A fracas in San Francisco has all the elements of a classic union-management standoff. It’s got headlines and picket lines, charges and countercharges, thrusts and parries. The whole thing is straight out of a keg-enriched clam bake to which both the Montague mob and the Capulet crew had accidentally been invited.
It is the happy-face hospitality industry, but smiles are scarce these days on the streets and sidewalks in front of San Francisco’s premier hotels. Represented by Unite Here Local 2, the 4,300 workers who normally staff these hotels have been locked out of their jobs for over five weeks now, and negotiations are at an impasse.
One of the things that makes this a classic confrontation is that it is a labor dispute about money, or at least that’s how it started. Before the labor contract expired in August, and even for a while after that, the talks had the usual items up for discussion: wage boosts, health and pension benefits, and that sort of thing. And while there was not any great meeting of the minds – this was a labor contract negotiation, after all, not an ice cream social – they were still talking. Then the rhubarb started.
The union decided that it couldn’t accept the proposed concessions on health care and pension benefits. And for its part, the hotel management didn’t like the union’s demand to time the expiration of the contract to coincide with other hotel union contracts in nine cities across the nation.
That derailed the talks. The union declared a strike at four of the hotels. In response, 14 of the city’s hotels announced a lockout. Great unhappiness befell all, including the hotel guests who had to endure shouts and menacing picketers in order to enjoy their stay.
The direct, bread-and-butter economic issues behind the management-labor conflict are straightforward enough. Tourism in San Francisco has not yet fully recovered from the effects of the 9-11 attacks. The hotel industry, beset by low occupancy rates and problems, was increasingly fixated on its rising costs for energy, insurance and taxes, and felt it needed to contain its labor costs as much as possible.
On the worker side, the main issue was, and is, the cost of living. San Francisco is one of the most expensive places to live in the entire country, and while wages are generally higher there, housing costs are out of balance with the income of ordinary wage earners. Of course, it is precisely those ordinary wage earners who are needed by the hotels.
By themselves, the economic issues didn’t present an insurmountable obstacle. In fact, it looks a lot like a textbook- perfect example of the prelude to a successful collective bargaining agreement.
But the economic issues weren’t left alone. They were quickly surrounded by things that were much tougher to negotiate. Whatever the tactical merits of the union’s calling a strike, for example, it drew in the city’s camera-ready mayor, Gavin Newsom. This didn’t help.
For some reason, Newsom decided to throw in with the workers, and even joined their picket line briefly to emphasize his antipathy toward the hotels’ management. He demanded an immediate end to the lockout and threatened a boycott of the hotels as far as scheduling any city functions there. His rhetoric may have inspired city supervisor Tom Ammiano’s move to encourage an end to the lockout by threatening the hotels with reduced municipal services.
And just to show that it, too, could make things worse, the union thought it would be a good idea to crystallize management’s apprehensions about facing a larger, multistate labor union. Unite Here sent 20 workers to Hawaii to set up picket lines at two Sheraton hotels there, just to make its point.
Where it goes from here is anybody’s guess. But it is clear that while Newsom may have gotten some political benefit from his photo op with the striking workers, he probably cost them a lot in terms of lost wages, and perhaps even lost jobs. He ruined any chance of his brokering an early settlement, because he gave up any pretense of helping both sides reach a settlement by representing the broader and best interests of the city.
Management and labor negotiators in this dispute have their work cut out for them. But in a broader economic sense, the San Francisco mess should make us stop and think about what role municipal government should take in our economy. As things stand now, it would seem that the burden of proof is on Newsom to show how open hostility to business somehow improves the collective bargaining process in particular and the economy in general. We’re listening.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101,” which appears monthly in The Snohomish County Business Journal.
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