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      Does Wile E Coyote explain US voters’ gloom amid buoyant economy?

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      Strolling past the colorfully restored Victorian homes of the Fourth Ward, watching the barman hand-carve blocks of ice for old fashioneds at the jam-packed bar of The Crunkleton, it’s easy to fall for Charlotte’s ample southern charms. And yet, people are not happy – at least according to the polls.Consumer sentiment in North Carolina is now lower than it was at the height of the pandemic, according to High Point University’s confidence tracker. “People are just not feeling particularly good,” said Martin Kifer, director of the university’s survey research center.North Carolina is not alone. Official figures suggest the US pulled off an astonishing recovery from the Covid pandemic and recession.More than 20 million people in the US lost their jobs in April 2020 as the coronavirus pandemic shuttered the world’s largest economy. The unemployment rate rose to 14.7%. But the rebound was just as dramatic. Unemployment has hovered near 50-year lows since January 2022 and is now 3.8%. In North Carolina, it’s just 3.3%. More than 100 people are moving to the city every day.But as an exclusive Guardian/Harris Poll survey found this week, two-thirds (68%) of Americans report it’s difficult to be happy about positive economic news when they feel financially squeezed each month.Across the country, poll after poll shows people are not feeling it. That’s not good news for the Biden administration, particularly in a potential swing state where the perceived success – or failure – of “Bidenomics”, as Biden has dubbed his economic strategy, will be one of the key issues in next year’s election.The election is still a way out, and Biden has proven pollsters wrong in the past. Nevertheless, the economy – or voters’ perception of it – will be a defining issue in one of the most consequential elections in US history.Americans are deeply divided on the economy. The Harris poll shows over half (53%) of Americans believe the economy is getting worse. Some 72% of Republicans share that view compared with 32% of Democrats. But the unhappiness runs deep on both sides. Only a third of Democrats believe that the economy is getting better.Even when Americans say they are doing OK financially, they believe the economy is in trouble. According to the Federal Reserve’s annual survey of economic wellbeing, 73% of households said that they were “at least doing OK financially” at the end of 2022. In 2019, that figure was 75% of households. But back then, 50% said the national economy was good or excellent. By 2022, that number had fallen to just 18%.Some heavyweight voices share the gloom. Both the former Treasury secretary Larry Summers and Bill Dudley, former president of the Federal Reserve Bank of New York, have speculated that having shot out of the pandemic like a coyote chasing a roadrunner, the US may be in a “Wile E Coyote” economy and, like Warner Brother’s cartoon canine, the US economy may be heading off a cliff. “Falling back to earth will not be a pleasant experience,” Dudley has warned.Partisanship explains much of the seeming disconnect between economic data and sentiment. But not all of it. Large forces are reshaping the US economy and may explain the nation’s vertigo.Many low-wage workers, have been living with that fear of falling for a long time.Ieisha Franceis’s wages have shot up from $12.50 to $17 since the Durham, North Carolina, resident made the shift from working in fast food to a job at a senior living facility. Wages are – finally – running ahead of inflation overall but for Franceis, “everything looks the same. Inflation’s not gone down, it’s just not going up,” she said. “These days $17 an hour is looking a lot like $12.50,” said the low-wage activist.Franceis used to buy her family’s side dishes, boxes of macaroni and cheese, mashed potato, at Dollar General. The Kraft Macaroni and Cheese (“the good stuff”) has gone. “Now they only carry a cheaper brand with the powdered cheese.” At the average grocery store, that Kraft Mac and Cheese is over $2.“The Dollar Tree went from everything being $1 to everything being $1.25. Now they even have a $5 section and a $10 section. Huh? This was a dollar store,” she said. “Bidenomics” means little to Franceis. “What we need is higher wages and more unions,” she said.Even entrepreneurs are finding the new, post-Covid economy taxing.Cocktail queen Tamu Curtis saw her business boom during lockdown. A Los Angeles transplant, she started giving cocktail classes online and saved enough to open her bricks-and-mortar shop. The Cocktailery – nestled between an Anthropologie and Warby Parker inside an old streetcar station – opened in September 2021 when the vaccines started rolling out. “I thought, OK everybody is going to run and get the vaccines. We are saved! Of course, it didn’t work out that way,” she said ruefully. “That was a plot twist.”Up and running now for over a year, business has been strange. “This has been the craziest summer. It’s so slow,” she said.Retail sales have collapsed but classes have boomed. “People will spend money on experiences. On travel. We spent two years filling our houses with stuff. Maybe we just don’t need that any more.”On top of that, she said, “inflation is killing me.” An order of cocktail bitters that used to cost her $700 shot up to $1,500. “There’s only so much you can pass on. I can’t sell a bitter for $42. There’s a max people will pay.”At the same time, rent is high and financing is getting tougher as interest rates rise. “It’s difficult,” she said. And more so for a minority, woman-owned business. She hasn’t been able to get a traditional bank loan yet or a line of credit from her bank, Charlotte-based Bank of America. “Now the banks aren’t lending the way they were.”Post-Covid has been an easier ride for other local business people but still, existential questions remain, ones that may point to a wider national malaise.Desmond Wiggan and his partner Aubrey Yeboah launched their