Economic Update: Surging US Labor Activism

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In this week's Economic Update, Prof. Wolff discusses explosive labor militancy across 2022 in US and UK, Wells Fargo bank again fined for illegal practices on 16 million bank customers, US-Russia economic warfare undercuts European economies whose response will likely shape Ukraine War's results. In the second half, Wolff interviews journalist Bob Hennelly on the rising US labor movement.

Transcript has been edited for clarity

Welcome friends, to another edition of “Economic Update,” a weekly program devoted to the economic dimensions of our lives and those of our children. I am your host, Richard Wolff.
I want to begin today's show with the topic of the labor movement in the United States: the explosion, the surging of labor militancy that we have not seen for decades in the United States, and that promises to be a historic change unfolding in front of us. I am going to begin by looking at a number of signs of this to drive home what is going on in the United States. Then, I am going to talk briefly about the United Kingdom. I could have picked other countries of course, but I am focused, at least, initially, on them.

First, in the United States, we had huge victories of labor organizing that we have not seen before in companies that had boasted of how totally they had prevented that from ever happening or darkening their workplaces. You know the names: Starbucks, Amazon, many university boards, hospitals. I could go on. A real comeuppance for their lame promises to have controlled history. History is not being controlled by any of them. You know what is happening? Capitalism, which has provoked workers to struggle for unions for as long as it has been part of our history, and it has just come right back to show you it never went away. Huge wins were won by workers striking: the University of California, Minnesota nurses, the railroad workers who would have won, were it not for the intervention of President Biden (who had promised he would be a friend of workers but turned out to be one of those friends you do not need). There is a UPS (United Parcel Service) strike scheduled for 2023. There are lots more coming. Even when the settlements occur, more and more, there are sizable groups of workers who want to fight on, who want more. They are not going away. Cornell University's School of Industrial and Labor Relations produces something called the Labor Action Tracker. It reports that in the first half of this year 2022, 78000 workers walked off the job. In the first half of 2021, the preceding year, that number was 26000, tripling in one year. That is what is going on. By the way, the biggest strikes of 2022 were in the second half of the year. The numbers have only begun. They are going to be more impressive.

Workers are rediscovering militancy. What it means if you really get out there and struggle. They not only won more than their employers offered but they also discovered that even when they win more than the employer offers, the employers are offering so little that they will not even be able to keep up with inflation with the wins that they chalked up. That is a very important lesson: they have got to do more than beat the employer. They have got to change the larger society, if they are going to make the advances they and their families need. It also has led to many of us reimagining the strong coalition with social movements that the labor movement can now fashion. Then it can achieve something comparable to what unions achieved in the 1930s: the Social Security System, unemployment compensation, the first minimum wage, a government jobs program. They got that in the 1930s because unions organized with social movements. In those days, they were called socialist parties and communist parties. Today, they have different names but the coalition is as urgent and as imminent as ever.

I want to come back to that decision by Mr. Biden, which is going to haunt him, of coming down on the side of the railroad companies against the workers. Very serious issue. It raises the question again of where the government falls and what workers have to do to make their situation better. Then we have the United Kingdom. They have a larger strike wave than we do here. Much larger: whole country is going up in strikes. A conservative government with the lowest approval rating imaginable, right up there with Mr. Trump's. They are similar to Mr. Biden even though they are conservative and he claims not to be. They are trying to come up with every way to stop the union, stop the strikes, penalize the workers, penalize the strikers, and prevent the strikes. This coming together of government and business to stop the labor movement, we used to call that fascistic, and maybe we should again.

