Why the 2016 Verizon Strike Matters

June 19, 2016 by Tom Smucker

I’m a 1946 baby boomer. As a birthday present a friend once gave me a copy of LIFE magazine published the week I was born, a peek into the new world of post-war prosperity I would grow up in. Bob Hope and Bing Crosby dance across the cover, while inside Winston Churchill ponders and Rita Hayworth lounges amidst the ads for whiskey, toothpaste, gas stoves and a full page promise from the Bell Telephone System:  “We are short of Long Distance telephone circuits now but we plan to add 2,100,000 miles of them to the Bell System in the next twelve months.”

And one surprise: a seven page section titled The Great Steel Strike Begins with a full page profiling the strikers, including the president of Local 1397 and his retired steelworker immigrant father across from a full page photo of a surviving participant in the 1892 Homestead Steel Strike at “the monument to his old friends who lost their lives.” No pictures of frustrated managers, no pictures of angry consumers, no pictures of resolute right-wing politicians. All this in LIFE magazine, the network news of ‘46.

When I went to work in 1970 at the Bell System the number of strikes in the USA involving more than a thousand workers still bounced around between 250 and 475 per year, as it had since the end of World War II, since the Great Steel Strike days. In fact, in the late ‘60s through the early ‘70s. along with the anti-war, civil rights, feminist, and gay rights protests, those strikes spiked up.

Six months after I was hired, we had a seven month strike in New York. The length  of that strike was unusual but not its existence; strikes were still a part of the economic give and take. On the wall above my desk as I type is the framed front page of the New York Daily News from January, 1972. PHONE STRIKERS GO ON RAMPAGE with a half page photo of “angry strikers” overturning a phone company wagon. The newspaper’s point of view is neutral at worst.

Then, in the early ‘80s the number of those strikes began to drop until they bottomed out. Over the last twenty-five years they’ve stayed well below 50. What happened?

There’s the steam locomotive explanation: strikes and unions once served a function but no longer have one. There’s the condescending realist perspective: unions used to play a bigger role and now play a small one, get used to it. I favor a combination of the Global Shock argument mixed with the Vast Right Wing Conspiracy theory. Here are some highlights.

In 1947, F. A. Hayek gathered a group of economists in Mont Pelerin, Switzerland, who didn’t like the New Deal, the versions of it spreading across Europe, unions, taxing the rich, regulations, and government meddling in the economy. Their nemesis was British economist John Maynard Keynes and his popular Keynesian economics. For the Mont Pelerinists that was all a slippery slope that slid into socialism and then communism or fascism, and they called it all collectivism. They were out of power and out of fashion, but they were certified smart guys with big ideas, bankrolled by some American businessmen.

Around the same time, among the wave of strikes that rolled through American industry after V-J Day, the electrical workers struck General Electric and won big. GE management was stunned, not simply by the outcome, but by the strike itself. Union members blocked and closed down plants with wide community support from clergy, veterans, press, students, even the police. So GE assigned an advertising and marketing guy named Lemuel Boulware to change the mindset of the workforce and the public.  In 1954 GE hired Ronald Reagan, not just to host GE Theater on TV but to tour company factories and offices. As a goodwill ambassador and public face of the company, Reagan got more ideological as he traveled around with GE management. Boulware was his mentor.

In 1964 Barry Goldwater lost in a landslide to Lyndon Johnson, only winning in the Deep South. Portrayed as a cowboy, Goldwater was actually a benevolent boss and onetime member of the NAACP who inherited and ran a Phoenix, Arizona department store, and didn’t want the government telling him what to do. He was not a bigot, but voted against the 1964 Civil Rights Act as a Senator because he decided it was unconstitutional after conferring with Phoenix lawyer and future Supreme Court Chief Justice William Rehnquist and Yale professor and future failed Supreme court nominee Robert Bork. Bingo! A just barely disguised way to attach white backlash to the fight for free markets.

In 1971 a former head of the American Bar Association and all around big time lawyer who sat on the board of Phillip Morris named Lewis Powell wrote a detailed secret memorandum for the Chamber of Commerce titled “The Attack On The Free Enterprise System.” Ralph Nader was popular, businessmen and corporations were not, and I was a young guy in the middle of a seven month strike that made the front page of the Daily News. Powell chastised the business community for not sticking up for themselves and laid out the counter attack: think tanks, public relations, conservative professors, lobbyists, legislation, media and an activist, well financed Chamber of Commerce. Two months after the memo circulated Powell was nominated by Nixon for the Supreme Court along with William Rehnquist, and approved 89 to 1. Both Powell and Rehnquist joined the court in January, 1972.