business, BatteryXchange, in 2019, just before the pandemic. The company sets up battery charging stations for mobile devices and the idea had originally been to target people at conferences or out on the town. “Suddenly there were no people,” said Wiggan.BatteryXChange retooled and now rents its equipment to healthcare providers and others who use the service to help keep their customers online. It worked and business is booming, as is Wiggan’s profile. He has just returned from a business symposium on swanky Martha’s Vineyard. A copy of Propel, a local Black business magazine, sits on his office table. Wiggan’s headshot is above a message from Michelle Obama: “Success isn’t about how much money you make, it’s about the difference you make.”But Wiggan has some wider concerns. He spent two years living in China and has seen firsthand that other countries think on a longer timescale. Back in the US, he said, it’s all about the next election cycle. On top of that another likely hot election issue worries him. “The age gap of our leaders. They are old. The torch has got to be passed.“These other countries are starting to sniff us out,” he said. Foreign students were getting their education in the US then going home because they see their country looking to the future, he said. “They are thinking 2060 not every four, eight years when we go back and forth.”****Why people feel so bad about an economy that – technically – appears strong is a question that is vexing not just the White House but Nobel economic laureates. Historians will have a better answer. For now, the reasons look manifold.As HPU’s Kifer points out “the perception of the economy is not the economy.” The disconnect between the official figures and how people feel may be temporary. Nor is it unusual for the hangover of a recession to outlast what looks like the beginning of a recovery. High Point’s own consumer confidence index started in 2010, two years after the peak of the 2008/2009 recession. It wasn’t until September 2011 that confidence started rising.The US’s pandemic recession began in February 2020 and ended two months later, making it the shortest recession on record. The body blow it dealt to confidence is, however, proving hard to shift. And things are different this time. For one, there is relatively high inflation – something never directly experienced by Americans under 40. Slowing increases have done little to calm people’s nerves and most people in North Carolina expect inflation to get worse next year, according to another HPU poll.The mood of economic despondency is fueled by other fires, too, illustrated by life in North Carolina and felt across the country.Politics plays a huge role. The University of Michigan’s national consumer confidence index shows Republican confidence soared under Trump and dropped under Biden while Democrats’ did the opposite.But it’s not the only factor. While people may not have lost their jobs, America’s middle class has lost $2tn in wealth since 2020 thanks to inflation and the fastest increase in interest rates since the 1980s, according to data compiled by economists at the University of California, Berkeley.That fall comes after outsized gains from stimulus cheques, rising house prices and other assets for those who rode out the pandemic with little financial cost. Still, the psychological pain of losing is about twice the pleasure of winning, according to Nobel-winning psychologist and economist Daniel Kahneman. Losses loom larger than gains.Then there are the epochal issues of our day – ones that will spread far beyond North Carolina and the Biden presidency.North Carolina has been voted the best state for business for two consecutive years and business is still good. But there are signs of a slowdown. According to the Charlotte Regional Business Alliance, the Charlotte area expects businesses to invest $2.3bn in the region this year and create 7,200 jobs. That’s down from $8bn in investment and 20,000 jobs last year.Uncertainty is a large part of that drop, said Danny Chavez, chief business recruitment officer of the Charlotte Regional Business Alliance. Concerns about the direction of interest rates and political change are part of it – businesses waiting to see what happens next year, a natural part of the cycle. There is also something more.The number of jobs created per investment is also decreasing as tech takes jobs. Financial services and manufacturing are extremely important to the region. They remain so, said Chavez. “But in terms of jobs, both those industries are highly vulnerable to automation and AI,” he said.While Charlotte is better positioned than most to ride out that change, Chavez said the region – and the rest of the US – is also increasingly competing with global players. India and China are challenging the US’s rank as the world’s largest economy.Biden’s economic plans are playing to the long term and America has proved resilient to big shocks before. The president also has a track record of beating expectations. If hiring stays steady and inflation keeps receding, maybe Americans will hear the good news soon. That may or may not happen before the 2024 election.But the polls may also reflect a wider anxiety about the existential challenges the US (and other economies) face. Perhaps those challenges explain some of the national mood. It’s hard to measure existential dread.Longer term, neither Bidenomics – nor Trumponomics – are likely to fix America’s broken healthcare and childcare systems or the climate crisis. Nor do they offer clear solutions to the global trade winds that threaten American exceptionalism or the challenges presented by AI and automation.Little wonder then that so many in the US feel like Wile E Coyote, running off the cliff, treading air, waiting for the fall. More

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      ‘We build those cars’: US workers on Ford picket line demand a fair share