My next update has to do with something that is old and something that is repeated. It needs to be exposed. So, I am going to do it again. This time, although it is not their first, it is the Wells Fargo Bank. They just got fined $1.7 billion for many years of illegal acts. This time, it was the Consumer Financial Protection Bureau in Washington that the Republicans consistently tried to prevent from being formed, closed it down, and limited its budget. It reported its investigation that Wells Fargo did at least the following: illegal, unjust foreclosure on people's homes; illegal unjust vehicle repossessions; illegal, unjust, incorrectly assessed fees; incorrect overdraft charges. I could go on and on. On how many accounts? Get ready, 16 million accounts. It was just a few years ago in 2016, Wells Fargo had to pay fines because they had created millions of fake accounts. They had pressured their clerks, giving them bonuses and so on, and punishment if they did not do it, for how many new accounts they could open. Then they made it so easy that the employees figured it out: ‘here is how we create a lot of accounts and beef up our low salaries.’ So, they did. Even the head of the Consumer Financial Protection Bureau allowed the following sentence to escape the mouth: “This behavior is like,” said this head of the bureau, “a rinse repeat cycle on a washing machine.” The company does something illegal; makes a lot of money doing it; gets caught; gets a little slap-on-the-wrist; pays a fine; looks big in the headlines; and then resumes doing that or something else like it; and gets fined again. As long as there is two or three years in between, maybe people will forget, and maybe they will not pay much attention. Maybe, you can keep the PR low. Maybe, you can follow, when you do this, with a big advertising campaign talking about your company's help for the environment. You have figured it out. You got the picture. By the way, this is not mismanagement. It is management. If it were ‘mis,’ it would not be happening over and over again. Wells Fargo is no way the only one, but Wells Fargo is a real winner at this rinse and repeat behavior. The logical questions that would arise would be: ‘why are we allowing these private bankers to rip everybody off consistently, again and again?’ Clearly, fining them, even when the fines are in the billions of dollars, is not working. It is not preventing these things from happening where everything that is listed here that Wells Fargo did has been listed against banks in this country over and over again. Overcharging for overdrafts. Are you kidding? Repossessing, messing up the paperwork for the mortgage. Come on! It is all the same. The logical thing would be: ‘let us not have it handled this way.’

Maybe the government should take over banking the same way the government takes over the postal system. Certain basic national services are to be handled by the government, so we have a direct responsible agency that is not in the business of making money for anybody. It is in the business of serving the public, which at least increases the probability that that is what they will actually do. This is called socializing or nationalizing the banks. Maybe banks should be run by boards: half of them elected by the workers there, and half of them by the communities that the banks serve. So, we make sure that the workers and those who are to be served, are the people who run the institution; not a third group whose only interest is pulling profits out of it. In other words, the problem is capitalism and letting capitalism run your banking system.
Our last update that we will have time for is about, of course, the great Ukraine war that is going on. I am not going to talk about the military aspects most of you know or follow. I think it is important to highlight something that is minimized in the press. The big issue, economically speaking, is not the war, serious and horrible as that is. The big economic issue is the sanctions: the decisions by the United States and Europe on the one hand to impose economic sanctions (admittedly called economic warfare on Russia); and, on the other hand, the decision by the Russians to counter sanction, to apply sanctions back on the United States and Europe. The major sanction the Russians can impose is, of course, withholding the oil and gas that they had formerly sold to the Europeans mostly, and which was the fuel that allowed the European economies to grow and develop. Here is what it means when you have a sanctioned economic warfare. Russia has been able to solve its problems, by and large, because it sells oil and gas somewhere else. It cannot sell it to Europe. It is withholding it, but the Chinese, the Indians, and a growing rest of the world are eager to buy oil and gas. They need it and Russia is selling it often at a discount, but at a price higher than they used to get. They are doing quite well. You can tell that because the ruble has not collapsed as many thought it would. The Russian economy has not gone into a tailspin as many said it would. None of that has happened. The real suffering is in Western Europe, the allies of the United States: Britain, France, Germany, Italy, all of them. They are paying record high prices for very scarce oil and gas because they do not get the cheap stuff from Russia which they relied on. They have to buy it very urgently from the United States, which is making money selling them at much higher prices than they charge at home. That makes the Europeans upset. They cannot afford it. The people of Europe cannot afford the energy to keep them warm in a very cold winter. Here is the reality. It is now a question of how long the European mass of people will tolerate the damage to their jobs, their incomes, the heat in their home, the gasoline running their car, you name it. How long will they tolerate a war that for them is far away and far less urgent than the immediacy of the life: impacts people had not thought about, but now they better, because that is probably going to determine when this war ends.

We have come to the end of the first part of today's show, which for those of you who may not know, is produced by Democracy at Work that is celebrating ten years of critical system analysis and visions of a more equitable and democratic world. For example, Stuck Nation: Can the United States Change Course on Our History of Choosing Profits Over People. It is a book by award-winning, print and broadcast journalist, author, and today's guest, Bob Hennelly. To learn more about this book and other work we produce, go to our website Democracyatwork.info. There, you can also sign up for our mailing list, follow us on social media, and more. Please stay with us. We will be right back with Bob Hennelly.

Welcome back friends, to the second half of today's economic update. It is my pleasure, once again, to bring to our microphones and our cameras, Bob Hennelly, a remarkable journalist, one whose work has brought him to our attention, over and over again, and now this time too. He is a remarkable journalist in both print and broadcast formats. His work has appeared in the New York Times, The Guardian, The Christian Science Monitor, a long list of publications. He has worked with a long list of broadcast media: CBS, WBGO, a long list. He is very well known now in New York City because he produces a program on the labor movement, today's topic for WBAI there. Finally, he is an author. His book is called Stuck Nation: Can the United States Change Course on Our History of Choosing Profits Over People?

