The recession could possibly be a serious handicap for Starbucks and Amazon unions

The union movement, launched across the country more than a year ago, has continued its momentum in 2022, with workers in warehouses, cafes, grocery stores and airlines pushing for representation.

Working conditions during the pandemic prompted many of these frontline workers to organize, but fears about the economy and a possible recession could slow the union boom if the labor market shifts.

Unions can help workers secure better wages, hours and job security through contractual agreements, but some organizers claim their employers are taking revenge and threatening their livelihoods.

Workers like Robert “Rab” Bradlea, 32, are willing to take the risk despite recession talk. Bradlea reduced his hours at Trader Joe’s Wine Store in New York City and took a second job when he and some of his colleagues were trying to unionize.

Bradlea said the move to organize under the United Food and Commercial Workers International Union had the support of most of his staff. Some refused to join a union, either because of past experience or fear of losing their jobs. But Bradley thought only he and his fellow organizers were putting themselves at risk.

“I thought they were going to look for ‘bad apples’ and target organizers rather than torching an entire store,” Bradlea said.

Instead, Trader Joe’s abruptly closed the location on August 11, before the beloved wine shop could even petition for union elections, and notified employees the same day. Trader Joe’s spokeswoman, Nakia Rohde, said in a statement to CNBC that the grocer decided to close the “underperforming” store to support its Union Square grocery store by using the wine store’s premises ahead of the holiday season .

The union boom of 2022

So far this year has proved a success for the labor movement. According to the National Labor Relations Board, union petitions from October 1 to June 30 rose 58% year-on-year to 1,892.

By May of this year, petitions for the year had exceeded the total number of submissions for all of last year. The NLRB has yet to release full-year data, but a CNBC analysis of filings shows that fiscal 2022 received nearly 900 more petitions from last year’s numbers.

This comes at a time when public support for unions continues to rise. Recent Gallup data shows that 71% of Americans now support unions, up from 68% last year and 64% before the pandemic. The measure is at its highest level since 1965.

The job market, particularly for retail, accommodation, hospitality, and transport and warehouse workers, still favors workers, with a combined 1 million more job vacancies in these three sectors today than before the pandemic.

“Right now in retail we have so many more jobs than workers and that gives us disproportionate power right now because the company needs them almost as much as we need them,” said Hannah Smith, an employee at the recently unionized REI- Store in Berkeley, California.

REI did not respond to a request for comment from CNBC.

The shift in power has prompted some employers to raise wages and improve other benefits. For example, Amazon said on Wednesday it was raising the average hourly wage from $18 to more than $19 for warehouse and delivery workers. The announcement comes ahead of the annual Prime Day promotion and a busy holiday season and union election in Albany next month.

As the Federal Reserve continues to aggressively raise interest rates to fight inflation and cool the economy, market watchers, economists and executives are warning of a possible recession in 2023. If the economy cools, the union movement could follow suit, according to Catherine Creighton, director of the department of industrial and labor relations at Cornell University in Buffalo. But in the short term it seems unlikely.

“I think it will certainly be more difficult when we have a recession where it is more difficult for employees to find other employment, they [may] less likely to take the risk of unionizing,” Creighton said. “I don’t see that we’re in that position at this point because employers are still having a very hard time filling vacancies baby boomers are retiring and all the evidence is pointing to the labor market in the near future will be favorable for workers.”

For now, proponents believe the momentum will be difficult to stem. From petitions to other gains, like a California law creating a council to regulate working conditions in the fast-food industry, 2022 was a stellar year for organizing.

“I think it’s the collective action you’re seeing that can’t be stopped by the recessionary forces as working people have walked through fire during this pandemic, turned up for work every day and in many cases are risking their lives.” , said Mary Kay Henry, President of the Service Employees International Union, “And they are willing to expect more in their working lives and to demand dignity and respect at work.”

Starbucks petitions are slowing down

Some employees say interest in organizing has waned somewhat as their employers appear to be fighting back, using tactics such as closing stores, firing organizers and offering enticing benefits only to non-unionized workplaces.