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      Under blue skies in Wayne, Michigan, a half-hour outside Detroit, the mood was festive but defiant as hundreds of autoworkers settled in for the first weekend of picketing at the entrances to Ford’s Michigan Assembly Plant.Ford’s workers were among the first to go out in a series of targeted strikes that marked the beginning of the largest industrial action taken by US car workers in over a decade.A chorus of horns blared in support from Michigan Avenue, a busy highway running through the nation’s automotive heartland. Strikers turned away semi-truck after semi-truck trying to deliver parts to the plant, which produces the Ranger and Bronco. “Hell no, you’re not coming in here, keep it moving,” a worker yelled.The United Auto Workers (UAW) president, Shawn Fain, called the strike after failing to reach new union contracts with Ford, General Motors and Stellantis before a midnight Thursday deadline.The strikers’ message: they’re no longer accepting the automakers’ “corporate greed”. They point to the companies’ record profits in recent years and huge stock buyback programs that are enacted as workers struggle to make ends meet.Ford’s CEO, Jim Farley, briefly stopped by to meet with picketers. Several workers near retirement weren’t particularly impressed by the gesture. He made $29m a year, they noted, while hourly workers were “fighting to get money to survive after we leave here”, said plant worker Stu Jackson. “How many years do we even have left to live after we retire? Ten years?” asked Jackson, who highlighted the toll factory work exacts on workers’ bodies and health.“Did you see Farley in his tailored European suit? Wasn’t he sharp?” Jackson asked. “He looks like the $29m man. Those nice shoes.“And look at us,” Jackson added with indignation, motioning to the small group dressed in jeans, T-shirts and sweatpants. “This isn’t fair.”As Fain has pointed out repeatedly, CEO pay has soared as the car companies have recovered from the 2008/2009 financial crisis. Pay for the big three companies’ bosses jumped by 40% between 2013 and 2022. The GM boss, Mary Barra, took home $29m in 2022. Meanwhile, auto manufacturing workers have seen their average real hourly earnings fall 19.3% since 2008, according to the Economics Policy Institute.Domonique Hicks, a young mother of three who lives in Detroit, said the $16.67-an-hour wage she received was not feeding her children.“We’re here to take back what Ford took from us,” Hicks said. “They didn’t want to bargain with us so we’re making a statement – if you can make millions and billions, then we deserve something. We build those cars.” The strike will go on for as long as Ford “wants to keep their checkbook in their pocket”, she added.Among other issues, the union is calling for a 40%-plus pay increase, an end to two-tier wage systems in which new hires are paid significantly less for doing the same work and the restoration of benefits cut to help save the car companies after the 2008/2009 recession drove them to bankruptcy.Auto executives expressed frustration as the strike entered its first weekend. A Ford spokesman called the UAW’s terms “unsustainable”. “I’m extremely frustrated and disappointed. We don’t need to be in a strike right now,” Barra told CNBC on Friday.The White House is watching developments closely. On Friday Joe Biden said his team was engaged in trying to find a resolution and called on the car companies to “go further” in their negotiations with striking workers.“The companies have made some significant offers. But I believe that should go further to ensure record corporate profits mean record contracts,” he said. “Record corporate profits, which they have, should be shared by record contracts for the UAW,” Biden reiterated.Hicks said she had a message for those who oppose the strike, or worry about how it will affect the economy. “People are hurting. You’re talking about shutting down the economy? [The auto companies] are shutting down the economy because they aren’t putting money back into it, so we’re here to get it.“How am I supposed to feed my kids?” Hicks asked. “We’re just trying to live and support our family.”Even with a wage of about $24 an hour after starting at $16 nearly four years ago, plant worker Amanda Robinson says she can barely afford the payments on her car and there’s not much left after bills at the end of the month to raise her three-year-old son.Working in the plant is not an “easy walk in the park, sit at a desk” job, she said. It was grueling and took a physical toll, Robinson added, and they deserved better wages.“We’re showing them that we’re not playing,” she said. “We’re willing to do whatever it takes. Everybody is standing behind us.” More

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      UAW strike: Joe Biden calls for resolution but understands workers’ frustrations – video

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      The US president said on Friday that no one wanted the United Auto Workers’ union to strike in its labour dispute with the big three US carmakers – but workers should get a share of the profits those companies are making.

      Biden told reporters at the White House that he understood the workers’ frustration, adding: ‘Record corporate profits … should be shared by record contracts for the UAW’ More

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      US economy going strong under Biden – Americans don’t believe it

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      Americans do not trust the government’s economic news – or the media’s reporting of it – according to a Harris poll conducted exclusively for the Guardian that presents the White House with a major hurdle as it pushes Biden’s economic record ahead of next year’s election.The US has roared back from the Covid recession by official measures. But two-thirds of Americans are unhappy about the economy despite consistent reports that inflation is easing and unemployment is close to a 50-year low. And the poll suggests many are unaware of or don’t believe the positive economic news the government has reported.The results illustrate a dramatic political split on economic views – with Republicans far more pessimistic than Democrats. But unhappiness about the economy is widespread.