First of all, Bob, thank you very much for your time and for joining us.

Hennelly: Thanks for that very generous introduction.

Wolff: Let us jump right into it. Everybody who pays attention, knows that over the last year, if not longer, we have seen a resurgence of militancy in the American working class: organized workers, in unions, and workers who do not yet have a union. Wherever you turn, in white collar, blue collar, east, west, north, south, we are seeing something happening in the labor movement. You have been covering it. Tell us what you think are the root causes of what is now an exploding labor movement.

Hennelly: It is an unprecedented, in modern times, almost anthropological event, set in motion by the mass death event that COVID has been. You have 1.1 million Americans, an undetermined number of whom were essential workers, perish in a pandemic, and millions more sidelined. You have a situation where the institutions of government and private employment failed spectacularly, despite decades of warnings and all kinds of white papers, to protect individuals from this infectious and difficult virus. As a consequence, individuals took note and the hierarchy of need that exists in all of us has been forever altered. We had to, all of a sudden, put our immediate household, our family, our loved ones, those of us who were in households that had multi-generational people, who had pre-existing conditions, our children, our very future, we had to put them into a new constellation, which puts capital below human need. This blows the mind of a system that has been arranged as a pyramid for a very long time where money was the only enduring value.

Wolff: For you, we are seeing, in a sense, the expression of something very deep in our in our lives, in our culture, in our society. Let me let me move on with this. What are the people at the forefront (the union activists, the labor activists, the workers who react to the very thing you just said by beginning to want to change the society), how do they react to something like the decision of the Biden administration to disallow railway workers the right to strike? There is a clash here of something very fundamental. I wanted to know your thinking about that because I know you have been talking to people in the labor movement about that important event.

Hennelly: The labor movement, the professional labor unions, large-scale institutions are equally upended by this. Do not think that they are somehow not caught up in it. In fact, they are struggling to keep up with the militancy of the masses. It is important to understand that in the last year, the Bureau of Labor Statistics told us that 47 million people left their current employment to do something else. That is a movement of humanity you can see from space.
So, these institutions are struggling to be relevant because often they failed on the job in protecting their members. We have at the same time, an eternal struggle within these unions who are having problems with gender diversity, with racial inclusion before the pandemic. Now they are trying to come up with the plan B. We are seeing ascendancies of people like Sarah Nelson, CWA flight attendant, who tend to be a bit to the left, more of a militant who has talked about a general strike during the Trump administration shutdown of the federal government. Mary Kay Henry, SEIU, committed to trying to get involved with workers outside the union movement to bring and create a greater union movement. That is happening at the same time.

Now when you talk about this rail strike, it is important to understand that there are around 120,000 rail workers. Something called the Railway Workers United came together, which is a consortium of 12 different crafts. I was a former Erie Lackawanna crew caller. I come from a railroad family. We suffered from having this craft division because it takes a lot of different skills to keep a train running steel on steel. There has been a thing that came together out of the pandemic where everybody, all of a sudden, said: “Wait a minute, we are essential workers on call, 24/7.” What a lot of Americans do not realize is that in the 1980s, we had 47 class-one railroads. Today, we have seven. We have now replicated the very robber-baron circumstances of monopoly and avarice that were on this earth at the time of the Triangle Fire. In that period of time, what Wall Street has done is that they took over the railroads, laid off about 30 percent of the workforce, and reaped $120 billion over the same period. They are driving that workforce into the ground where they are denying them basic sick time. That is something that Biden did with the election looming. He did this high-profile “We have saved the day.” It was time, so that the details became apparent after the election, ha ha ha! that the workers had had this pay hike, but it did not include paid sick time. Immediately, when this became clear, (because there was supposed to be a strike in December in the Brotherhood of Locomotive Engineers and Trainmen, 28,000 national union), they deposed the long-time incumbent almost overnight. Gone! Replaced by somebody who had really come from nowhere but came with a more militant sensibility. That is the kind of pressure. We are just talking about the railroads.

Wolff: You think that something is underway that is going to continue. In other words, we are going to see a continuation of these kinds of challenges to the rather cozy, let us call it, quiet that existed in the labor movement in relationship to the employers before. Tell me a bit more if you can, if you are not revealing anything, who are the labor leaders that, in your judgment, are most in tune with, most responsive to this upsurge in the labor movement. You mentioned Nelson. Who else?

