Verizon Strike The Dark Side of the Good Economy

The Verizon television commercial opens with two men in dark suits standing far apart. Each represents a company. One GTE. The other, Bell Atlantic. The commercial continues as the two men move closer and blend into one, symbolizing the union of GTE and Bell into an instant leader in the telecommunications industry.

The ad campaign, which was designed during Verizon’s summer merger, did not contemplate that the company would become embroiled in a strike of its 87,000 telecommunication workers, affecting 50,000 residential and business customers.

In spite of putting 30,000 managers and retirees into operations, a backlog of nearly 100,000 repair orders left many customers no choice but to switch high speed Internet services in order to keep their businesses up and running.

A partial settlement has been negotiated between Verizon and the unions — The Communication Workers of America (CWA) and the International Brotherhood of Electrical Workers.

Details will be released once the remaining contracts are agreed to by the negotiating teams in Washington D.C.

Meanwhile, the Verizon merger ad continues to get national airtime, but its symbolism seems to have taken on new meaning. It underscores the difficulties presented when there is a merger of cultures and new business agendas. The two individuals also make a statement of oversimplification, underscoring the fact that Verizon underestimated the strength of its union base and the conviction workers would have for many of the deal-points on the bargaining table.

Although one of the provisions addresses the process of unionizing employees (voting ballots vs. cards), the remaining issues have broader appeal, affecting many businesses, industries and workers across the country:

• A shortage of labor — or lack of technically trained labor — has resulted in work speed-ups and mandatory overtime in order to keep up with customer demand. Stress has increased for workers, under the pressure of longer hours and less flexibility to manage family and personal obligations. The unions want to eliminate mandatory overtime.

• Merger restructuring has shifted work to geographical areas where labor is cheaper. This is both a wage and job security issue.

• Unions point to an increase of 10.6% in productivity and have sought pay increases and improved benefits commensurate to this higher level. Negotiators indicate that wage increases of approximately 12% have been agreed to.

• Following the trend to outsource, Verizon now subcontracts many areas of work. The unions are opposed to this practice.

• Workers want higher job standards and the ability to advance within their company structure.

Verizon will likely conclude negotiations with the unions shortly, but the dialogue is bound to reoccur in businesses across the country.

This is the dark side to the good economy: Companies struggle to recruit high-skilled workers. They shift products, work hours, and locations in order to meet competitive demands. The boost in labor hours and productivity has taken its toll on workers and their families. Full-time employees talk about the need for more work-life balance and benefits. The exodus of corporate employees to “Free Agency” is very often motivated by a desire for more flexibility as to when and where work is performed.

While unemployment is at 4% in many areas, there are specific communities where unemployment is still 8% or more. Outsourcing to remote locations and recruiting high-tech workers from all over the world — while leaving those nearby untrained — simply defers a problem for both business and labor in the long-run.

The disparity of cost-of-living in different areas and affordability of our most productive city centers makes standardizing wages nearly impossible. These problems, rooted in general demographic and economic conditions, are not likely to disappear anytime soon. Union and non-union shops will be interested in the outcome of the Verizon strike, as the topics mirror the employer/employee exchange of bargaining issues in the broader business sector.