      Two-thirds of respondents (68%) reported it’s difficult to be happy about positive economic news when they feel financially squeezed each month (Republicans: 69%, Democrats: 68%).
      Two-thirds of Americans (65%) believe that the economy is worse than the media makes it out to be rather than better (35%).
      In August the unemployment rate was 3.8%, close to a 50-year low. But the poll found that 51% wrongly believe that unemployment is nearing a 50-year high rather than those who believe it’s actually low (49%).
      The lack of confidence in the economy has many academics and politicians puzzled. Some have blamed the US’s polarized politics and this was illustrated in the poll. But Harris’s data also shows that fears are widespread – and reinforced by disbelief of or ignorance about official figures and a mistrust of the media’s reporting of them.Some 82% of Republicans and 66% of independents believe the economy is worse than the media’s portrayal. But nearly half of Democrats (49%) also said the media viewed the economy too favorably.Overall, the poll found widespread despondency about the state of the economy. More than half of Americans (53%) believe the economy is getting worse instead of better or staying the same. Republicans and independents are more likely to think it’s getting worse (72% and 58%, respectively, v Democrats: 32%), while more Democrats think it’s getting better (32% v Republicans: 8%, independents: 13%).The results paint a difficult picture for Joe Biden, who is making “Bidenomics” – his economic policy record – a central plank of his re-election platform.The views of those familiar with Bidenomics showed a perhaps unsurprising party split. Some 60% of Democrats believe his plans are improving the US economy overall compared with 12% of Republicans.There is a widespread belief that Bidenomics is good in theory but isn’t being implemented well – something both Democrats and Republicans agree with (62% v 58%).Biden supporters have just launched a $13m advertising campaign extolling the president’s economic achievements, which include a landmark $1.2tn infrastructure and climate bill, massive investment in domestic microchips production and green energy solutions. His legislative actions are predicted to create 1.5m jobs per year for the next decade.That message may be hard to sell given the widespread disbelief of and ignorance about the health of the US economy highlighted by the poll.As well as being wrong about the unemployment data, respondents were unaware of, or chose to mischaracterize, other major economic data points.skip past newsletter promotionafter newsletter promotionThe widest measure of economic growth – gross domestic product – increased at a 2.1% annualized rate last quarter and has been steadily improving since the Covid downturn. But more respondents (59%) believe that the US economy is shrinking this year than those who believe it is growing (41%). More Republicans (72%) and independents (63%) believe the economy is shrinking than do Democrats. But still, a sizeable 44% of Democrats believe the economy is shrinking.The S&P 500 stock market index is up 16% so far this year. But 59% of respondents wrongly said they believe the S&P is down for the year compared with those who said they believe it is up (41%). The majority of all those asked said the S&P was down whether Republican (66%), independent (60%) or Democrat (52%).US wages are, finally, growing faster than inflation. But 75% of those polled wrongfully believe that wages aren’t keeping up with inflation. That view is held by the majority of Republicans (84%), independents (75%) and Democrats (67%).There was some good news for Biden. The poll found that 75% of respondents support at least one of the four main branches of Bidenomics: improving infrastructure, attracting high-tech electronics manufacturing, building clean energy manufacturing facilities and attracting more high-paying union jobs.Still, 51% of Americans believe that government spending under the current administration is having a negative impact on the US economy (Republicans: 72%, independents: 54%, Democrats: 30%) rather than a positive impact (21%) or no impact (28%). And only just over a third of Democrats (35%) believe it’s having a positive impact (Republicans: 11%, independents: 16%).“All these perceptual-reality gaps underscore Biden’s difficulty in claiming credit for economic gains. Americans either view the economy through their politics or aren’t feeling it in real life, or both,” said John Gerzema, the CEO of Harris Poll.