At Starbucks, for example, the number of union petitions fell every month from March through August. According to the NLRB, there was a slight increase in September with 10 petitions filed so far.

Since interim CEO Howard Schultz returned to the company in April, Starbucks has adopted a more aggressive strategy to resist the union push and invest in its workers.

In May, the company announced improved wage increases for non-union shops and additional training for baristas, which went into effect in August after holding feedback meetings with its employees. The union has said the coffee giant is illegally withholding inducements from cafes, but Starbucks claims it cannot offer new inducements to union stores without negotiations. Legal experts assume that the performance dispute will end before the NLRB.

“Our focus is on working directly with our partners to reshape the future of Starbucks. We respect our partners’ organizational rights, but believe that working directly – without third parties – is the best way to improve the partner experience at Starbucks,” Starbucks spokesman Reggie Borges told CNBC.

Tyler Keeling works as a barista trainer at a unionized Starbucks in Lakewood, California, and also organizes other deals with Starbucks Workers United. He said the additional benefits not offered to unionized shops have both intimidated and motivated people and that better pay is important in this economic climate.

“People see that Starbucks is willing to play around with their livelihood to prevent this union, and that scares people,” Keeling said.

He added that he believed that once the union made further progress on reinstating laid-off workers and it was successful in extending the benefits to union stores, there would be more progress on petitions.

And despite the looming recession, business is still pushing for more. Billie Adeosun, Starbucks barista and organizer in Olympia, Washington, said unionization is a “big risk” and claiming losing the job is a “real possibility” but the prospect of successful contract negotiations with better pay and benefits be a motivator.

“Most of us make $15 to $18 an hour and none of us work 40 hours a week and that’s just not a living wage,” Adeosun said. “A lot of us have to take on a second job or rely on government assistance to pay our bills, so yeah, we’re afraid to do that work despite the economy and the fact that it’s collapsing right in front of us.”

About 240 locations of the company’s 9,000 cafes voted to unionize on Sept. 22, according to the National Labor Relations Board. But contract negotiations could help or hinder an attempt to unionize the country’s largest coffee chain.

Hannah Whitbeck (C) of Ann Arbor, Michigan, speaks while Alydia Claypool (L) of Overland Park, Kansas, and Michael Vestigo (R) of Kansas City, Kansas, all say they were fired from Starbucks during the Fight Starbucks’ Union Busting rally and march in Seattle, Washington on April 23, 2022.

Jason Redmond | AFP | Getty Images

BTIG analyst Peter Saleh said signs of progress on a deal between the union and Starbucks could be a catalyst to speed up organizing again. On the other hand, if workers fail to reach an agreement, they can vote to de-certify the union after one year.

So far, Starbucks has only begun dealing with three stores, two in New York and one in Arizona. But the company said Monday it had sent letters to 238 cafes where it was offering a three-week window in October for negotiations to begin.

And despite the slowdown in the petition at Starbucks, the organizers’ success has inspired workers elsewhere, like Bradlea, Trader Joe’s employee.

“Your shops have about the same number of people as Trader Joe’s wine shop. It’s doable and they’re succeeding at it,” he said.

power in balance

Even amid talk of a possible recession, some workers say the competitive job market is undeterred. Brandi McNease, organizer at a now-closed location of the Chipotle Mexican Grill in Augusta, Maine, said the decision to petition was driven by worker power and the current economic climate.

“We looked at the endless job vacancy signs posted on every fast food drive-thru menu and decided we could just quit and take another job or fight and if we lose we always take another job,” McNease told CNBC in an email.

The store was the first to petition the burrito chain for a union election, and the company said the location closed permanently because of staffing issues, not because of the union’s petition. The workers have described the move as retaliation and have filed multiple complaints with the NLRB alleging unfair labor practices against the company, McNease said.

Chipotle declined to comment.

Some workers say the last recession highlighted the need for better worker protection today and now is the time to work towards it.

“I had co-workers who were going through the 2008 recession and they were having a really hard time finding a job,” said Smith, the REI California staffer. “Forming a union now felt like a way to protect against it in the future.”

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