It was all in place: Hayek and the big ideas, Boulware and the hype, likable candidate Reagan, white backlash, law and order, guys like Powell and Rehnquist in the courts, the politicized business community. And then there was an opening.

In the 1970s the US economy quit behaving as predicted by Keynesian economics, as it had since the Great Depression. The OPEC oil embargo, and then the Ayatollah taking over Iran with it’s oil, the competition from reindustrialized Germany and Japan, and some out of whack trade deals combined to create a Keynesian impossibility: stagflation. The jump in oil prices and oil dependent goods and services caused inflation, which was supposed to be a sign of an “overheated” cranked up economy. But it was not. Unemployment jumped up as well. Global shock.

Nixon, Ford, and Carter all dithered with this problem. Tax cuts? Deficits? Free Trade? Unions on the boards of corporations? Government investment in job creation? A national industrial policy? Stick with Keynes? Move beyond Keynes? Go back to before Keynes? In the end the unions lost out on some very close, and largely forgotten votes that would have moved beyond Keynes. And then the Ayatollah’s followers held 52 Americans (and our news media and politicians) hostage in Iran for 444 days and Ronald Reagan was elected president.

Back in 1938 the Supreme Court ruled, in NLRB v. Mackay Radio & Telegraph, that striking workers maintained their legal rights as employees, but that employers could hire replacement workers (scabs) during a strike and did not have to let them go when the strike was over. That meant that a striking worker might have to wait for a job to open up after the strike was settled, since a scab now held his job and did not have to give it up if the company so decided. This is uniquely American awful labor law. (And one that only last week finally received some constraints from the Obama appointed National Labor Relations Board.) For the most part, before the 1980s, if employers hired scabs during a strike they let them go when the strike ended and the striking employees returned, even though they were not legally obligated to do so. It just wasn’t done.

Then, in August, 1981, 43 years later, the air traffic controllers union, PATCO struck and President Reagan decertified the union and permanently fired everyone who did not immediately end the strike and get back to work. It was back to 1938, Mackay Radio & Telegraph, and pre-Keynesian economics.

Why wasn’t there a bigger, immediate response? PATCO (at first) had the go it alone mentality of most unions back then. Reagan’s mojo was working. The remains of the anti-war new left was anti-government for different reasons and therefore ill-equipped to take on Reagan’s “government is the problem” economics. No one, as far as I remember, realized or noticed that the opening battle of the war on unions was the culmination of 40 years of planning. Many hoped it would be a four year aberration.

At first, telephone union members were protected from the union busting. The Bell System remained a regulated monopoly, most non-management employees nationwide were unionized and after the seven month strike in 1971-72, the company saw the value of national bargaining and we had twelve years of great contracts, with improvements in health care and pensions, cost of living clause protection from inflation, and control over arbitrary transfers and lay-offs.

Until the free marketers got around to the telephones. On January 1, 1984, the Bell System was dismantled. Not by Congress, not by the Supreme Court, not by the FCC, and not by a special panel. By Assistant Attorney General William Baxter (specially appointed by Attorney General Smith) and District Judge Harold Greene, with a little input from AT&T Chairman Charles Brown and no input from the unions or consumers.

Maybe as consumers out of this dismantling we gained the ability to attach as many different phones as we cared to attach to our landline and gained some competition over cell phone service. But all in all I believe we lost more than we gained. We lost Bell Labs and universal coverage and public regulation and were left with the digital divide and utilities uninterested in providing the same service to rich, poor, urban and rural, and unions scrambling to bargain all sorts of regional contracts susceptible to regional political and economic fluctuations instead of one big national contract.

In 1989 in the northeast we had a seventeen week strike against NYNEX, our piece of the defunct Bell System, which later merged into Bell Atlantic, which later merged into Verizon. We struck to hold onto our A plus health care coverage, while the coal miners struck Pittston in southwestern Virginia, and the machinists struck Frank Lorenzo’s Eastern Airlines. We won our strike, as did the miners, while Frank Lorenzo chose to destroy Eastern rather than recognize the unions.

It was the end of the Reagan presidency, and we hoped the end of an era. Jesse Jackson was running for President. I got to see him address the victorious coal miners down in Appalachia with some CWA friends, an amazing event that didn’t fit in the storyline of the times and as far as I know, received no national media coverage.

