Striking Workers Could Soon Qualify For Unemployment Benefits

Many workers who go on strike could soon gain a new bit of leverage against their employers: unemployment benefits.

Lawmakers in several states are considering the novel approach of extending unemployment insurance to workers who hit the picket lines, saying it would help level the playing field with deep-pocketed companies that can starve their workforces in contract fights. Strikers do not qualify for such benefits in the vast majority of states.

That includes Washington, where progressive legislators are looking to change the law. Last week, the state’s House of Representatives passed a bill that would qualify strikers for unemployment benefits starting the second Sunday after a walkout begins, with payments capped at four weeks. The legislation is now up for debate in the state Senate.

State Rep. Beth Doglio, an Olympia Democrat and the lead sponsor for the House bill, called it “a very small step in the right direction.” She noted that roughly 400 Starbucks stores in the U.S. have unionized since 2021 but still don’t have collective bargaining agreements with the Seattle-based coffee chain. Many have gone on strike to pressure the company at the bargaining table.

“When you go into a strike, it’s a last resort,” Doglio said in an interview. “This just gives a little bit of assurance that they [workers] can continue to feed their families and keep a roof over their heads while their negotiators are at the table.”

Business groups have come out in opposition to the proposal, arguing that it would raise insurance costs for employers and give workers unfair leverage in bargaining. Five of Washington’s House Democrats joined Republicans in voting against it.If the legislation makes it to the desk of Democratic Gov. Jay Inslee, it could spur more states to pursue similar policies.

At least seven other states have introduced similar bills in the past two years, according to Daniel Perez, an analyst who’s been tracking the issue for the left-leaning Economic Policy Institute, which supports the policy. These include California, Connecticut, Illinois, Maryland, Massachusetts, Ohio and Pennsylvania. The Maryland bill was unveiled just last month.

“It seems like a groundswell moment,” Perez said. 

Only two states currently extend unemployment benefits to strikers: New Jersey and New York. Last year, New Jersey reduced the waiting period for benefits from one month to two weeks; a bill introduced this year in New York would reduce it there from two weeks to one.

A bill similar to Washington’s passed both chambers of California’s Legislature last year, but Democratic Gov. Gavin Newsom vetoed it, saying that it would be too costly and burden the state’s unemployment insurance trust fund. The State Assembly’s Appropriations Committee estimated the cost to be “likely in the low millions to tens of millions of dollars.”

The legislative efforts come at a time when strikes are seeing a modest resurgence in the U.S. economy. Last year there were more major work stoppages involving at least 1,000 workers than in any other year since 2000, according to the Bureau of Labor Statistics. Well over a half-million workers overall went on strike in 2023, including actors, writers, nurses, baristas and autoworkers, among others.

But striking can be a daunting proposition. 

Most unions have strike funds to help keep workers afloat while they’re off the job, but strike pay is often less than half of one’s normal wages. Many workers end up tapping into their savings or picking up shifts at lesser-paying jobs to make ends meet. The financial insecurity can make it hard to dig in for an extended period and sometimes leads workers to accept subpar arrangements.

Autoworkers were among the more than half-million workers who went on strike in 2023.

Unemployment benefits could change workers’ calculus. Like strike pay, the benefits typically only cover a portion of a worker’s lost salary. But the additional money could enable them to hold out on strike for a better deal — or pressure an employer to reach a deal sooner, knowing that workers have a more robust safety net.

Doglio noted that benefits in Washington state top out at around $1,000 a week, and lower-wage workers would collect much less.

“It’s still not a happy thing to go on strike,” she said. “I don’t think this is going to be a make-or-break in terms of whether workers will.”

Bob Battles, the director of government affairs for the Association of Washington Business, an employer trade group, said that strikers shouldn’t receive benefits because striking is a choice. 

“We believe that the use of unemployment insurance for the purposes of striking workers fundamentally goes against the underlying principle of what the [state’s existing unemployment] statute is about: to reimburse employees … when they lose their wages through no fault of their own,” Battles said in an interview.

Under Doglio’s original bill, the cost of benefits for strikers would be socialized — i.e., spread across all employers paying into the unemployment system. An amendment changed the bill to steer the cost expressly to the employers involved in strikes.

Although there’s been a recent upsurge in walkouts and labor activism, the number of striking workers these days is small compared with the 1960s and 1970s, when union density was much higher. Only 1 in 10 workers belongs to a union today, compared with 1 in 3 in the years following World War II.

Perez of the Economic Policy Institute noted that the majority of strikes last only a few days, and so most workers wouldn’t even qualify for benefits under the proposed legislation. A lot of unemployed workers don’t bother navigating the red tape anyway.

“Even when workers are eligible, they don’t always take up those benefits,” he said.

Washington’s Employment Security Department estimates that Doglio’s legislation would lead to between just 812 and 3,470 additional claims a year, raising the state’s unemployment payments by less than 1%. Those figures are extrapolated from claims filed in New Jersey after that state passed its law entitling strikers to benefits. Battles said that the estimate discounts the possibility of a large and long strike involving tens of thousands of workers.

For employers with unionized workforces, the prospect of unions gaining more leverage in negotiations is probably a greater concern than higher unemployment insurance costs. If workers have a better financial cushion while striking, companies are more likely to meet their demands on wages and benefits sooner rather than later. Backers of the Washington bill argue that this dynamic would encourage productive bargaining and help prevent strikes to begin with.

That’s probably little consolation to a company as powerful as Boeing, which is gearing up for a massive contract fight this year with its largest union, the International Association of Machinists and Aerospace Workers. Union members could demand pay increases as high as 40% from the aerospace manufacturer. They are already planning a strike authorization vote for July.

Boeing hasn’t weighed in publicly on Washington’s unemployment insurance bill, and the company declined to comment. But Doglio said that the company wouldn’t be pleased about it.

“They are definitely concerned,” she said.