      This survey was conducted online within the US by the Harris Poll from 1 to 3 September among a nationally representative sample of 2,055 US adults, where 1,063 were familiar with Bidenomics. More

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      Auto workers strike after contract talks with US car giants fail

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      Auto workers have launched a series of strikes after their union failed to reach agreement with the US’s three largest manufacturers over a new contract, kicking off the most ambitious industrial labor action in decades.The deadline for talks between Ford, General Motors, Stellantis and the United Auto Workers (UAW) expired at midnight on Thursday, with the sides still far apart on the union’s new contract priorities.The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US.The strikes kicked off at midnight at a General Motors plant in Wentzville, Missouri, a Stellantis plant in Toledo, Ohio, and a Ford assembly plant in Wayne, Michigan.They involve a combined 12,700 workers at the plants, which are critical to the production of some of the Detroit Three’s most profitable vehicles including the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck.“This is our defining moment,” said Fain during a livestream on Thursday night, less than two hours before the strike was set to begin.Fain said he would join the picket line at the Wayne plant when the action began at midnight and did not rule out broadening the strikes beyond the initial three targets. “If we need to go all out, we will.”The UAW has a $825m strike fund that is set to compensate workers $500 a week while out on strike and could support all of its members for about three months. Staggering the strikes rather than having all 150,000 members walk out at once will allow the union to stretch those resources.A limited strike could also reduce the potential economic damage economists and politicians fear would result from a widespread, lengthy shutdown of Detroit Three operations.Stellantis has more than 90 days worth of Jeeps in stock, and has been building SUVs and trucks on overtime, according to Cox Automotive data.But a week-long shutdown at Stellantis’ Jeep plant in Toledo could cut revenue by more than $380 million, based on data from the company’s financial reports.“If the negotiations don’t go in a direction that Fain thinks is positive, we can fully expect a larger strike coming in a week or two,” said Sam Fiorani, a production forecaster at Auto Forecast Solutions.He estimated the limited action would stop production of about 24,000 vehicles a week.Among the union’s demands are a 40% pay increase, an end to tiers, where some workers are paid at lower wage scales than others, and the restoration of concessions from previous contracts such as medical benefits for retirees, more paid time off and rights for workers affected by plant closures.Workers have cited past concessions and the big three’s immense profits in arguing in favor of their demands. The automakers’ profits jumped 92% from 2013 to 2022, totaling $250bn. During this same time period, chief executive pay increased 40%, and nearly $66bn was paid out in stock dividends or stock buybacks to shareholders.The industry is also set to receive record taxpayer incentives for transitioning to electric vehicles.Despite these financial performances, hourly wages for workers have fallen 19.3%, with inflation taken into account, since 2008.The Biden administration is reportedly considering emergency aid for smaller supply firms to the automaker manufacturers due to the strike, and president Biden spoke to Fain on the status of negotiations on Thursday.Ford said in a statement the UAW’s latest proposals would double its US labor costs. A walkout could mean that UAW profit-sharing checks for this year will be “decimated,” the company said.GM and Stellantis declined to comment ahead of the midnight strike deadline.However in an earlier video GM’s top manufacturing executive Gerald Johnson said that the UAW’s wage and benefits proposals would cost the automaker $100 billion, “more than twice the value of all of General Motors and absolutely impossible to absorb.” He did not detail how the union proposals would result in that cost, or over what time frame.And in an appearance on CNBC on Thursday evening, Ford CEO Jim Farley also criticized the union, claiming, “there’s no way we can be sustainable as a company,” if they met the union’s wage demands.GM CEO Mary Barra also said in a letter to employees about the status of negotiations and the company’s latest offer to the union, “Remember: we had a strike in 2019 and nobody won.”The contract fight has garnered significant support from the public and US labor movement. Drivers represented by the Teamsters have pledged not to cross the picket line, halting deliveries of vehicles from the automakers throughout the strike. Several labor unions, environmental, racial and social justice groups have publicly announced support for the UAW in their fight for new contracts. More

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      US inflation in August rose to 3.7% amid sharp increase in energy prices

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      US inflation in August rose for the first time since June 2022, rising to 3.7% as a sharp increase in energy prices pushed prices up toward the end of the summer.Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when the rate peaked at 9.1% in June. Still, an increase in inflation means the US economy is further from the Federal Reserve’s target rate of 2% and will probably make officials consider pushing interest rates up later this year.The price of energy commodities, including gas and oil, jumped up 10.5% over the last month, according to the latest Consumer Price Index data, which measures the prices of a basket of goods and services. Gas prices ticked up in August as Russia and Saudi Arabia continued aggressive cuts in supply, bringing the price of crude oil to 10-month high at $91 a barrel. Higher gas prices accounted for more than half of the increase in the overall inflation rate.Meanwhile core inflation, which measures the price of goods and services minus the volatile energy and food industries, actually decreased in August to 4.3%, down from 4.7% in July, reflecting the impact higher energy prices are having on the overall inflation rate.Even with the decrease in core inflation, which has been higher and going down at a slower rate than the 12-month inflation rate, inflation still remains far above the Federal Reserve’s target rate of 2%.Though price decreases have been seen in used cars and medical care services over the last few months, home prices have hit a near-record high in June, keeping core inflation stubbornly high. The median home price hit $413,80, the second-highest price ever, according to the National Association of Realtors. Home prices cooled slightly to $406,700 in July, but home prices still remain 7.3% higher than a year earlier.Even with inflation slightly up, the Fed is on track to keep interest rates the same at their next board meeting on 20 September. Economists say the Fed has had a pause planned for the meeting for a while as many officials say the economy has yet to feel the full effects of interest rates, which are at a 22-year high at 5.25% to 5.5%.But as the health of the economy continues to be hard to pin down – job growth has remained relatively stable even amid high interest rates, but inflation is still far from 2% – the Fed could still raise interest rates at future meetings. Future interest rate increases could introduce more volatility to the US economy, and potentially trigger a recession, though the Fed’s mission to bring down inflation has yet to bear dramatic consequences.The Fed chair, Jerome Powell, said last month that officials were aware of the precarity, saying they will “proceed carefully” as they decide what to do with interest rates. Powell has said the overall decline in inflation has been a “welcome development”, but it still remains high.“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” he said. More

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      Will Starbucks’ union-busting stifle a union rebirth in the US?

