Belonging to a union can come with many advantages, such as higher pay, better benefits, and a system for recourse if you have a problem with your employer. But it also means that you may find yourself affected by a strike. During a strike, you cannot work and your employer will stop paying you. If the union and management can’t reach a deal, the strike may stretch on much longer than anyone wants. If you are a union member, you should plan ahead for a strike so that you know how you will manage if one does happen.
How Strikes Work
A strike is the last resort a union can use when management refuses to agree to its demands. This means you’ll usually have some advance warning one may happen, as negotiations between the union and your employer break down. The union membership will vote to authorize the strike. Even if you vote against the strike, if the vote passes, you will still have to strike. Unions normally blacklist “scabs”—people, whether in the union or not, who work during a strike. That is because the strike isn’t effective unless everyone participates.
Once the strike begins, everyone will stop going to work. The union will instruct you in what you should and should not do in the meantime. You may be advised not to respond to company emails, not to catch up on take-home work, or not to promote the company. Union members may turn out to picket outside the company, or they may have a “sit down” strike where they show up to the workplace but don’t do any work.
Your pay will stop coming during the strike. The law forbids your employer from revoking benefits like health insurance, but you may or not be able to actually use those benefits during a strike. Your union can explain what forms of compensation will and won’t be affected. Also, since a strike is considered voluntary, you won’t be eligible for unemployment benefits.
How to Manage During a Strike
Without your regular paycheck, things will get tight for a while. The shorter the strike, the better for both you and your employer, so there’s a strong incentive for the union and the company to come to the table and hash out a deal. However, sometimes a company tries to wait out a strike, hoping the union will give up when members run out of savings. In that case, you may be without your income for months.
Many unions manage this problem with a strike fund. Each union member will receive a certain amount weekly or monthly to help them get by. It might not be what you usually make, but it can help cover essentials. Other unions offer low-interest loans to members to cover their needs.
While the strike goes on, you likely have extra time on your hands. That makes it a great opportunity to work on a side gig or temporary job. This could be in a completely different industry, like driving for a rideshare service or bagging groceries, or it could use your work skills so long as it isn’t for any company the union is striking against. Your coworkers might have good ideas for how to make a living during the strike.
The rest of your expenses will have to be covered by a combination of savings and debt. Pull from savings accounts first. After that, a low-interest credit card, personal loan, or home equity line of credit might be a good resource. Avoid pulling from your retirement fund unless there is truly no other option.
Preparing for the Next Strike
The best time to prepare for a strike is long before it starts. Luckily, the same preparation you would do for any emergency works here. First and most important is to keep enough in your emergency savings account for 3-6 months of expenses. It will take time to build up that much. Make funding your emergency savings account a monthly priority until you have a comfortable buffer saved up. And, any time you must withdraw from this account, replenish it as soon as you can.
The next important step is to improve your credit. The better your credit, the easier it will be to get a loan and the lower your interest will be. You can improve your credit by paying down credit card balances, setting up reminders so that you always pay your bills on time, and having lines of credit open. This might be a secured credit card or a credit-builder loan. Ironically, credit bureaus reward you for borrowing money, so long as you pay it back promptly. Even having a card that you don’t use at all helps improve your credit.
It won’t hurt to craft a sensible budget you can stick to. This makes it more likely that you will meet your savings goals, plus it makes it easier for you to see which expenses you can cut in case of a strike. Your essential expenses, like rent, health insurance, and food will remain the same. But any budget categories you mark as discretionary can be reduced or even eliminated in a pinch.
Talk to an Expert
If you’re a union member, you may find it useful to talk to a professional about how to best use your union benefits and how to prepare for a strike. An expert financial advisor can walk you through the possibilities and help you may a roadmap to reach your goals. We can connect you with a skilled professional when you contact us.