Then the first George Bush won the election and was followed by New Democrat Bill Clinton, who modified the harshest Reagan era anti-union policies and rhetoric and addressed unions as allies and governed during the dot com boom and bubble but pushed NAFTA through Congress harder than he tried to push labor law reform. Manufacturing started moving to Mexico and then call centers started moving to Asia. Unions made concessions under the threat of jobs going over the border until concessions became the new normal. All of the free trade, deregulation, anti-tax, anti-government, free market, anti-union thought leaders, lobbyists, pundits and most of the politicians remained in place whether it was Bush One, Clinton, or Bush Two, along with the public consensus (or just acquiescence) they had created. As deregulated telecom moved into the internet and smartphone era it wiggled around to leave the unions and the copper wire landlines over in what they called their legacy businesses.

And that’s how we got to the 25 plus years where the strikes disappeared.

And then, at the end of 2007 there was a worldwide financial meltdown. The Great Recession began. Maybe the Mont Pelerin guys had been wrong. Maybe the link between free men and free markets was a political opinion, not an iron law of nature.

In August 2011 the CWA struck Verizon for 13 days in the northeast. It was the first time since the 1997 UPS strike that the New York City public had seen a big strike – working people out on the streets – and the first time since the meltdown. The contract that eventually resulted wasn’t that great, but here’s the important chronology. A month after that strike, in September 2011, Occupy Wall Street began.

Do not trust any analysis of Occupy that claims it was merely idealistic students and crackpot old anarchists. I am not alone in believing the 2011 Verizon strike was the spark plug, and I know unions and union members were involved in, influencing, and were influenced by Occupy Wall Street, including many who became the leaders of the 2016 Verizon strike. “We are the 99%” cracked the Reaganite mindset, opening a space for foreclosed homeowners, debt-burdened students, laid off professionals, underpaid fast food workers, and under attack union members to notice that they shared a common space.

And so began, consciously or not, the dismantling of the whole Mont Pelerin-Boulware-Powell-Reagan consensus, both full strength far right or diluted new democrat.

For example: the CWA and other unions broke publicly and politically with Obama over the Trans Pacific Partnership (TPP), as they had not with Clinton over NAFTA. Perhaps so-called free trade created jobs on Wall Street and in Silicon Valley, but it wiped out industries from Camden to Oakland and Milwaukee to Birmingham.

I buy into the analysis that trade deals have been used as foreign policy since at least the cold war, the carrot for the military stick. That worked OK when we could let Japan sell their stuff to us, while protecting their own industries from our stuff, back in the ‘50s, when we were the world’s biggest and richest collection of consumers and didn’t want Japan (or western Europe) switching cold war sides and going commie. That didn’t work when working people in the USA were expected to watch their jobs disappear if foreign policy required luring South Korea and Viet Nam away from China and our finance guys claimed the right to move their money around the globe to wherever they could get the best return. Want to move your factory from Evansville, Indiana to Mexico or Viet Nam? Go right ahead. Lost your job in Evansville, Indiana? Get a U-Haul. And go where?

Why does this matter? Because there’s four ways out there of explaining the same set of facts. The Trump approach: illegal Hispanics are sneaking over the border and must be stopped with a wall and deported. The rich liberal snob approach: you are a bigot if you lost your job and notice there are lots of undocumented workers willing to work for less than you. The rich conservative approach: let Fox News stir the pot  but don’t let it go as far as Trump, remember that the donor class prefers an inexpensive, perhaps illegal, powerless employee class. And the anti-NAFTA, anti-TPP, pro-union approach: trade deals used for foreign policy to please global finance while punishing working people in America and displacing farmers in Latin America without a countervailing industrial policy to protect or create good stable jobs . . . are bullshit.

Only the fourth approach describes reality and creates space for rebuilding, or at least imagining rebuilding a livable economy, but it took a while for union people to get there. I remember about 20 years ago when I was a Chief Steward and a crew I represented had a meeting with an officer in our Local, a good guy we were hoping could apply some pressure. One member went way off topic and asked why the union was supporting Clinton’s push to pass NAFTA. I was mortified; we were supposed to stay focused on the overtime list, not national trade policy. But the member was right to ask. In the long run, Clinton couldn’t reinvent a New Deal style economy and at the same time support NAFTA style free trade. Neither can Obama. Neither will Clinton Two.

Another example of a change in approach for the union that addressed the anti-union juggernaut: the fight for a $15 an hour federal minimum wage. Once upon a time someone with a good union job with good benefits might have been concerned with the minimum wage as a moral issue but not as a political one. But when everyone realized that we were all racing to the bottom, it started mattering how low that bottom went, and then how far that bottom could start pushing up. Likewise, it started mattering how high the top could hold. Would everyone get pulled down or get pulled up. One common picket line sign declared, “CWA on Strike for Middle Class Jobs at Verizon.” That was more than public relations. That was a political argument arising from the realization that unions needed sympathy, but also allies.