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      With more than 340 victories at Starbucks stores across the US, the campaign to organize the coffee chain’s workers is one of the most successful union drives in a generation. But Starbucks’ fierce union-busting campaign has badly slowed its momentum and exposed deep flaws in US labor law that threaten other promising unionization efforts.Two years on since workers at a Buffalo Starbucks started the first successful campaign to form a union at a company-run store, labor experts say the coffee chain’s aggressive union-busting is shining a harsh light on the shortcomings of the National Labor Relations Act (NLRA) and how that 88-year-old law which governs unionization campaigns is proving far too weak to stop a powerful, multibillion corporation from using an arsenal of illegal tactics to stifle a highly promising union drive.Many labor experts say the unionization campaign at Starbucks has done more than any other effort to inspire union drives, whether at Trader Joe’s, Apple or elsewhere, but if Starbucks succeeds in quashing its baristas’ organizing efforts and prevents them from ever getting a first contract, that would be a major symbolic and substantive blow to the hopes for a union rebirth in the US.Even strong union supporters admit that Starbucks’ “union avoidance” tactics have severely cut into the union’s momentum and win rate.“Starbucks has figured out an ingenious plan to get around labor law, which is: break so many labor laws so fast that the National Labor Relations Board simply can’t keep up in enforcing the law,” said Jaz Brisack, a fired barista who worked at the first company-run Starbucks – the Elmwood Avenue store in Buffalo – where workers voted in favor of unionizing.The regional offices of the National Labor Relations Board (NLRB) have brought 100 separate cases against Starbucks – an extraordinarily high number – which together allege more than 1,000 illegal actions, many of them in retaliation against workers for unionizing: from closing stores because they had unionized to reducing workers’ hours after their stores unionized. The NLRB has also filed an unusual nationwide complaint accusing Starbucks of refusing to bargain at 163 unionized stores across 28 states.All told, rulings by various judges and the five-person labor board have ordered reinstatement of 28 Starbucks workers they found to have been illegally fired in retaliation for union activity. Dozens more pro-union baristas are awaiting rulings about whether they, too, were fired illegally – the NLRA prohibits employers from retaliating against workers for backing a union. Their union, Starbucks Workers United, asserts that nearly 200 workers have been fired in retaliation for union activity.“If Starbucks had not engaged in this ferocious, unlawful campaign, they would have 3,000 unionized stores by now, not 300,” said John Logan, a professor of labor studies at San Francisco State University and an expert on corporations’ anti-union strategies. The number of unionization petitions filed by Starbucks workers has plummeted from 71 a month in March 2022 to around a dozen a month today.Logan said the NLRA aims to let workers freely choose whether they want a union to represent them. “The problem,” he said, “is companies like Starbucks have turned it into a choice by the companies, not by the workers.”When Starbucks’ former CEO, Howard Schultz, testified before a Senate committee in March, he asserted that the company had not broken the law even once in battling against the union. Starbucks continues to maintain that position, asserting that any pro-union worker who was fired was not dismissed for union activity, but for violating company rules, such as arriving late to work.Labor leaders often complain that the NLRA’s weaknesses give a bright green light to anti-union companies to break the law. The NLRA doesn’t allow for any fines, not even one dollar, if a company is found to have, for instance, illegally fired the four workers leading a union drive. Nor can a company be fined for closing a store or operation in retaliation for its workers unionizing. When the NLRB rules that a company broke the law by refusing to bargain, it can’t order the company to reach a first contract. All it can do is order the company to return to the bargaining table, but when that happens, many companies resume doing everything they can to avoid ever reaching a first contract. Even though the first Starbucks store unionized 20 months ago, the company hasn’t reached a contract with workers at any of its 340-plus unionized stores.“The remedy that’s ordered for a failure to bargain in good faith is an order to bargain more. That just doesn’t work,” said Benjamin Sachs, a labor law professor at Harvard.In response to the Guardian’s questions, Starbucks said it “is committed to progress negotiations towards a first contract”. The company accused the union of dragging its feet in bargaining, saying the union “has only responded to 25% of the more than 465 bargaining sessions that Starbucks has proposed for individual stores”.The union responded that Starbucks is the one under scrutiny for refusing to bargain. The union added that it hasn’t responded to many of Starbucks’ requests to bargain because the company has sought to “impose illegal conditions” intended “to prevent us from designating members of our own bargaining teams”. The union says Starbucks has failed to make even one counterproposal to its many bargaining proposals.“Starbucks is proof that a concerted effort by a corporation to delay and violate the law too easily succeeds under the rules of the game we have today,” Sachs said. “We need new rules of the game.