This year will go down as a very good one for labor in the US. In spite of rising interest rates and inflationthe labor market was sizzling hot through 2023. And while it has cooled since then, unemployment remains low and so are wages catching up with inflation. Meanwhile, unions made headlines in a variety of industries, and workers without a college education had a particularly good year.
Unemployment: historically low for historically long
Unemployment has remained below 4% for 22 straight months, the longest stretch in more than 50 years. Meanwhile, wages began rise faster than inflation in May. Part of that wage growth has been supported this year by big increases in worker productivity.
“When all the manufacturers and producers of services become more efficient, then they can afford to pay their workers more without cutting into their profit margins,” said Erica Groshen, senior economic adviser at Cornell University’s Institute for Compensation Studies and a former commissioner from the US Bureau of Labor Statistics (BLS).
Layoffs were actually not that bad
Layoffs at large companies including Amazon, Disney, Goldman Sachs, Meta, Salesforce, Spotify and Wells Fargo got big news. So are layoffs at the head writers themselves, with media brands included Vox, Vicesand the Washington Post all slashing jobs.
But layoffs in general stay low, show federal data. “The technology and the media industries get a much larger share of the news than the share of the workers they employ. In the broad view of the US labor market, these are relatively small industries,” says Nick Bunker, senior economist at Indeed.
Unions secured wage increases and better working conditions
Some have called 2023 the year of the strike. This is an apt description. There was 413 strikes in the US between January and December 26 involved more than 500,000 workers, according to a tracker from the Cornell University School of Labor and Industrial Relations. About 22 of those strikes resulted major work stoppages. While the number of strikes in 2023 was relatively unchanged from 2022, this year’s strikes increased by approx. four times the workers they did last year. And those strikes led to huge gains in pay and working conditions for workers in many industries. And in some sectors, even the threat of a strike was enough for some unions to secure better contracts.
🎬 Entertainment: Hollywood actors and writers represented by SAG-AFTRA and the Writers Guild of America won pay raises and protections against AI developments after strikes that lasted more than 100 days.
🩺 Healthcare: Kaiser Permanente employees have a 21% wage increase in their new contract after the performance of the largest strike of healthcare workers in American history.
🛞 Cars: The United Auto Workers won a 33% wage increase (after cost-of-living adjustments) over four years for 150,000 employees at Ford, General Motors and Stellantis in its new union contract. The deal has a ripple effect on the industry: After the UAW strikes, Toyota, Honda, Hyundai and Subaru raise wages for non-union US workers
🥂 Hospitality: Employees of casino giants on the Las Vegas Strip—MGM Resorts, Caesars Entertainment and Wynn Resorts—narrowly avoided the largest hospitality workers’ strike in U.S. history when the Culinary and Bartenders Unions reached an agreement with the companies to increase salary by 32% for 40,000 workers over five years
📦 Delivery Services: The Teamsters won better working conditions (finally air conditioning) and higher pay in July for 340,000 UPS workers nationwide
💪 Other industries: Cleaning workers, teachers, pilotsand other workers have also either gone on strike or threatened to strike, with varying degrees of success
⛔️ A warning: Union membership rates remain up historic lows. Right-to-work laws and the company-level bargaining system used in the US—unlike sector level bargaining common in Europe – makes it more difficult for the US trade unions to make great progress
A better year for women and low-wage workers
Workers without college degrees were this year’s big winners in terms of wage increases. Low-wage workers without bachelor’s degrees’ earnings rose significantly more than their wealthier, college-educated peers since the start of the pandemic—a trend that accelerated further in 2023.
“The disproportionate gain from this good labor market has been people at the low end of the income distribution,” Cornell’s Groshen said.
This is because a tight labor market – in which there are more jobs than workers – has meant that more people have changed jobs for better pay. And while workers without degrees generally start out at lower salaries than their more educated peers, they tend to see big pay jumps as they move from employer to employer, says David Autor, a professor of economics at MIT.
“The majority of workers don’t have a college degree, and the last 40 years have been really rotten for them in the American labor market,” Autor noted. “So this is a very positive development.”
Similar trends have held true across the board for historically marginalized groups, said Brett House, a professor of economics at Columbia University. This includes women, who were disproportionately affected by job losses in the pandemic.
“As labor market shortages have forced companies to offer better compensation and benefits packages, we’ve seen labor market participation continue to rise,” House said, “and that’s generally been beneficial for people who might otherwise face some discrimination . “
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