Economist weighs in on potential John Deere employee strike

A strike deadline is set for Wednesday at 11:59 P.M.
Published: Oct. 12, 2021 at 11:52 PM CDT
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DAVENPORT, Iowa (KWQC) - After an overwhelming rejection Sunday by UAW members to turn down new terms on a contract between the union and John Deere, both sides have until Wednesday at 11:59 P.M. to reach a new deal in order to avoid a strike. This would be Deere’s first strike since 1986.

Following Sunday’s vote, Iowa State University Economics Professor Peter Orazem had multiple takeaways from the voting results.

“One view of that is the union leadership did a really poor job of negotiating, the other is they did a really good job of setting the stage for knowing it was going to be rejected,” Orazem said, ”So when you get such an overwhelmingly negative vote, that suggests that labor is serious about what they’re negotiating for and you suspect that the management is going to be looking at that and saying ‘well, you know, we have to come through with a much better offer.’”

Orazem said the union is in a strong position to negotiate thanks to a handful of factors.

“This is a particularly good time for labor to be negotiating, John Deere is having trouble filling positions, they’re coming off of a more than two-fold increase in the stock price of their pre-pandemic levels,” Orazem said, “We used to have three-to-four million job openings a month, we now have three-to-four million unfilled new job openings a month and so you know that firms are in a weak bargaining position when it comes to negotiating with labor.”

The professor cited current inflation rates as to why negotiations are crucial right now.

“With uncertainty about inflation, you’re going to have a lot more disagreement about what the right wage ought to be,” Orazem said, ”That’s going to create conditions for strikes certainly because labor and management aren’t on the same page.”

As for whether a strike will happen, Orazem believes the possibility is there.

“Are they going to go on strike? Well, sometimes you want at least a short strike just to show that you can,” Orazem said.

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