“Starbucks isn’t the only one to blame,” he added. “The legal system bears responsibility for enabling corporations to act this way.”Criticizing the system’s delays, Sachs noted that after a fired worker asks the NLRB for reinstatement, it can take up to five years of litigation – including a decision by an NLRB administrative law judge, then an appeal to the five-person labor board, then an appeal to a federal circuit court of appeals – before a worker wins reinstatement, and by then the union drive has often fallen apart because workers were frightened off or discouraged from joining.“You can have all the labor protections in the world, but if you don’t have an effective enforcement and remedies scheme, then it’s virtually worthless,” said Wilma Liebman, who served as chair of the NLRB under Barack Obama.Schultz and his company continue to assert that Starbucks has not violated the law even though judges have ruled that Starbucks illegally closed a store in Ithaca in retaliation for unionizing; illegally threatened workers in Seattle, Los Angeles, Chicago, Minneapolis and Buffalo with loss in pay and benefits because of union activity; illegally reduced the hours of Wichita baristas; illegally spied on workers in Pittsburgh; and illegally called police because baristas in Kansas City had congregated outside their store.“Howard Schultz will say to the grave that Starbucks hasn’t broken the law, but that’s factually inaccurate,” San Francisco State’s Logan said, pointing to the many rulings that Starbucks has violated the law.Starbucks has appealed ruling after ruling that found it has acted unlawfully. Schultz maintained that just because a trial judge had found illegalities doesn’t mean Starbucks did anything wrong – that finding might be overturned on appeal.Acknowledging that appeals can last years, Starbucks said: “The process for reviewing the merits of these allegations is multi-step, includes several layers of review by the NLRB and the federal court system, and usually takes years to complete. Where claims have been filed against Starbucks that we believe are unfounded, we continue to defend the company.”Starbucks workers see a clear objective behind Starbucks’ retaliatory moves: to frighten and even terrorize workers – to make workers too scared to support or work for unionization. Pro-union workers further assert that what they see as Starbucks’ refusal to bargain aims to deter workers at additional stores from unionizing by sending a loud message that if they unionize, there’s no guarantee their store will negotiate a first contract anytime soon to deliver better wages and benefits. Workers at many stores allege that after their stores voted to unionize, management cut back on their weekly hours (and weekly pay) and cut their store’s staffing to make their jobs more stressful and to show that unpleasant things happen if they unionize.skip past newsletter promotionafter newsletter promotion“Starbucks has taken a scorched-earth policy to target union leaders and union stores for retaliation,” said Richard Bensinger, an adviser to the Starbucks’ unionization drive. “Starbucks is starving out union supporters. They’re cutting their hours and starving the stores by cutting staff. They’re starving the unionized workers by not giving them credit card tips. They’re doing everything they can at union stores to be as nasty as they can to undermine the union, to say to non-union workers, ‘‘Look what’s happening there.’ In some cases, they’re even closing unionized stores, like in Ithaca.”Starbucks closed all three of its stores in Ithaca, New York, the first city in the US where every Starbucks was unionized. The company said the closings were for business reasons and had nothing to do with the union. But Kolya Vitek, a barista who worked at two of the Ithaca stores, said: “The closures are very blatantly union-busting. There is no reason they needed to close those stores.” Stephanie Heslop, another barista in Ithaca, added: “They wanted to burn the union to the ground here.”After nearly four years as a barista, Quinn Craig led the effort to unionize a Starbucks in San Antonio, Texas. “As soon as we filed our petition, I started preparing to get fired. I knew that it was coming,” said Craig, who often wore a cap saying “Scary Union Organizer”. “I saw that Starbucks was firing lead organizers in stores all across the country. By the time we won our election, we saw 30 or 40 worker-organizers fired across the country.”The San Antonio organizing drive was fueled by dismay with constantly changing work schedules and what workers said was systematic understaffing, which made their jobs far more stressful. “We also wanted to advocate for a better benefits system,” Craig said. “More than half the people at our store didn’t qualify for all the benefits that Starbucks is bragging about.”On 23 June 2022, the San Antonio workers voted 10 to 6 to unionize. Soon after, workers said, Starbucks began reducing their weekly hours and pay – a move many saw as punishment for unionizing and a stratagem to get them to quit.On the first anniversary of their union victory, the store’s workers walked out, protesting what they said was understaffing. That same day, Craig was fired. “They fired me on the one-year anniversary of our store winning a union election,” Craig said. “They fired the lead organizer on the day we were celebrating. That’s villainous. They’re not sneaky about their retaliatory actions.”To explain the firing, Starbucks said Craig had failed to secure the store’s cash or set the security alarm before the walkout. “I called the manager to say we were walking out,” Craig said. “Her