Examiner article.
The company’s need to clarify that they would follow the law when dealing with unionization efforts touches on a similar reaction across the country to union votes — surprise. The Starbucks corporate office echoed that same tone in response to Wisconsin locations unionizing.
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“We are listening and learning from partners in these stores as we do across the country,” wrote a Starbucks spokesperson in response to a worker at a Starbucks location in Plover, Wisconsin who attributed his union vote to fire safety hazards at his location. “From the beginning, we’ve been clear in our belief that we are better together as partners, without a union between us, and that conviction has not changed.”
A labor movement is brewing in Wisconsin and across the country for the first time in nearly 50 years, leaving ownership unsure of how to deal with unified worker demands. This concerning distance between workers and corporate representatives is a sign that we may have forgotten about unions for too long.
Wisconsin has historically been a hotbed for union activism that started with the state’s heavy manufacturing base in the 19th century. In 1983, 24.6% of workers were a part of a union while the national rate was 20.1%.
Governor Scott Walker reversed that trend with his 2011 legislation to limit union participation in the public and private sectors — called Act 10 — in a sweeping attempt to cut state spending. A report from the Wisconsin State Journal found that while the Act 10 legislation did help the state with its budget crisis, it also stagnated teacher wages and contributed to a 38.5% drop in Wisconsin union membership between 2010 and 2016.
Despite saving some government spending, the Act 10 legislation failed to predict the national rise in monopolization caused by a combination of automation, international outsourcing and ineffective antitrust prosecution.
Now, workers in Wisconsin’s private sector are facing corporations that are distanced from various problems at each location. Unions are an effective solution to change that.
On a local level, union expansion gives workers a stronger voice to deal with specific issues corporate ownership might not otherwise pay attention to. For example, the Oak Creek and Plover, Wisconsin locations used their union vote to highlight unsafe working conditions.
At Madison’s Capitol Square location, workers cited problems with understaffing and inconsistent benefits as their reasons for organizing a union.
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There are parallels between what unions have historically accomplished — like improving wages and basic working conditions — and what those workers at Starbucks and Colectivo are doing. Their initial demands are modest and should not be painted as excessive or backed by a political agenda.
Union efforts also deserve credit for challenging wealth inequality in the U.S. Research from the Economic Policy Institute shows that higher union membership has historically been associated with a lower share of income going to the top 10% of earners in the U.S.
It is hard to draw strong conclusions about if unions directly caused these changes in income inequality without causal quantitative data indicating so. But, some research does try to explain why, for example, that share of income going to the top 10% reached historic lows in the 1950s when union membership was soaring.
A paper from the National Bureau of Economic Research found that unions are largely successful at raising their members’ wages. It also discovered a negative correlation between executive compensation and unionization and that loss of union members is partially associated with higher CEO pay.
But, there are negative trade-offs to unions for workers and the economy if this union push becomes a permanent trend in Wisconsin.
Barry Hirsch’s Trinity University paper “What Do Unions Do For Economic Performance?” mentions how unions can change market outcomes by moving wages above opportunity costs, thus limiting natural job turnover. A moderately high job turnover rate — as morally wrong as it sounds — is actually good for pairing workers with the firms best fit for their skills and important for healthy economic growth.
This research is relevant to consider as cities like Milwaukee and Madison in Wisconsin shift towards more technology-based economies. A 2017 study found that Wisconsin ranks 20th in the U.S. in tech employment.
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But, workers at Starbucks and Colectivo are not calling for a statewide union push that covers multiple industries employing workers in the state. Instead, they are using union laws to do what they were designed for centuries ago — to protect workers from neglect by powerful and increasingly monopolistic companies.
Wisconsinites should evaluate union expansion on a case-by-case basis rather than taking a merely pro- or anti-union stance. The Capitol Square Starbucks case is a good example of union expansion being a battle between workers and corporate power that should not be politicized.
Broadly, while there is more economic research about how unions successfully challenge wealthy inequality than, say, prevent Wisconsin’s shift towards a majorly tech-based economy, there are strong tradeoffs for both sides of the union argument.
I hope Wisconsin voters and legislators approach our state’s return to unions with productive skepticism as we enter the 2022 elections when this subject will inevitably dominate headlines.
Will Romano ([email protected]) is a sophomore majoring in economics and journalism and pursuing a certificate in environmental studies.