When many of Pennsylvania’s business leaders convened in Erie last week for the PA Chamber’s annual board meeting, optimism filled the air. In the 15 years since Erie last played host to the event, the city has undergone a remarkable economic resurgence through partnership and cooperation – a phenomenon that civic and business leaders in the region hope will serve as a model for communities throughout the Commonwealth.
Throughout the week, several of these leaders emphasized the interconnectivity of the local economy – describing it less like a competitive battlefield and more like a delicately-balanced ecosystem. Erie has always been a hardworking, blue-collar town. The city that once boasted a busy port and thriving manufacturing sector is now starting to attract the investment and capital necessary to evolve into a 21st-century hub for innovation and job creation.
However, the ongoing labor strike at Pittsburgh-based locomotive maker Wabtec (which employs 2,400 people in Erie) has prompted the community to consider what would happen if a pillar of the region’s business community were to close its doors.
In any labor dispute, it’s important to understand what each party wants. Wabtec has indicated it wants to manufacture and refurbish locomotives at the century-old Erie plant once owned by General Electric; striking UE workers presumably want to be back on the job, earning paychecks instead of strike pay. And Wabtec’s customers undoubtedly want an intact supply chain and the certainty of knowing when their orders will arrive. Behind the emotions fueling this strike, though, both sides need each other.
Economic planners rely on a concept called job multipliers to assess which industries and professions create or sustain employment in other job sectors. Employers can be considered effective job multipliers to the extent that they generate additional, ‘downstream’ job opportunities.
A recent analysis concluded that Wabtec’s operations in Erie directly sustain employment in the region by a factor of at least five-to-one. When the United Electrical, Radio & Machine Workers of America (UE) struck the plant in 2019, the Erie Regional Chamber and Growth Partnership calculated that 6,800 jobs would be affected by that strike – a $400 million blow to Erie’s economy.
This time around, the implications could be even graver: As Erie continues to navigate the complexities of the post-COVID economy, Wabtec stands as a key manufacturer and economic driver in the region. Anxieties are mounting that a strike-imposed closure of Wabtec’s Erie plant will wreak havoc on the local economy and community.
If that sounds like speculation, consider that when manufacturing boomed in the mid-twentieth century, Erie’s population swelled to nearly 140,000 residents. Shoppers lined the bustling downtown streets, and the community flourished as a result of abundant economic activity.
Today, Erie’s population has declined to 94,000, and the city has an increased level of poverty. To call this moment a turning point is to dramatically understate the case.
It is the nature of negotiations that neither side will be fully satisfied. However, in this case, neither side can afford to walk away from the bargaining table. The impact of a strike-imposed closure on this region, its employers, and its people would be far too devastating an outcome to accept.
Important stakeholders, including current and future customers, are closely monitoring this situation as they consider pressing purchasing decisions. Other stakeholders are also watching closely as they could love to recruit Wabtech to their location, which would be crushing for Erie and Pennsylvania.
Both parties must ask themselves: How long can this strike continue before it spirals into a plant closure?
Both sides should remain at the bargaining table. This strike can be settled, as we have seen with other recent high profile negotiations, so long as all parties commit to compromise. Wabtec has made it clear that it wants to remain in Erie. Now is the time for these parties to come together in the same spirit of partnership and cooperation that has helped positively transform Erie, to reach an agreement that will safeguard the region’s economic future.