Starbucks union proposal arises as state’s rate of organized labor hits historic low

By: - July 2, 2023 6:00 am

The sun rises on a Starbucks on the south side of Sioux Falls during the summer of 2023. (Joshua Haiar/South Dakota Searchlight)

If Starbucks workers in Aberdeen succeed in unionizing, they’ll achieve a rare victory in a state where the share of unionized workers has fallen to a historic low of less than 5%.

Some workers at the Aberdeen location say long hours and understaffed shifts pushed them to organize. 

“In the time that each of us has been on the Starbucks team, we have all seen egregious abuses of managerial and company power, in examples almost too numerous to count,” workers said in a notice to Starbucks. 

Starbucks’ media relations department did not reply to a request for comment.

According to data from the Bureau of Labor Statistics, South Dakota’s unionization rate dropped from 12.6% of workers in 1989 to 4.2% in 2022, currently standing at about 17,000 workers. 

That reflects a national trend. In 1989, 16.4% of U.S. workers were in a union. In 2022, the number was 10.1%.

James Heeren is a South Dakota business agent with Teamsters Local 120, a union organization representing nearly 12,000 workers in Minnesota, Iowa, North Dakota and South Dakota. 

A national Starbucks movement fueled by young people who are “tired of getting the short end of the stick” is behind the unionization push in Aberdeen, Heeren said.

“The other side wants to say they’re a ‘woke culture,’” he said. “They’re not. They’re tired of working these long hours for little pay.”

Heeren attributes the statewide decline in unions to a combination of factors, including a low unemployment rate and high demand for labor – which means workers can more easily leave poor working conditions to pursue work elsewhere.

“There are so many jobs out there,” he said. “They can just go to a company in another state that’s already organized.”

South Dakota’s labor laws, which are more employer-friendly, also play a role. They hinder collective bargaining efforts and weaken the overall influence of unions, Heeren said.

Jason George agrees. He’s the business manager of the International Union of Operating Engineers Local 49. The union represents about 14,600 construction workers in Minnesota and the Dakotas, but only about 100 of those are in South Dakota. 

“The reason for that is South Dakota’s long history of anti-union sentiment,” George said. “And the biggest part of that is right-to-work laws.” 

A right-to-work state

South Dakota is a “right-to-work” state. That means employees in unionized workplaces are not required to join or financially support the union representing them. George and Heeren said this weakens the financial stability of unions by allowing workers to benefit from the negotiated terms and conditions of the union without contributing to the union’s funding.

State Sen. Reynold Nesiba, D-Sioux Falls, teaches economics at Augustana University and supports unions. He said the state’s right-to-work laws are one of three main reasons unionization in South Dakota has waned in recent decades. 

“It’s a free-rider problem that’s built into the way we negotiate, and it makes it really hard, almost impossible, to organize a union, because people can get the benefits without paying for it,” Nesiba said. “And that was the intention.”

Nesiba said the other two factors are the large number of small firms in the state, which are “the least likely to organize,” and a “culture of work.” 

“Rather than organize, South Dakotans will just go and get another job to make ends meet,” Nesiba said. “There’s a cultural commitment to rugged individualism and less of a commitment to solidarity.” 

In 2021, of the state’s 461,000 workers, 33,000 (7.2%) held more than one job. Nationally, the rate was 4.6%.

David Owen is the chief lobbyist and president of the South Dakota Chamber of Commerce and Industry. He doesn’t describe himself as anti-union, but he disagrees with criticisms of South Dakota’s right-to-work laws. He said they ensure an employee is not compelled to pay dues to a union if they disagree with the union’s objectives or strategies. 

“South Dakota has a rural work culture that’s more focused on the individual,” Owen said.

Owen also said many companies raised wages during the COVID-19 pandemic “like nothing I had ever seen,” which made unionization “less appealing.”