Some of this was as simple as “I’ll attend your rally and picket line if you’ll attend mine.”  Some of this was looking for allies beyond the unions: at the climate change march, the CUNY funding rally, the 50th anniversary rally in DC of the MLK march. When all this goes beyond merely adding a union’s name to a flyer or providing a speaker at a rally, as it did, and produces real human beings at real events, union leaders and members are building the connections to call on real support when it is needed.

Some of this was staying creative during the strike: sending a delegation to an outsourced call center in the Philippines that got stopped by a private militia; or playing you-can-run-but-you-can’t-hide with Verizon, with civil disobedience in Albuquerque, New Mexico where the corporation held their annual shareholders meeting far from the striking northeast and they hoped, the union.

Some of this was taking Verizon on before the strike about the reality of its unionized legacy business: their attempts at flimflamming the public after Superstorm Sandy when the copper wire washed away in shore communities and Verizon tried to replace it with Voice Link (a longer story) and got blocked by the union, consumers, and politicians; and their attempts at limiting the build out of their fiber optic network (FiOS) as promised, as the union and consumer groups spotlighting how they skipped poor neighborhoods, small buildings and entire cities. Digging into this also exposed how Verizon was using “creative” bookkeeping to show the legacy side losing money and the wireless side as profitable by moving shared expenses into legacy.

Before the strike the CWA also organized four wireless stores in Brooklyn and one in Massachusetts. This underscored the union’s commitment to a multi-ethnic, multi-racial membership and allowed those union members to go out on strike with the “copper/FiOS” members and so, by labor law, crucially allowed the union to picket in front of unionized and non-union Verizon Wireless stores and hurt Verizon on their highly profitable non-legacy wireless side.

These pre-strike activities neutralized what many of us thought would be Verizon’s long game for a strike: limit it to the legacy side, allow it to drag on, claim to lose money, sigh, sell off the copper network and the FiOS outside of Manhattan and disappear into the deregulated, non-unionized world of wireless.

There was one more component that would make the strike a success. Early on, the CWA endorsed Bernie Sanders. Agree or disagree about the choice of candidate, but it turned out to be brilliant. Sanders addressed a pre-strike rally on 42nd Street and by then he was in place as a serious, not marginal, candidate. This mattered. Preparing for a strike when strikes have gone out of fashion can be scary. Democrats, in my experience might drop in for a photo-op on a picket line somewhere during a strike, and take time to address an annual union convention, but Sanders gave an unusually blunt, full-throated speech supporting the CWA and the potential strike. That made it clear that at the very least, the union and the strike would not be ignored. It added backbone.

The strike began the morning both Clinton and Sanders were campaigning for the primary in New York, and to be fair, Clinton showed up at a picket line in midtown. But that evening was Sanders huge rally in Washington Square Park in Greenwich Village. CWA Verizon strikers, all in red shirts, gathered on West 4th Street as the park filled up with yes, a young crowd. But as the strikers were led around the crowd and over through security to where 150 of us got to stand in front of the podium – that young crowd broke out into cheers and applause. For us. For me. One of the most unexpected, moving public experiences in my lifetime.

I can remember marching in a union Mondale rally when he was running against Reagan and having that shoveling shit against the tide feeling as if I was in the Wayne Newton fan club at Woodstock. Whether he won or lost, after that Bernie rally I was convinced that something had changed, and not only during the months that Occupy Wall Street was occupying.

During the strike some of us old timers were hanging out at the Local and marveling at the support the picket lines were getting from the public and other unions. I had come from a Verizon Wireless store where retirees, active CWA members, unionized grad students from NYU, and Hotel workers were all asking the public to boycott the store, and as Verizon’s quarterly reports would show, this boycott was successful. “Why do you think we are getting so much support?” I asked. Another old-timer answered “Because they know this is it.”

Verizon is profitable, their markets in Boston, New York, and DC are profitable. The CWA and the IBEW (who represent most of New England) are savvy unions with active members. If this strike had been lost, unions themselves would have become a legacy and politics itself could have staggered back into a free market stupor. All strikes are hard, on savings, on budgets, on families, on organizations and are won by members who carry that hardship as this strike was won. No strike is 100% successful. Us retirees, for instance, have some anxieties about our health care coverage in 2017. But the unions won and won big. And a victorious strike is empowering, on members, on unions, on supporters. This is not just a victory for unions. It means the dismantling of Mont-Pelerin-Boulware-Powell-Reagansim and the search for a replacement can continue.