The film and television industry in the United States remains paralyzed, as screenwriters have been on strike for over 100 days. Actors have joined the fight, creating the first dual strike since 1960, according to the Associated Press. The Hollywood Reporter says that studio executives are only beginning to acknowledge the financial impact – while Netflix stock continues to trend upward. Meanwhile, in Michigan, the Big Three automakers have backed off from bargaining with the United Auto Workers, citing unrealistic worker demands. The contract for the workers expires on September 14, and a potential strike for 146,000 UAW workers looms large. In Texas, a walkout at American Airlines is unlikely, but 99% of flight attendants have overwhelmingly voted for a strike. Transportation, entertainment and manufacturing are just three of many industries facing strikes, as union workers demand more. Are corporations – and corporate leaders – unable to empathize with the plight of the overworked workers? Would greater empathy make a difference? Or are these worker demands unrealistic – and unprecedented?
Higher Wages, Better Perks – Is That Really Sustainable?
Empathy – the ability to see, understand and acknowledge another person’s situation and feelings – is a valuable trait for leaders. However, empathy is not what drives business decisions – at least, not entirely. Consider the recent results for American Airlines pilots, who received an average pay increase of 40% over the next four years. Did American CEO, Robert Isom (2022 compensation: $4.9 million) suddenly become more empathetic to the plight of pilots? Consider that other factors may have been at play, at the bargaining table.
United pilots had already reached a similar compensation agreement, forcing American to match salaries – in much the same way that airlines must match fares between cities. No parity, no passengers. Economics professors call this the “kink demand curve” – airlines have to match rates, or risk losing market share. In that same vein: without parity, no pilots. Proving the point, pilots at Southwest are already making plans to renegotiate, and United flight attendants recently picketed in 20 cities.
Patricia Campos-Medina, executive director of the Worker Institute at the School of Industrial and Labor Relations at Cornell University, reports that the number of labor strikes rose 22% in 2022. She tells the Associated Press, “We started to think, ‘I’m at home ordering, but there is actually a worker who has to go the grocery store, who has to cook this for me so that I can be comfortable.’” Do you stop to consider what it takes for you to get your food, or to watch Netflix, or to purchase new clothes? Are you focused on the barista, or on your latte, when it comes time to create a transaction?
Seems that we are all focused on getting what we want, with little regard for what people must endure in order to provide it. That’s true in the coffee shop, in the boardroom, and at the bargaining table. Empathy allows us to see another person’s point of view, and it seems to be in short supply.
Empathy Versus Profitability
The fact is, consumers want what they want when they want it. Most people don’t care about how you make the sausage. But what might happen if we did? For business leaders, creating shareholder value is paramount. However, that value – that profit – can’t be created without the input of the people in the organization. In this age of increased executive pay, are worker demands really so outrageous?
The Economic Policy Institute reports that CEO pay has increased over 1,300% since 1978 – mentioning that the average CEO was paid 351 times as much as a typical worker. (In 1965, the ratio was 15:1, and in 1989 it was 45:1). Meanwhile, Morgan Stanley reports that the S&P index has climbed 20% from its October 2022 low. Workers cite these statistics, and others, as evidence that it’s time to bring some fairness and sharing to various industries. Would greater empathy help to resolve the wage inequality, stop the strikes, and create greater shareholder value? Not necessarily. Because capitalism isn’t about egalitarianism – or empathy.
“It Seems Impossible. Until it’s Done.”
Empathy isn’t going to drive new contracts, or resolve labor disputes – but it can help. Without empathy, we find ourselves where we are now: undervaluing employees, engaging in disputes, seeking ways to meet new demands. Executives have to realize that, at least for now, people still make a difference. And making a difference for people – in terms of paychecks and quality of life – may seem impossible, at first. That’s why the words of Nelson Mandela remind us that we achieve the impossible, every day: “It seems impossible. Until it’s done.”
With adaptability and new realizations, new terms can be reached. Compromise can be created. Opportunities – even opportunities for greater empathy – can create greater benefit. In the salary debate, understanding negotiation, market factors and the underpinnings of business will always make an impact. Systemic changes can only happen when you understand the system, as it is now. Inside these strikes and labor challenges, it’s useful for negotiators to remember the YAHOO strategy: you always have other options. Insights into human nature, including our ability to empathize, can help guide the conversation. Because seeing new possibilities is the key, in any labor dispute – especially when you can empathize with everyone involved in the conversation.
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