Hennelly: It is important to talk about the unions as institutions (we did mention the personalities) that by dint of their structure might be better positioned to deal with this challenge. Unions like the Communication Workers of America (CWA). It has been my experience that there is an investment in educating and interacting at the rank-and-file level. As a working reporter, if I go to a CWA event anywhere in the country, I am likely to find a very well-educated rank-and-file member that I can put on tape. I do not have some mid-level business agent making a hundred thousand dollars a year saying: “Do not talk to that rank-and-file. Here is the person we want to talk to the media.” Similarly, with Service Employees International Union (SEIU), I get the same kind of sense that, across the board, you have this development of the rank-and-file. A new test for the 21st century is developing leadership at the rank-and-file level that affirms their vision and does not become so classified that it replicates the very oppressive nature of the capitalist system itself.

Wolff: Do you get the feeling that the workers (like the ones you are talking to) have, themselves, a feeling, like you do, that there is something fundamental and big going on, and that they are being caught up in a history-making kind of change?

Hennelly: Where it is pronounced is the fact that (there is a little bit of dissonance) the experience of working people and essential workers has never been more at odds and disconnected from the national government. That alienation is continuing, which makes things kind of unstable. We just passed a $1.7 trillion omnibus budget, which is so hostile to working people that in the midst of an ongoing triple-demic now (with COVID, pediatric respiratory syndrome, and flu at record levels), we are seeing the government giving the all clear from the pandemic, making it easier for states to throw people off of Medicaid, while there is a wholesale orgy for defense spending, well beyond what is talked about for the Ukraine. I knew this kind of came together when the World Trade Center Health Program 9/11, which was created to deal with the tens of thousands of first responders and civilians who responded to Ground Zero, who when the EPA said the air was safe to breathe, found out it was not. Thousands died. More have died from occupational exposure. The federal government would not even renew the long-term funding required for that. Usually, fire unions are very conservative, and are very close to the military and para-military organizations. Even they are questioning the spending on weapon systems when you do not have this basic public health protection that we need with health care in place after learning all we should have learned from the pandemic.

Wolff: I do not mind commenting that the history of the collapse of empires is when they spend more and more money trying to hold on to their distant controlled areas, and neglect the realities at home. Those neglected realities become much more of a danger and in the end dissolve the empire with all the legions far away that cannot help them anymore. It is so classic!

Let me ask you another question. We have seen in America, over the last 10 or 15 years, quite a surge of social movements around racial issues, gender issues, Me Too, Black Lives Matter, all of that. Is there, in your mind, any sign of a coming together, a coalition emerging between the social movements and this new movement among working people? In other words, the labor movement and the social movements, who were so effectively allied back in the 1930s, is something like that happening again?

Hennelly: One place it manifests is in the immigrant rights movement. Historically, (and you have covered this) there was an alienation between nativist trade unions who always saw immigration as replacement labor. Successfully, capitalism has played these interests off against each other. I am seeing points getting on the board in places like Newark, New Jersey. The SEIU-32BJ building service workers (working in coalition with faith groups and with locally based immigrant rights groups) held back Amazon when they wanted to get a sweetheart contract deal with the Port Authority of New York and New Jersey. They were going down at the granule level and letting people, where they live, determine the agenda to move forward, and that endures.

Wolff: Thank you enormously. Let me say, very realistically, I am going to want to bring you back because I need our audience to get an ongoing sense of how this is emerging because it is historic. As always, I look forward to speaking with you again next week.

Transcript by Asma Siddiqi

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About our guest: Bob Hennelly is an award winning independent journalist focusing on labor, public health, the economy and the environment. He is a regular contributor to Salon, InsiderNJ, City&State, the Village Voice  and Work-Bites.

He’s also a veteran broadcast journalist who has filed stories for NPR, WNYC and WBGO, the NPR jazz station in Newark, NJ.

He’s worked for CBS MoneyWatch and CBS’s 60 Minutes.

He hosts a weekly radio program on WBAI that focuses entirely on the issues of working people. His work has appeared in the NY Times, the Detroit Free Press, the Guardian, the Christian Science Monitor and dozens of other news outlets. 

Bob is the author of his new book, just released and published by Democracy at Work: "Stuck Nation: Can the United States Change Course on Our History of Choosing Profits Over People?" available at www.democracyatwork.info/books

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  1. Record strikes, unionization across 2022: https://www.axios.com/2022/12/19/worker-strikes-surged-in-2022
  2. UK: https://www.ft.com/content/013c8814-5642-44b3-9801-e987c5f48b11
  3. Wells Fargo: https://www.cnn.com/2022/12/20/investing/wells-fargo-cfpb-foreclosure-fine
  4. Poland and Germany put in requests for Russian oil: https://www.reuters.com/business/energy/russias-transneft-receives-polish-german-requests-oil-tass-2022-12-20/

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