response was ‘OK’ and [she] hung up” – without giving any instructions.Alleging unlawful retaliation, Craig has asked the NLRB for reinstatement. Craig says Starbucks’ tactics – the firings, closings and reduced hours – “have really had a chilling effect. I personally saw several stores in my region lose interest in unionizing. Without all the union-busting, we could have had double the number of stores in my region organized.”Many baristas say one Starbucks strategy in particular has discouraged workers from unionizing. In May 2022, Schultz announced that Starbucks would give certain raises and benefits to workers at its more than 9,000 non-union stores, but not offer those raises and benefits to its unionized workers. Starbucks insists it would be illegal to impose any raises or benefits on its unionized stores without first negotiating about them, but the NLRB’s general counsel asserts that this policy constitutes unlawful discrimination against Starbucks’ unionized workers. Under this policy, Starbucks has given its non-union workers, but not its unionized ones, a more relaxed dress code, increased training, faster sick leave accrual and, most important, credit card tipping. (Workers at the first few Starbucks stores to unionize had asked early on for credit card tipping.)Baristas say credit card tipping can boost pay by $5 an hour, often meaning a 30% pay increase. Starbucks’ refusal to give many raises and benefits, including credit card tipping, to workers at its unionized stores has fueled decertification efforts at more than a dozen stores. Decertification is a process to vote out the union. Pointing to the denial of credit card tipping, San Francisco State’s Logan said: “Starbucks is offering the workers a $5-an-hour bribe to vote out the union.”Federal law prohibits companies from aiding decertification efforts. Starbucks has referred workers interested in decertification to the National Right to Work Legal Defense Foundation, a group long funded by rightwing billionaires, including the Koch brothers. But the coffee company says it hasn’t joined in that foundation’s efforts to assist decertification petitions. The NLRB has blocked several of the decertification petitions because it says Starbucks had failed to bargain in good faith, preventing workers from getting a fair shot at reaching a first contract. Starbucks has criticized the labor board for not giving its workers a free choice to decertify the union – a claim many workers ridicule, saying that Starbucks, with its aggressive union-busting, hasn’t given its workers a free choice on whether to unionize.Labor experts have long proposed ways to revamp the NLRA so that it truly discourages illegal actions by anti-union employers. The Protecting the Right to Organize Act (Pro Act), which President Biden backs, but Senate Republicans have blocked, calls for substantial fines against companies that fire pro-union workers or commit other illegal actions.“Unless Starbucks is made to pay a real price for its illegal conduct, there will be no reason for it not to violate the law,” Logan said. “I would like to see a discussion of having criminal penalties for CEOs whose companies engage in egregious unlawful practices.”Many labor leaders say that to prevent years of delay before negotiating a first contract – that is, if one is ever negotiated – the NLRA should provide for compulsory arbitration if the two sides fail to reach a first contract within a few months. The Pro Act calls for mandatory arbitration. Some labor experts look to Alberta, Canada, as a model; there, if the two sides fail to reach a first contract within 90 days after bargaining begins, the dispute goes to a neutral arbitrator who determines the contract’s provisions.But every time Democrats have pushed to amend the NLRA to make it easier to unionize, Republicans have used filibusters to block the legislation. That happened under presidents Johnson, Carter, Clinton, Obama and Biden.Short of overhauling the NLRA, union supporters say the NLRB should obtain a nationwide injunction to order Starbucks to cease and desist from firing pro-union baristas. The NLRB’s general counsel, Jennifer Abruzzo, has repeatedly sought such an injunction, but judges have thus far failed to grant it, evidently not convinced that Starbucks is systematically taking illegal actions.Starbucks baristas applauded a NLRB decision from last Friday that some labor experts say could go far to discourage companies like Starbucks from violating the law when battling against unionization. Under the board’s decision, if a majority of workers sign cards saying they want to unionize and the employer insists on holding a union vote and then is found by the NLRB to have broken the law in fighting unionization, the labor board will order the company to grant union recognition based on the signed cards.But labor experts fear that conservative, corporate-friendly federal judges may overturn the NLRB’s decision.With labor leaders complaining that Starbucks’ illegalities continue unabated, many pro-union workers are pushing for more militant action to get Starbucks to stop the firings and negotiate a first contract. Some have called for more strikes or civil disobedience outside Starbucks cafes or a nationwide consumer boycott – or a combination of all three strategies.Despite Starbucks’ aggressive tactics, many workers remain optimistic. “They’re doing everything they can to crush our organizing effort. What they’re doing is terrible, closing stories and firings,” said Casey Moore, a union spokesperson and fired Buffalo barista. “But every day we still have stores filing for elections and workers emerging with new energy.” More