Unionized Banking in the USA
Those of you who follow Timyan Bank Alert closely, know that I'm on a tear about unionized banks in the US.
Evaluating Amalgamated and AmeriServ's respective performance in the context of unionized banking has me seeing the recent Wells Fargo branch unionization in an entirely new light.
Disclosure: As of this posting, I own shares in ASRV, CNAF, and WFC, and may subsequently either dispose of them or purchase more.
A Brief History
There have been three waves of bank unionization in the US. Interest in organizing in the industry appears to surge every 50 years.
1st Wave (1920s)
At least 50 of our nation's oldest banks were unionized from the start. Of these, only three remain, but all can be said to be performing well.
Amalgamated Bank of Chicago (1922)
Amalgamated Bank of New York (1923)
Bank of Labor, Kansas City (1924)
2nd Wave (1970s)
Three banks were unionized during the second wave. None are exemplary performers.
AmeriServ, founded in 1901, unionized in 1971
CNA Financial, founded in 1934, unionized in 1973
Union Bank and Trust, founded by unions in 1976
3rd Wave (2020s)
Two recent labor organization successes suggest we are in the third wave of bank unionization. So far, Beneficial Bank has performed poorly since unionizing in 2020. How the Wells Fargo branch unionized in 2023 will perform remains to be seen. Is a third predictable, based on prior waves?
Beneficial Bank and Trust
Wells Fargo Albuquerque, New Mexico branch
See also: Infographic: Unionized Banks in the US
Takeaways
There's a case to be made for increasing Union Ownership in US banks.
Generally speaking, unionized banks that were both founded by unions and maintained significant Union ownership have performed much better than their peers.
Four of the aforementioned unionized banks boast Union Ownership — the old-schoolers, plus 70's newcomer Union Bank and Trust:
Amalgamated Bank of Chicago
Amalgamated Bank of New York
Bank of Labor, Kansas City
Union Bank and Trust
The average ROA and ROE for these four banks are 1.2% and 18.3%, respectively, vs 0.4% and 6.0% for the two publicly traded peers that don't feature notable Union ownership (i.e., CNA Financial and AmeriServ).
It's not surprising today's bank tellers are expressing interest in organized labor.
Frankly, many tellers are being financially exploited — and at the expense of taxpayers.
The US Bureau of Labor and Statistics indicates as much as 35% of America's bank tellers are making less than $15/hour.
According to a recent Axios article about labor organization efforts at Wells Fargo, as many as one in three bank tellers relies on some form of government assistance.”
Bank profits are high enough that banks can afford to pay their workers a living wage, and societally, we should be expecting, encouraging, and if needed, requiring, them to do so.
There's no need and no excuse for US banking to be operating as a government-subsidized industry.
There's a case to be made for encouraging Teller Ownership in our banks.
Financial stewardship and fiduciary thinking are mindsets crucial to the DNA of a strong banking system. A bank that doesn't care about the financial well-being of all its stakeholders isn't a world class bank.
There's literally no bank in the nation that can't afford to gift some shares to every employee, getting them truly vested in the bank's performance.
Is the teller skilled and knowledgeable, or unskilled? I think a number of tellers today would do well to stay ahead of software progress.
This statement “The US Bureau of Labor and Statistics indicates as much as 35% of America's bank tellers are making less than $15/hour.” comes as a shocker!
With all the money they bank makes, they decide to pay their staff similar to what some teens make at Starbucks and other retail stores.
May be the staff of those banks should just go to drive Uber or doordash with their time.
This is really Unions could help with!!!