Workers lay fiber-optic cable at a broadband expansion site near Colton. (Joshua Haiar/South Dakota Searchlight)

Heeren said unions are also hamstrung by South Dakota law saying an employer does not need a specific reason for firing an employee. State law says “an employment having no specified term may be terminated at the will of either party on notice to the other, unless otherwise provided by statute.” And South Dakota has limited protections for workers against employer anti-union tactics, Heeren said.

“It happens nine times out of 10: A group wants to organize, the company tries to find out who is the leader, and they try to find reasons to get rid of them prior to the election, or they try to find weak links who they can sway with more money,” Heeren said. 

George said there’s another factor at play. 

“You can win a union election,” he said. “But that doesn’t guarantee a contract with the employer.”

George calls that “the fundamental problem.” Unionizing means employees have the right to bargain with the employer, but George said all the employer has to do is bargain in good faith with the union for one year. He said employers sometimes “just stall it out” until that year ends, and then the employer has the right to call for a decertification vote. 

“And in the eyes of the workers, they look around and go, ‘This union hasn’t done a damn thing for me,’” George said.

And while a union can strike, he said employers – particularly big corporations with shareholders – try to bring in outside labor to undermine the strike.

A bruised image in Sioux Falls

Another possible reason for the decline of unions in South Dakota is fallout from the John Morrell meatpacking strike of 1987 in Sioux Falls. 

Dissatisfaction with wages, working conditions and safety problems led the plant’s union to call for a strike. But as approximately 2,500 workers walked off the job, the plant maintained operations by hiring replacements. 

The strike lasted for several months, but the workers’ demands for improved conditions and wages were not met.

“Ultimately, the results of that broken strike was the beginning of the decline,” said Eric Ollila, executive director of the South Dakota State Employees Association. The group lobbies on behalf of state workers. “It was a spirit-breaker. It just felt different.” 


George said more union interest is emerging among workers. A 2023 report by the Economic Policy Institute found an uptick in union-organizing activity nationally in 2022. The report says there is evidence many more workers would like to form a union but face barriers doing so.

George said the average heavy equipment operators building a road in South Dakota make $25 per hour with limited benefits, while their unionized counterparts in Minnesota make $60 an hour with a pension and family health care with no premiums. 

“These construction workers in South Dakota are suffering the anti-union sentiment, and wasting their careers,” George said.

An apartment building under construction on June 13, 2023, in eastern Rapid City. (Seth Tupper/South Dakota Searchlight)
An apartment building under construction on June 13, 2023, in eastern Rapid City. (Seth Tupper/South Dakota Searchlight)

Over the past 50 years, the CEO-to-worker compensation disparity has widened. So has the country’s wealth gap. Since 1980, real income of the bottom 50% of the population has grown about 20%, while the top 10% has had 145% growth.

The rising costs of having children, an education, health care and housing – plus Social Security and Medicare feeling less secure as the population ages – should all make collective bargaining in the workplace more appealing, according to Ollila, with the South Dakota State Employees Association. 

“I think those concerns are driving the increased interest in unions that we’ve seen amongst places like the coffee shop,” Ollila said. “They’re looking to the future and see the value in rallying together.”

Kory Rawstern, vice president of the AFL CIO South Dakota Labor Federation, echoed the point.

“We’ve got good working-class families where both mom and dad are working full time, and a part-time job between the two of them just to offset the cost of day care,” he said. “That is not right.” 

Critics of unions argue they create rigid work structures and hinder the flexibility needed for businesses to adapt to changing economic conditions. 

Additionally, some say unions foster an adversarial relationship between management and labor, leading to conflicts and tensions that can hinder workplace productivity.



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Joshua Haiar
Joshua Haiar

Joshua Haiar is a reporter based in Sioux Falls. Born and raised in Mitchell, he joined the Navy as a public affairs specialist after high school and then earned a degree from the University of South Dakota. Prior to joining South Dakota Searchlight, Joshua worked for five years as a multimedia specialist and journalist with South Dakota Public Broadcasting.